Arena negotiation discussion. UPD: Flames release their proposal

[Looch City]

I think we need to start the home game season opener with a healthy Fire Ken King chant.

[Cali Panthers Fan]

Originally Posted by Regorium

http://wpmedia.calgaryherald.com/201...rena-pitch.pdf

This is the best link I've found for their pitch.

Ok, so that is from the CSEC. I need more explanation than just putting a big "X" through the city's proposal and then saying "100% Flames!!! OMG, can you believe how ridiculous that is???!!!" Like some petulant teenager.

[Muta]

Originally Posted by spuzzum

They should renovate the Saddledome. Gut it and the Flames can temporarily play in Northlands if needed.

Renovating the Saddledome would be so expensive you may as well just build a new arena. The renovation idea has already been explored. In fact, an RFP was released a couple years ago to come up with concepts to just re-purpose it into something else; likely a secondary convention centre space.

[Benched]

was working earlier, seems to be down now.

basically they refute the cities 1/3, 1/3, 1/3 and say they are paying for 100% of it
they say their proposal is a 50/50 split. The CRL will cover the cities portion.
they spend 1/3 of the page describing how they generate 485mill/yr for the city (indirectly through businesses like restaurants and cabs) and how they (indirectly again) employ 5,500 people. I basically closed the browser after that, as those 'indirect businesses' = our contribution to the city argument is so wrong to me, my rage was rising too high.


as has been stated, they left a lot of math out and it was a really terrible counter argument, just based on the fact you can see them lying. They may have good points or another way to look at things, but when you lie or lie by omission, the rest of the points get skimmed over because you don't trust the source.

[the-rasta-masta]

Originally Posted by Racki

This has been my opinion for quite a while. Nenshi and the Flames both know that a successful Olympic bid would enable them to garner something that the Oilers absolutely could not secure - Federal and Provincial funding.

When would the timeline be on finding out if our bid would be successful? I remember reading that Calgary was really the only likely option for 2026 if we did in fact make a bid.

[CorbeauNoir]

Originally Posted by Reneeee

This really does have the potential to ruin this city for years to come, ask Winnipeg. People moved, businesses moved, and only now are people returning due to the return of the Jets. Without a pro sports team our city will be undesirable to many money making vetures.

Late response, but Winnipeg had some of its best economic years ever between its NHL teams - if anything it's receded somewhat since getting the Jets back.

Your argument puts the cart in front of the horse - a city is a good relocation candidate BECAUSE it has the local economic support already in place to warrant it. You don't put a team in a dive of a town and hope it grows into a pro-sports-capable city after the fact, your ordering of events make no sense.

[ComixZone]

With Ken King’s comments on the Fan this morning, it seems pretty clear the Flames aren’t debating or negotiating anything anymore and the Flames are fine playing in the saddledome for (potentially) “a long time”. Which means going forward, if the city wants a new arena, they can build one themselves. The City no longer has a partner in this project.

[GirlySports]

Originally Posted by ComixZone

With Ken King’s comments on the Fan this morning, it seems pretty clear the Flames aren’t debating or negotiating anything anymore and the Flames are fine playing in the saddledome for (potentially) “a long time”. Which means going forward, if the city wants a new arena, they can build one themselves.

Which baffles me why they needed a press conference on Friday. Today's events would have been sufficient to clarify the Flames position.

[djsFlames]

Originally Posted by Benched

was working earlier, seems to be down now.

basically they refute the cities 1/3, 1/3, 1/3 and say they are paying for 100% of it
they say their proposal is a 50/50 split. The CRL will cover the cities portion.
they spend 1/3 of the page describing how they generate 485mill/yr for the city (indirectly through businesses like restaurants and cabs) and how they (indirectly again) employ 5,500 people. I basically closed the browser after that, as those 'indirect businesses' = our contribution to the city argument is so wrong to me, my rage was rising too high.

