[News] Tentative Agreement Reached! New Arena!

[Roughneck]

What's the NPV of that $15 in 35 years is the real question.

[getbak]

Originally Posted by Roughneck

I know Columbus were the first to do it, not sure if they're still the only.

According to Wikipedia, Toronto and Columbus are the only NHL teams with PSLs in their arenas.

[TheAlpineOracle]

Originally Posted by getbak

According to Wikipedia, Toronto and Columbus are the only NHL teams with PSLs in their arenas.

Columbus is a weird one.

[mikephoen]

Originally Posted by Slava

Who's paying in Seattle? It's funny that other cities around the world manage to do this, but we can't possibly consider it here. The soccer team I follow in London just finished a £1bn stadium, which is magnificent, and there was no public money for that. The reality is professional sports franchises are spoiled in North America. We all know, deep down, that this is only a good deal "for", and not a good deal. It's maybe slightly better or the same as what Edmonton got, and that seems to be the bar here, so as far as multi-million dollar spending for a private corporation goes it's ok I guess. Better than subsidizing Bombardier again, or at least a little enjoyment for me!

And I say all that as someone who just accepts that it's going to happen. I do want a new arena and I think we need one. I just don't think that this deal is amazing. It's just OK.

Seattle metro area is three times the size of Calgary. London is 10 times bigger. That’s why buildings there can be privately financed. Try to find an example of a metro area with less than 1.5 million people with a privately financed arena. I did some research and found nothing. I did come across an article that states that the city of Winnipeg pays the Jets a subsidy every year (16.3M in 2018).

And this deal is easily better than the Edmonton one. Katz only put up 19.7 million of his own money according to the City of Edmonton website. Even CalgaryNext wasn’t that greedy. CSEC is putting up 275M upfront for this one. It’s a fair deal.

[powderjunkie]

Originally Posted by TheAlpineOracle

Im not saying everyone opposing the deal is uneducated, but I’m sure saying the vocals one seems to be. Head over to the Calgary Herald and read the conversations, or take a gander of the people voicing support for Farkas and Woolley in their Facebook pages. Not a single solitary argument like yours, just drivel about funding Murray Edwards and how their services are getting cut while the Flames are being handed free money.

These are the people that need more “consultation”. Yeah.... no thanks.

Everyone knows stadiums are not great deals, but this is the best we are going to get and it’s better than most. Saddledome needs replacing with or without the Flames.

Not sure why I'm bothering responding to the guy that doesn't know the difference between the 'free market' and a 'fair market', but you might want to rethink drawing conclusions about collective opinions based on facebook and news site comment sections...unless that conclusion is that any attempt to draw insight from those platforms is stupid.

While you're looking up free market vs. fair, you might also check the definitions of 'need' and 'want'.

There are some compelling reasons to support this deal. You're just not making any of them...

[Johnny Makarov]

Originally Posted by the_only_turek_fan

Yup. I have all kind of problems.

What else do you got?

thoughts and prayers?

[powderjunkie]

Originally Posted by Bingo

Yep ... never claimed it was mine.
Certainly not celebrating anything.

Being pretty straight forward. Understand the reasons behind the no at any cost crowd, but there is a "would like to have a new arena" crowd too. And a "makes the most economic sense to share the costs" crowd.

As I said ... nobody that owns a hockey team is getting a good return on investment. Hopefully the line of people willing to tie their capital up doesn't run out. The building would make it pretty rough to stay in the mix.

There's also a "this deal is close, but could be a lot better - let's push for it now while we still have all of the leverage" crowd.

Can we stop with the 'owning a hockey team is a hassle' rhetoric though? (not directed only at you, it's been a common refrain in these threads). Franchise values have exploded across the Big 4. Could you generate a better return elsewhere? Probably. You could also generate less, or lose money altogether.

At the end of the day, this is one of the most exclusive assets to own - 124 in North America, only 9 of them in Canada. Most are generating annual dividends in the form of net income (the Flames certainly are, despite what King & Bettman may want us to believe). And this doesn't even begin to mention the personal experience returns (ie. owner's box, and basically being a little kid playing with real-life hockey cards) and ego play. Some art lovers may know which rich dude bought the latest Van Gogh or Banksy up for auction, but almost everyone in your local community knows who owns their sports club...perhaps more importantly, Murray & co. own something that a lot of their other rich friends don't own and can't own.

