[News] CalgaryNEXT Announcement. New arena details emerge.

[Locke]

Originally Posted by HotHotHeat

Really surprised Eric Francis didn't make anything of King's non-answer to his revenue splitting question.

That's arguably the most central component of the entire arrangement being proposed by the Flames.

Okay, no it isnt. The Ticket Tax thing is actually no big deal, and Ken King actually answered Francis' idiotic question before he ever even conceived of asking it.

He doesnt know because that a bridge to cross when you get to it. It is asset backed financing and it anyone can do it at any time, theres no risk and ergo little reward which is why its preferable for the City to hold it because their costs of borrowing are likely lower so less gain or cash goes out the door.

The Flames can back it. Or the City can back it. It can be backed. Problem solved.

Granted, it would have been much better optics if the Flames had just said they were going to take care of it.

Originally Posted by YYC in LAX

Adidas Riverdome

Adidas. Put up $50M. Come play with the big boys.

WHY NOT

Ha! I dont think you appreciate the amount of cash Adidas spends on uniforms and sponsorships on an annual basis. $50M is a drop in the bucket.

[bob-loblaw]

If the Flames arranged financing for the ticket tax does it make the deal more palatable to everyone, or is it still not enough? It doesn't really affect the true amount of cash that the city would be forking over in the big picture. Flames would be on the hook if something went sour not the city though.

[Parallex]

Originally Posted by nik-

And how long will the loan take to pay back? What's the ticket tax going to be?

A $10 ticket tax per ticket for every flames game is less than $10 million a year. So 25 years to pay this back and that assumes they go as high as $10 tax per ticket, which they likely won't.

More then that at that rate... your forgetting about the interest on the loan that has to be paid before the principle. I'd imagine it's be a % levy against the price of the ticket. Also I figure It would be applied to all events (not just Flames games).

[Hockeyguy15]

Originally Posted by nik-

And how long will the loan take to pay back? What's the ticket tax going to be?

A $10 ticket tax per ticket for every flames game is less than $10 million a year. So 25 years to pay this back and that assumes they go as high as $10 tax per ticket, which they likely won't.

Except there is Flames, Stamps, Hitmen, Roughnecks.

[Tinordi]

Originally Posted by Hockeyguy15

As far as I know this hasn't been determined yet.

Well to be perfectly clear, it is not costless for the city to issue a 250 million dollar 20 year bond. That impacts the rate at which the city can borrow for future bonds and judging by the long list of capital projects coming up in the next 10 years that may need to be debt financed, that added borrowing costs is not trivial.

But let's be honest, if the flames were financing the 250 million privately then they would just roll that into their private contribution. The fact that it's separate is a sure sign they want public subsidies to pay for it. Therefore it is NOT to be considered as anything other than more public money and increased public contribution share to the project.

[EldrickOnIce]

Originally Posted by Hockeyguy15

Except there is Flames, Stamps, Hitmen, Roughnecks.

And every other event in the new facility

[T@T]

Originally Posted by Hockeyguy15

You expect the Flames to build a bar district on top of the multiplex? That makes no sense.

Not at all, I just would just want there to be enough room to eventually build a district, let's face it, the red mile is toast as soon as the flames move and unless I'm missing something there isn't any room even close to the new area to support a new red mile. Like I said....bore fest.

[DoubleF]

Originally Posted by CroFlames

Aren't the Flames basically funding their own arena? $200 million of their own money, plus the $250 million ticket tax. That should cover the arena part of it.

EDIT: I'm pretty sure the Canucks didn't foot the bill for the nearly $800 million BC Place.

Yes, but to an extent, they're getting free CFL out of it by sorta toss in an idea that a tiny expansion of the idea could meet field house requirements, future Olympic and Soccer expansion if wanted.

I love the idea and think it's the correct one, but I want to see CSE take on more risk if that's the case and not try to piggy back quietly on the field house because it seems like they're paying for most of the event centre. As someone else mentioned, do it big, do it right.

Also, I would like to see proper explanation on how COC gets money back and how they benefit from the deal (rent, property tax, ticket tax... what type of income will they make) and if it will potentially in the future put money back into public coffers.

But I presume this occurs when this ceases to be just a pure idea and more of a plan.

I am also suddenly curious on what will happen to Maxbell centre, Talisman centre, Father David Bauer, the soccer dome etc.

[Southside]

Originally Posted by Hockeyguy15

Except there is Flames, Stamps, Hitmen, Roughnecks.

Concerts, mud trucks, wrestling, rodeos, Oprah....

[Zarley]

Originally Posted by Tinordi

Who's funding the loan for the ticket tax and what's the interest on the loan?

Yeah...

The terms of the loan and the source of financing are yet to be determined. Regardless of how this ticket levy is structured, the cost is borne by CS&E.

I'm surprised how difficult it is for people to grasp that the Flames will be putting up $450 million.

[nik-]

Originally Posted by Hockeyguy15

Except there is Flames, Stamps, Hitmen, Roughnecks.

ok, so 15 million a year? Maybe? Assuming they still do a $10 tax (which they likely won't even on Flames tickets) on considerably cheaper Hitmen, Roughnecks and Stamps tickets.