Some fine mental gymnastics from King (Edwards) to make it seem like the city somehow owes them a sweetheart deal. Is this the Flames' response to the city implying that infrastructure costs (lrt, 17th ave) are related to the arena? Basically coming back with "well we boost business in that whole area, and generate money for transit and cabs, so that should just cancel out."

At this point I'm prepared to sacrifice an Olympic bid just to see the Flames come crawling back to negotiations because the city decided it was't going to get bullied into a deal that's not good for it right now.

[CorbeauNoir]

Originally Posted by Muta

Renovating the Saddledome would be so expensive you may as well just build a new arena. The renovation idea has already been explored. In fact, an RFP was released a couple years ago to come up with concepts to just re-purpose it into something else; likely a secondary convention centre space.

The architecture office I used to work for has done a number of large-scale renovation projects, schools and churches and the like. It's never worth the supposed 'value' it presents on paper. Way more blood sweat and tears on our end, which invariably translates into way more money on the client's end.

[ComixZone]

Originally Posted by GirlySports

Which baffles me why they needed a press conference on Friday. Today's events would have been sufficient to clarify the Flames position.

Yeah, that presser was a waste. Should’ve just been “we’ll get back to you next week with an update, but as stated we are no longer exploring a new arena”.

Regardless though, this is where we are. The new arena project is dead. If the city sees value in building a new arena at some point, they’re on their own. The Flames aren’t going to be part of Nenshi’s East Village “vision”.

[Makarov]

So the Flames proposal essentially amounts to this: you build us a house (which we will have exclusive possession, use of and revenue from). In exchange, we will pay you a rent that covers none of your capital investment and does not even cover the cost of your annual property taxes. Of course, we have generally offered to pay you this incredibly subsidize and insufficient rent up front.

I think that the City could legitimately claim that they are paying ~120% of the cost of the arena in this proposal. They pay the entire construction cost of the arena and then they still have to subsidize the property tax because the rent is not enough to cover it.

I just don't see how the City could ever justify such an agreement.

[Lanny_McDonald]

Originally Posted by Roughneck

Or property tax, meaning the most valuable building in the CRL zone won't be contributing to the CRL, which is why the West Village proposal wasn't feasible either.

The City can continue to charge a property tax if they like, to the interest that owns the building. In this instance that would be the City of Calgary. Charge away.

And it is a stupid argument.

"We don't want to pay rent OR property taxes, why isn't the city being reasonable?!"

Well, if the City of Calgary wants the team to pay rent, then shut the #### up about negotiations, build the arena, and then try and negotiate a lease. It is as simple as that. But the City doesn't want that. They want the Flames to put up a whole whack of money, and then pay rent, and then pay property tax on a building they don't own. You want to talk about fair? How has the City's proposal done anything to address the CSEC's strategic goals? Yet you expect CSEC to just accept the terms that are greatly beneficial to the City and the execution of their development strategy? Fairness is a real double edged sword here.

So they're not paying rent at all.

Let me guess, then you sign a long term lease and you have to pay the first three month's rent up front, you're not really paying rent at all? You're staying there for free?

What this deal ends up being is a leasee providing the lessor the capital to build their project through the pre-payment of the lease. The Flames are guaranteeing the City better than twice the rent that the next closest operator is paying. Chew on that for a while. The Flames are willing to pay twice what the Oilers are paying in a lease deal.

This is a crappy deal for the city.

Not even close. The crappy deal is the one that comes when the City is forced to eat all of the construction costs, own the building outright, then have to negotiate a lease with a new interest.

Now I know you are going to immeditaley dismiss that, because you're going to dream up something about land values and other unrelated garbage, but the reality is that if the City has a building they wish to lease, they are going to have to negotiate on what the traffic will bear. Any interest coming in is going to beat the City to a pulp with the lease up in Edmonton and argue that establishes market value, then refuse to pay a cent more. This is what is being completely missed in this discussion. If the Flames walk away from this City, the next team coming in is going to screw it even harder. This will be all business, and the City will have to eat a massive amount of money to get a deal done.