It's not a hassle. It's a super rare, vintage Ferrari, but we're being asked to subsidize the garage.

[Manhattanboy]

Enough. Just vote already and get on with it.

[Bingo]

Originally Posted by powderjunkie

Can we stop with the 'owning a hockey team is a hassle' rhetoric though? (not directed only at you, it's been a common refrain in these threads). Franchise values have exploded across the Big 4. Could you generate a better return elsewhere? Probably. You could also generate less, or lose money altogether.

At the end of the day, this is one of the most exclusive assets to own - 124 in North America, only 9 of them in Canada. Most are generating annual dividends in the form of net income (the Flames certainly are, despite what King & Bettman may want us to believe). And this doesn't even begin to mention the personal experience returns (ie. owner's box, and basically being a little kid playing with real-life hockey cards) and ego play. Some art lovers may know which rich dude bought the latest Van Gogh or Banksy up for auction, but almost everyone in your local community knows who owns their sports club...perhaps more importantly, Murray & co. own something that a lot of their other rich friends don't own and can't own.

It's not a hassle. It's a super rare, vintage Ferrari, but we're being asked to subsidize the garage.

The car example is a good one ... a vanity asset so I can see that sure.

The Flames have moved into the recipient range in revenue sharing though, so said car would have to have some pretty big maintenance bills.

We've seen ownership struggles (difficulty finding suitors) in other sports and other cities, and we've seen teams move.

There isn't a huge demand asking these guys to sell these teams every day, and if there is I'm guessing locals like Calgary aren't all that high on the list. I'd assume the line up to tie up capital isn't all that long.

And that's fine. As I said I get it. The don't give them a dollar of public money side has a very viable stance.

[Enoch Root]

It's a rare Ferrari, but the difference is that we all get to drive it once in a while. Well, many of us get to drive it, and all of us get to enjoy the experience of having that garage, and the events that come with it, including having professional sports. Doesn't mean we should just pay for the garage on their behalf, but there are benefits for all of us, and the cost is a challenging one in smaller cities.

I think there's one more important distinction to be made as well. Owning a team is the Ferrari, the building is a separate asset that comes along with it. The building is an asset for the city, and the building serves the city far beyond also serving the primary tenant.

Regarding this whole 'do we need more debate time' issue, the only people I see clamouring for more discussion are the people that are vehemently opposed to any public funding. Current counsel, including Nenshi, were strongly opposed to putting up huge funds - they have represented the city from a position of strength from day 1. If they are comfortable with the deal, then that reflects very well on it. A zero NPV for the city sounds like a really good deal to me. At some point, you agree and get it done, or you drown in permanent discussion.

[Enoch Root]

Originally Posted by Bunk

As I bantered back and forth with Tombe on Twitter - it's $15 if you attribute the full City cost ONLY to the residential taxpayer. But as Tombe himself argued, all money whether capital or operating is fungible. So taking the same principle - that cost should be thought of also as being allocated across all revenue stream types - including residential, non residential, sale of goods, etc.

Residential property taxes are about 25% of the City's revenue, therefore the "homeowner" share of the cost is 25% too. So that's about $3.75 per household per year.

Further, and as he acknowledged after I pushed back - by year 35 there are more households sharing that burden as well. You could expect 40-50% more houses being part of the assessment base, so that per household cost also decreases over time.

So, in reality, on average it might be closer to $3.00 to $3.25 per household cost per year, or say less than 1 cent per household per day. About half a cent per citizen per day.

Also, his $15 illustration was an example if all city revenues were eliminated. (not sure everyone noticed that little detail)

There are multiple sources of city revenues in this deal. Turn them all off, then allocate all of the costs just to homeowners, and those homeowners would be facing a $15 per year charge.

That's what he was saying - in an unrealistically bad worst case scenario, it's still a pretty small number.

But in reality, there are multiple sources of revenue - most or all of which the city was very conservative about estimating. And with those conservative assumptions, the NPV of the deal is about zero. In other words, no net cost.

[Slava]

Originally Posted by mikephoen

Seattle metro area is three times the size of Calgary. London is 10 times bigger. That’s why buildings there can be privately financed. Try to find an example of a metro area with less than 1.5 million people with a privately financed arena. I did some research and found nothing. I did come across an article that states that the city of Winnipeg pays the Jets a subsidy every year (16.3M in 2018).