[octothorp]

While I have my doubts about the funding model, I absolutely love the way that this kinda completes the city's waterfront:
going west to east:

• Edworthy Park / Douglas Fir Trail
• Sports complex hub
• Downtown waterfront, including Prince's Island, Eau Claire, Chinatown, and Kensington across the way
• East Village area, hopefully a vibrant area that ends up filling just a little hipper than downtown, plus Ft. Calgary, St. Patrick's island, and Inglewood
• Zoo / Science Center area
• Hatchery / Bird Sanctuary / Rapids

That's a wonderfully diverse riverfront within about 8km of easily accessible distance, multiple transit stops, and essentially running right through the heart of the city. Right now, that waterfront kinda feels like it ends west of 10th street for all but bike commuters, but this would totally change that.

[Senator Clay Davis]

The ticket tax would be on every ticket at both venues I would imagine. That's gotta be more than 2 million tickets a year combined (and including concerts and other events). At $10 a pop that's around 10-12 years to repay.

As to interest, often in these arrangements the loan given by the government to the team is low interst or totally interest free. If the city is gonna charge standard interest, the Flames can obviously get that from a bank. It's not really about making interest from the city's perspective in these deals, it's about "creatively" financing the building.

[Since1984]

Originally Posted by nik-

And how long will the loan take to pay back? What's the ticket tax going to be?

A $10 ticket tax per ticket for every flames game is less than $10 million a year. So 25 years to pay this back and that assumes they go as high as $10 tax per ticket, which they likely won't.

The ticket tax is on any event held in either the events center/arena or the fieldhouse/stadium.

If the tax is $10 then they get ~8.1 million a year on flames games alone. Put in to account The Roughnecks, Hitmen , Concerts and all other events it could easily double that and thats just thinking of the Arena/Events Centre.



^^ Yeah what they said!

[Hockeyguy15]

Originally Posted by Tinordi

Well to be perfectly clear, it is not costless for the city to issue a 250 million dollar 20 year bond. That impacts the rate at which the city can borrow for future bonds and judging by the long list of capital projects coming up in the next 10 years that may need to be debt financed, that added borrowing costs is not trivial.

But let's be honest, if the flames were financing the 250 million privately then they would just roll that into their private contribution. The fact that it's separate is a sure sign they want public subsidies to pay for it. Therefore it is NOT to be considered as anything other than more public money and increased public contribution share to the project.

Once the city and Flames actually start negotiating this and that issues like this will be addressed. I'm not sure why people are acting like this is a slap in the face, did they not expect some posturing from either side? Obviously the Flames will say this deal is great for everyone, and obviously the city will say no way.

Concessions will be made on both sides and an agreement will be reached.

[Tinordi]

Originally Posted by Zarley

The terms of the loan and the source of financing are yet to be determined. Regardless of how this ticket levy is structured, the cost is borne by CS&E.

I'm surprised how difficult it is for people to grasp that the Flames will be putting up $450 million.

Maybe you could explain this further because I don't see it that way.

What costs/risks are CSE bearing in this case?

[nik-]

Originally Posted by Zarley

The terms of the loan and the source of financing are yet to be determined. Regardless of how this ticket levy is structured, the cost is borne by CS&E.

I'm surprised how difficult it is for people to grasp that the Flames will be putting up $450 million.

They should work out a ticket tax system with a bank. Then they'll be putting up $450 million.

I'm surprised how difficult it is for people to grasp that public funding of stadiums is bad deal for municipalities.

[taffeyb]

Originally Posted by Senator Clay Davis

The ticket tax would be on every ticket at both venues I would imagine. That's gotta be more than 2 million tickets a year combined (and including concerts and other events). At $10 a pop that's around 10-12 years to repay.

As to interest, often in these arrangements the loan given by the government to the team is low interst or totally interest free. If the city is gonna charge standard interest, the Flames can obviously get that from a bank. It's not really about making interest from the city's perspective in these deals, it's about "creatively" financing the building.

KK mentioned that is was 10% a ticket not $10 a ticket. That really increases the total amounts collected. Especially for a $300 concert ticket...

[Locke]

Originally Posted by Tinordi

Who's funding the loan for the ticket tax and what's the interest on the loan?

Yeah...

Hi Tinordi and welcome to Finance 203!

How much money would you like to borrow? $250M you say? When do you want to borrow that? Oh, not now, so later? You're sure you're not going to need more?

So:

- You dont know when you're going to need the money.
- You're not positive about how much money.
- You dont know how long you'll need to borrow it for.

So you have 0 of the variables required to calculate an interest rate. So sure, we'll just make one up!

85,000%.

Does that satisfy you Tinordi? Because you just failed basic Finance. And lets throw in a little failure at critical thinking and comprehension while we're at it.

You asked a question that was asked to Ken King who said he didnt know because he didnt know any of the variables.

Little hint: He was telling you the truth and in future tests we recommend that you actually read the question because sometimes the answer is in the question!

[Tinordi]

Originally Posted by Hockeyguy15

Once the city and Flames actually start negotiating this and that issues like this will be addressed. I'm not sure why people are acting like this is a slap in the face, did they not expect some posturing from either side? Obviously the Flames will say this deal is great for everyone, and obviously the city will say no way.

Concessions will be made on both sides and an agreement will be reached.

These are major points to a deal not small details. I love how glib some people are being as though they should just agree and then work out these annoying details later on... When the taxpayer has essentially NO leverage.