Originally Posted by Resolute 14

Yeah, sorry New Era, but "no ticket tax" means only that the increased ticket prices goes into the team's pockets rather than toward the arena. Don't sit there and try to pass this off as saving the fans money. It won't.

Okay, so this is interesting. If the Flames don't have the ticket tax issue to deal with they will just raise their tickets to that maximum level, for sure! Because there is no ticket tax they are going to be greedy and pocket the cash. Well, if this is indeed the belief, then this completely supports the claim that the revenues from a ticket tax are coming directly from Flames revenues and they are in reality paying for that component of the City's plan as well.

Originally Posted by getbak

Call it a ticket tax (which it will almost certainly be so that it won't count as HRR), or call it something else, a price increase is a price increase and there will absolutely be a price increase.

Notice how they don't break down the city's offer to show up front vs ticket tax. It's all Flames contribution in their mind.

See, here's where you're wrong. The Flames cannot institute a ticket tax. They do not have the legal capacity to institute and collect a tax on their own. Only the City has the ability to do this, and only directly on this facility. So it would be the City instituting the ticket tax, and as Resolute has clearly indicated, it will be a haircut on the revenues from the team, which they are then paying.

Originally Posted by ikaris

So using Flames logic, the $275M is actually a public contribution because the rent is actually public revenue. Essentially Flames put up nothing (except perhaps the interest cost of that amount assuming they are borrowing it).

I've read some ridiculous things in these threads, but this takes things in a new a weird direction. The Flames $275M contribution would be a public contribution because the rent is public revenue? I guess if you consider your rent on any City owned property as being a public contribution, but that is not how that money is classified. I mean, there are logic leaps, then there are logic leaps. If that is indeed the case, then the guys who built the NMC white elephant should stop fund raising and leave it competely up to the city. It is public revenue they generating, and that is not in their mission or charter. The City can have complete ownership of another jewel in their entertainment district.

Also with respect to ownership, the city proposal seemed open to who owned the facility and if there would be property tax versus rent (it was a negotiating point that the city would likely discount versus actual value).

It seemed pretty straight forward. The City wanted the Flames to own the building so they could recover their costs through property taxes. This is where the Flames were accurate in their comments of them ultimately paying the whole thing.

I really think you guys have to ask yourself if you would get involved in a deal where:

1) You were asked to put up a big down payment to construct a building you would not own.
2) You would then dedicate a chunk of your revenues, based on sales, to cover another chunk of the building.
3) You would then either have to pay property taxes, on the building you don't own, or rent on a building you just fronted the majority of the money to construct.

Would you seriously do that? Now I understand there are are possible benefits extended to you, like exclusivity to use the building, and potential to make money from all events in that building you are leasing, but it still begs the basic question. Is this a fair deal to you?

Conversely, would you be willing to get into a deal where you sign a 35 year lease on a non-existent building, one where you pay your money upfront, kno0wing you are going to be then operating in a rent free environment, because your rent has been paid upfront and used to construct the building? Seems this might be a little more attractive to you? Seems it might be a pretty fair deal for the party trying to build the facility? Be honest.

To me, there is still some room for improvement in both proposals. I think there is still room in getting both parties to pony up. The Flames should be pushing the City to move aggressively forward on the completion of the entertainment district and making them commit to that. The City should be finding a way to recover their money in a less impactful way and be prepared to do so over the full 35 years of the life of the building. The negotiations need to be done honestly. I think there is room to do so, the parties just need to look at the good things in each other's proposals and put a common plan together using those mechanism.

[the2bears]

Originally Posted by Reneeee

I do yes... That's not to say I'm a horrible person. I just value my hometown team. That's not to say I'd force them to love in a warzone just because there is pro sports.

some people get their panties twisted far too easily these days.

If the Flames were to leave I'd consider it a loss and would look to transfer to somewhere like Vancouver, Montreal and Toronto.

Sent from my Nexus 5 using Tapatalk

Like you getting offended when someone suggests you grow up?