And this deal is easily better than the Edmonton one. Katz only put up 19.7 million of his own money according to the City of Edmonton website. Even CalgaryNext wasn’t that greedy. CSEC is putting up 275M upfront for this one. It’s a fair deal.

Is it the size of the market that we're concerned about though? The Flames have no problem selling tickets last I checked and this is one of the healthiest markets in the league. Just because these places are larger (despite the fact that this stadium in London is not the "one" place to watch football), doesn't mean that we have no option other than public funding.

And this morning, hearing from Brett Wilson just makes me realise the sales pitch that we're getting here. Now the new event center is going to be worth $1.5bn in 35 years and the city gets that today for the low low price of $275m It's incredible really how generous these people are to the city. We all know, if that was actually the case and actually an amazing deal, private money dive in an invest the cash. It's not though, so they aren't.

[GioforPM]

Originally Posted by Enoch Root

It's a rare Ferrari, but the difference is that we all get to drive it once in a while. Well, many of us get to drive it, and all of us get to enjoy the experience of having that garage, and the events that come with it, including having professional sports. Doesn't mean we should just pay for the garage on their behalf, but there are benefits for all of us, and the cost is a challenging one in smaller cities.

I think there's one more important distinction to be made as well. Owning a team is the Ferrari, the building is a separate asset that comes along with it. The building is an asset for the city, and the building serves the city far beyond also serving the primary tenant.

Regarding this whole 'do we need more debate time' issue, the only people I see clamouring for more discussion are the people that are vehemently opposed to any public funding. Current counsel, including Nenshi, were strongly opposed to putting up huge funds - they have represented the city from a position of strength from day 1. If they are comfortable with the deal, then that reflects very well on it. A zero NPV for the city sounds like a really good deal to me. At some point, you agree and get it done, or you drown in permanent discussion.

This. When Nenshi is supportive, I'm pretty comfortable that the deal is not one-sided. It's not like he is a mark for CSEC.

[The Yen Man]

Originally Posted by Slava

Is it the size of the market that we're concerned about though? The Flames have no problem selling tickets last I checked and this is one of the healthiest markets in the league. Just because these places are larger (despite the fact that this stadium in London is not the "one" place to watch football), doesn't mean that we have no option other than public funding.

And this morning, hearing from Brett Wilson just makes me realise the sales pitch that we're getting here. Now the new event center is going to be worth $1.5bn in 35 years and the city gets that today for the low low price of $275m It's incredible really how generous these people are to the city. We all know, if that was actually the case and actually an amazing deal, private money dive in an invest the cash. It's not though, so they aren't.

But it's not hockey that's the issue. It's all the other events. An arena in New York, LA, and Vegas will pretty much be booked for something most of the year, and most of them are marquee events. Calgary would see Flames games, Hitmen / Roughneck games, concerts, the odd events (UFC, WWE, monster truck, etc). The arena would probably be empty 1/3rd of the time.

[Enoch Root]

Originally Posted by Slava

Is it the size of the market that we're concerned about though? The Flames have no problem selling tickets last I checked and this is one of the healthiest markets in the league. Just because these places are larger (despite the fact that this stadium in London is not the "one" place to watch football), doesn't mean that we have no option other than public funding.

And this morning, hearing from Brett Wilson just makes me realise the sales pitch that we're getting here. Now the new event center is going to be worth $1.5bn in 35 years and the city gets that today for the low low price of $275m It's incredible really how generous these people are to the city. We all know, if that was actually the case and actually an amazing deal, private money dive in an invest the cash. It's not though, so they aren't.

You're just considering the Flames though - that's only 45 nights a year (plus playoffs). Larger cities have way more events in their buildings. Seattle would be able to utilize their building way more than Calgary can. LA runs more than one event per day!

[MoneyGuy]

Am I the only one who suspects this may be little more than a formality and approval will fly through council?

[topfiverecords]

So when's this goin down y'all?

Council back in action for the Woolley Farkas Dog & Pony show at 1:00?

I need to see this.

[Toonage]

https://twitter.com/user/status/1156270550034964480

[sureLoss]

CSEC said no to Woolley's request for an extension.

Delaying the approval will kill the deal.

News Update

Meghan Potkins @mpotkins
BREAKING: There will be no time extension for more public consultations. The arena vote timing was agreed upon in a tri-party agreement, the city manager has informed council #yyccc in a letter.

[MacDaddy77]

good get this over with