[News] CalgaryNEXT Announcement. New arena details emerge.

[PepsiFree]

Interesting article on CRLs that was on CBC a few months ago (not sure if posted here).

Mentions that they can be very beneficial, but also risky. Depends on the tax profitability of the area going up. In comparison, East Village is looking at $750 million in CRL, and the Edmonton district is looking at over $900 million.

I guess the question is: Does a clean area suddenly ripe for development around a public-use complex gain the city $250 million in property taxes? Riverfront property is VERY valuable, and VERY chic in Calgary. Property values would be high in West Village.

http://www.cbc.ca/m/touch/canada/cal...tory/1.3079392

[Regorium]

Originally Posted by GioforPM

If the condos (or any other business) is on the City owned land they will pay rent, not taxes. Like the Burns building downtown.

I was assuming that the City would sell the remediated land to condo developers who will then pay property tax.

[saillias]

Originally Posted by 1991 Canadian

This might be somewhat blasphemous since this project has been in the works for so long, but whats the harm in waiting a few more years.

-The Flames can start instituting a ticket tax / save up for a larger percentage of the project cost
-The Saddledome is a viable venue in the short term
-We can see use the Edmonton Ice District as a case study to see how much it transforms the area
-Selfishly, I want to see us win at least one more Stanley Cup in the dome

So when? As a STH no thank you to 15 more years at the Dome. It's an obsolete stadium now, what will it be in 5-7 years?

[Zarley]

After having a few days to digest the proposal, here are my thoughts:

The Concept: B+

I like the idea of combining the Flames arena and Stampeders stadium. There are synergies to be achieved by combining things like back of house operations, mechanical systems, restaurants, training facilities, retail, and other fan amenities. Co-locating these facilities makes sense from an economic perspective, and if we want to host a major event in the future it will be great to have a sports & entertainment district. Also, the proposed location can't be beat.

When I first heard that a field-house was going to be combined with the stadium, I thought it was a bad idea that would result in a sub par stadium experience. But the more I think about it, the more it makes sense. Calgary is in desperate need of a new large stadium. There is absolutely no economic case to build a football stadium in Canada and there is no way that a CFL stadium will be constructed with private sector dollars. Combining a fieldhouse with this complex checks off a major want on the City's recreation wishlist and combining amateur and professional sports makes sense. Also, one of the major problems with locating a stadium in an urban areas is that the facility remains a monolithic dead zone for 355 days a year. The fieldhouse (along with the community hockey rink) will ensure that the centrepiece of this new West Village neighbourhood is active at all times, which should benefit retail amenities in the area.

The challenge with the fieldhouse/stadium is going to be ensuring that this stadium doesn't feel like an oversized Jack Simpson Gymnasium during Stampeders game day, while maintaining full utility of a fieldhouse. A second rate facility is not acceptable for Calgary when Winnipeg, Regina, and Vancouver have new (or renovated) state of the art facilities. The only additional thing I'd like to see is a retractable roof. It's not a must have, but I'd hate to lose football outdoors on a sunny afternoon.

The District Plan: C-

As many others have mentioned, this is where CalgaryNEXT really falls short. I realize that this is a very early concept and they likely didn't want to open the can of worms of realigning Bow Trail, but it doesn't make sense development wise to have 1,000' feet of riverfront occupied by this complex and a roadway. Additionally, their proposed layout severs the western portion of the West Village (residential) from supporting amenities in the commercial area at the east. It just doesn't work very well. Luckily, there are a number of ways to remedy this:

1) Keep the stadium complex in its proposed location but move EB Bow Trail adjacent to the CP tracks and shift everything southward. WB Bow remains adjacent to the north side of the complex but as a treed, signalized boulevard. This would allow for development parcels riverside, which would provide a much better link between the east and west portions of the district.

2) Same as 1, but WB Bow Trail would be buried below the complex during construction and a calm access road / pedestrian street would take its place, allowing for larger development parcels. This would be the best option, but costs become a huge concern.

3) Stadium/arena moved to the western portion of the site adjacent to the Pumphouse theatre. This is the most heavily contaminated area, so there may be some cost savings by locating the complex there rather than residential. The West Village under this scenario would become a more coherent district. The obvious drawback is a longer walk to transit and poor access from EB Bow.

Regardless, the plan needs a lot of work in this area.

Financing Plan: B

I know that plenty of people are whinging about this (billionaire owners and millionaire players!, rabble rabble, Spendshi etc.) and there is going to be a huge fight regardless of how reasonable the proposal is, but I was pleasantly surprised to see the Flames putting up as much coin as they are for this.

By putting up $450 million ($200M cash, $250M in ticket levy) the Flames are essentially taking care of the arena portion of the project with entirely private money. This a better deal than what Edmonton ended up with and more in line with the way that Toronto, Montreal, and Vancouver financed their buildings.

As I stated above, there is no economic case for privately financed football stadium. We are in need of a new one and the only way this will be achieved is with a public contribution. Including a fieldhouse and community rink makes this far more palatable for public investment.

The CRL should be the main point of contention with this plan. A CRL is would likely be used to finance redevelopment of the West Village in any case. Can redevelopment of the area and construction of the complex be completed with a $240 million CRL? And will subsequent private development in the West Village be valuable enough to support payback of the initial loan? This depends on how well executed the development is.

Execution: C

The execution of the presentation thus far has left much to be desired. I realize that this is very conceptual in nature, but perhaps the plan shouldn't have been brought to the public at this stage? The renderings were weak, the district plan doesn't make sense, and the PowerPoint looks like it was thrown together in an afternoon. They've created many questions by not presenting a polished product.