[nik-]

Originally Posted by New Era

The Flames can continue to charge a property tax if they like, to the interest that owns the building. In this instance that would be the City of Calgary. Charge away.

Perfectly reasonable, assuming they've purchased that land first.

[topfiverecords]

It's absolutely astonishing how arrogantly CSEC assumes the City's new arena would be so amazing that other private development would almost immediately build out the district and fund this CRL. Just like the how the Saddledome hasn't ever done anything for Victoria Park or the east end of 17th avenue in the last 35 years.

Sorry boys (CSEC), a new arena wouldn't induce a single shovel turning on any of the surrounding land.

Once the green line station is open, Beltline and East Village land becomes scarce, and the economy recovers the neighbourhood will fill in over time with condo development, arena or no arena.

In fact an arena has a chance to be a huge impediment to condo sales. Using the land for an arena reduces the number of residents living in the neighbourhood by the thousands, which limits local service businesses ability to be profitable and remain open. Commercial development will focus on servicing game and concert crowds and not the day to day needs of residents. I'd guess a majority of condo purchasers/ renters that have choice don't want to live in an area where there are crowds and traffic jams on the streets twice an evening multiple times a year. Some that are season ticket holders will like the proximity, but that's a small percentage.

Even if it magically did spur development that wouldn't have EVER occurred, there isn't enough remaining property in that area that isn't Stampede land to recoup 225M from a CRL.

[Makarov]

Originally Posted by New Era

The Flames can continue to charge a property tax if they like, to the interest that owns the building. In this instance that would be the City of Calgary. Charge away.



Well, if the City of Calgary wants the team to pay rent, then shut the #### up about negotiations, build the arena, and then try and negotiate a lease. It is as simple as that. But the City doesn't want that. They want the Flames to put up a whole whack of money, and then pay rent, and then pay property tax on a building they don't own. You want to talk about fair? How has the City's proposal done anything to address the CSEC's strategic goals? Yet you expect CSEC to just accept the terms that are greatly beneficial to the City and the execution of their development strategy? Fairness is a real double edged sword here.



Let me guess, then you sign a long term lease and you have to pay the first three month's rent up front, you're not really paying rent at all? You're staying there for free?

What this deal ends up being is a leasee providing the lessor the capital to build their project through the pre-payment of the lease. The Flames are guaranteeing the City better than twice the rent that the next closest operator is paying. Chew on that for a while. The Flames are willing to pay twice what the Oilers are paying in a lease deal.



Not even close. The crappy deal is the one that comes when the City is forced to eat all of the construction costs, own the building outright, then have to negotiate a lease with a new interest.

Now I know you are going to immeditaley dismiss that, because you're going to dream up something about land values and other unrelated garbage, but the reality is that if the City has a building they wish to lease, they are going to have to negotiate on what the traffic will bear. Any interest coming in is going to beat the City to a pulp with the lease up in Edmonton and argue that establishes market value, then refuse to pay a cent more. This is what is being completely missed in this discussion. If the Flames walk away from this City, the next team coming in is going to screw it even harder. This will be all business, and the City will have to eat a massive amount of money to get a deal done.



Okay, so this is interesting. If the Flames don't have the ticket tax issue to deal with they will just raise their tickets to that maximum level, for sure! Because there is no ticket tax they are going to be greedy and pocket the cash. Well, if this is indeed the belief, then this completely supports the claim that the revenues from a ticket tax are coming directly from Flames revenues and they are in reality paying for that component of the City's plan as well.



See, here's where you're wrong. The Flames cannot institute a ticket tax. They do not have the legal capacity to institute and collect a tax on their own. Only the City has the ability to do this, and only directly on this facility. So it would be the City instituting the ticket tax, and as Resolute has clearly indicated, it will be a haircut on the revenues from the team, which they are then paying.



I've read some ridiculous things in these threads, but this takes things in a new a weird direction. The Flames $275M contribution would be a public contribution because the rent is public revenue? I guess if you consider your rent on any City owned property as being a public contribution, but that is not how that money is classified. I mean, there are logic leaps, then there are logic leaps. If that is indeed the case, then the guys who built the NMC white elephant should stop fund raising and leave it competely up to the city. It is public revenue they generating, and that is not in their mission or charter. The City can have complete ownership of another jewel in their entertainment district.



It seemed pretty straight forward. The City wanted the Flames to own the building so they could recover their costs through property taxes. This is where the Flames were accurate in their comments of them ultimately paying the whole thing.

I really think you guys have to ask yourself if you would get involved in a deal where:

1) You were asked to put up a big down payment to construct a building you would not own.
2) You would then dedicate a chunk of your revenues, based on sales, to cover another chunk of the building.
3) You would then either have to pay property taxes, on the building you don't own, or rent on a building you just fronted the majority of the money to construct.

Would you seriously do that? Now I understand there are are possible benefits extended to you, like exclusivity to use the building, and potential to make money from all events in that building you are leasing, but it still begs the basic question. Is this a fair deal to you?

Conversely, would you be willing to get into a deal where you sign a 35 year lease on a non-existent building, one where you pay your money upfront, kno0wing you are going to be then operating in a rent free environment, because your rent has been paid upfront and used to construct the building? Seems this might be a little more attractive to you? Seems it might be a pretty fair deal for the party trying to build the facility? Be honest.

To me, there is still some room for improvement in both proposals. I think there is still room in getting both parties to pony up. The Flames should be pushing the City to move aggressively forward on the completion of the entertainment district and making them commit to that. The City should be finding a way to recover their money in a less impactful way and be prepared to do so over the full 35 years of the life of the building. The negotiations need to be done honestly. I think there is room to do so, the parties just need to look at the good things in each other's proposals and put a common plan together using those mechanism.

You are badly misrepresenting the City's offer. For the sake of simplicity, I'm justgoing omit the City's offer to give the Flames $30 million worth of land, demolish a competing facility (Saddledome) and write a cheque for ~$100 million. The City is therefore asking the Flames to:

(1) Buy a piece of land (either with their own money or the bank's);
(2) Build a building on it (either with their own money or the bank's);
(3) Pay the lawfully required property taxes on the property.

That is an offer that every single homeowner on this forum has accepted.

[Senator Clay Davis]

So basically the Flames are praying for Bill Smith to become mayor is their plan. Best of luck.

[ynwa03]

I just don't get it. There is an extremely vocal minority in here who are so adamant about sticking to the Flames side that it makes me question their intentions.

Sorry to have to say this, but I get why Bingo would be a little off centre on the topic, but I don't understand people like New Era. Listen, I don't know who lives in Calgary and who doesn't, but the last 3 year or so have not been good in this City. Tens of thousands of people have lost their jobs, people have lost their homes. This is NOT the right time to be peddling what the Flames are peddling, and, like I have mentioned before, anyone not skeptical of giving a private business tax dollars, and tax breaks of this magnitude without a return of some kind is not being sensitive to the reality in this City.

The Edmonton deal is not at all relevant in this economic climate. Come back when oil is at $100 a barrel and the Flames would probably get a better deal. As it is, it is NOT happening. There's no point bringing it up. It skews the discussion.

[troutman]

Originally Posted by Makarov

So the Flames proposal essentially amounts to this: you build us a house (which we will have exclusive possession, use of and revenue from). In exchange, we will pay you a rent that covers none of your capital investment and does not even cover the cost of your annual property taxes. Of course, we have generally offered to pay you this incredibly subsidize and insufficient rent up front.

I think that the City could legitimately claim that they are paying ~120% of the cost of the arena in this proposal. They pay the entire construction cost of the arena and then they still have to subsidize the property tax because the rent is not enough to cover it.

I just don't see how the City could ever justify such an agreement.

“Do you mind if I turn out the lights?” asks the translator, played by Nasim Pedrad, who skillfully walks the fine line between her CSPAN-translator persona and the escalating menace of her boss. “I like to have the lights off when someone is doing sex to me!”