Conversely, if they had developed a comprehensive plan and presented it, they risk public criticism for making backroom deals and not doing proper public engagement. It's really a lose-lose scenario.

I think it was a mistake not to breakdown the funding into different sources for the arena, and stadium/fieldhouse. Also, by calling it a ticket "tax" rather then a surcharge, they've confused people into thinking that this is a public contribution.

I'd hope that they bring in some private sector partners or consultants with experience in development. This project is very important for the city and will require some skill to get it off the ground.

[CliffFletcher]

Originally Posted by DFO

My main issue with the plan is the city backed CRL. The 'build and they will come' notion is clumsy. For the CRL to fly there has to be a significant amount of commercial development lined up and built right on the heels of the arena complex. But what are the chances a pile of commercial development dollars are going to materialize as we get further into a recession? The city has a glut of downtown office space and there seems to be piles of condo towers already going up elsewhere around the core. Is there need for more of those types of developments in the West Village any time soon?

Agreed. Will the West Village need to be developed at some point? Probably. Is it a good idea to develop it now, while the East Village is still in its infancy? No. Especially not in what is likely to be a 3-4 year recession in this city, with a surplus of office and condo space.

The timing on this is terrible. People are using the purchase of the Stamps as an excuse, but surely the Flames have been thinking about a new arena since long before then. Colley-Urquhart mentioned that the Flames have been batting things around with the City for 10 years now.

Originally Posted by bax

Is it ever. Almost makes this thread unreadable

Again, this thread is probably the most pro CalgaryNEXT forum in the city. If people can't handle this level of dissension, I don't know what they do when they pick up a newspaper, listen to the radio, or even listen to friends and co-workers talk about the proposal. The great majority of Calgarians are not onside with this. And I expect things will get even more heated once King starts making veiled threats to relocate, as is almost inevitable in these cases.

It's probably just the beginning of negotiation. The numbers will change, the proposal will be scaled back, alternatives will be vetted. But things will get a lot uglier than this before it's all said and done. If people want a place where posters only enthuse about the proposal, it's probably best to start a separate thread.

[Frequitude]

Originally Posted by Bend it like Bourgeois

A CRL creates extra taxes and provincial funds, that wouldn't otherwise be available. Its not a net gain in the end because they borrow first, but it tops up what it takes away. In theory at least.

I completely agree with you. That's where I was going with the PV of this accelerated tax base less the PV of any potential shifted tax base discussion.

Originally Posted by Bend it like Bourgeois

I also think you have to consider that a CRL for the west village is going to happen with or without the flames and stamps. The city wants to build up not out, and has long ago accepted that they are going to use tax funds to make that happen. Diverting money that would otherwise still be spent is an issue with all CRLs, not just this one, and not just for the stamps and flames.

I think the city and the flames will have to answer whether this is the right time to play that card, and if using it on the stadium project is an effective way to do it. But that land will get developed with a CRL either way.

I also agree with you here. I'm not trying to argue that a CRL is a bad thing, I'm just trying to get across that a CRL should effectively be considered a use/investment of public dollars. i.e. let's not be fooled into thinking otherwise (similar to how I'm trying to set straight that the ticket tax is a burdened by the owners).

Originally Posted by Regorium

Consider that the Flames suggest that the City owns the entire facility - that's a massive amount of property tax that doesn't get paid.

In lieu of that though they will get to collect lease payments from the tenants.

[Hilman]

She also closed the door to taxpayer money for cleanup of the contaminated land at the former Canada Creosote plant, the site the facility plans to build on.

“We have operated in this province for many years on a principle of “polluter pay” and there’s really no precedent of the province stepping in to pay the cost of remediation when a polluter has contaminated a piece of property,” explained Notley.

The cost of the cleanup of the site is unknown, with some estimates saying it could run to $200-million.

CalgaryNEXT would see a multi-purpose complex, which would be the home of a new 20,000 seat arena for the Flames and a 30,000 seat stadium for the Stampeders that will double as a community fieldhouse.

With the cleanup costs, the project is expected to have a price tag of over $1.1-billion.

http://www.inews880.com/2015/08/20/n...sc_ref=twitter

[Regorium]

Originally Posted by Bingo

Those in the know on city taxation, CRLs etc ...

I've seen this statement, is it true? (guessing I'll hear it is and it isn't )

"If you are a Calgary citizen, not living in West Village the extent of your contribution to this project is the $200M that the city had planned (unfunded) for the field house."

Because I think that's really key in this argument.

Ideally. Yes. In a world where the project is executed perfectly, and everything in the presentation becomes reality, then that statement is true.

However, real life isn't that perfect. Some possibilities:
- a 50M repair bill hits, and the city has to find a way to pay for it.
- the Saddledome (owned by the City) can't find new tenants/events, and now we have to pay for the maintenance of it
- a bunch of developments never appear, and the city has to take money from general revenue to cover the CRL loan

Also, the CRL loan DIRECTLY comes from everyone else - we're basically forfeiting 20 years of property taxes that would have gone into general revenue and reduced our property tax bill. We probably pay a hundred bucks a year per household towards the east village development, because we've basically forfeited all of the property tax generated in that area (including the bow building), which has to be generated from the rest of us.

That's what I can think of off the top of my head.

[bax]

Originally Posted by CliffFletcher

Agreed. Will the West Village need to be developed at some point? Probably. Is it a good idea to develop it now, while the East Village is still in its infancy? No. Especially not in what is likely to be a 3-4 year recession in this city, with a surplus of office and condo space.

The timing on this is terrible. People are using the purchase of the Stamps as an excuse, but surely the Flames have been thinking about a new arena since long before then. Colley-Urquhart mentioned that the Flames have been batting things around with the City for 10 years now.



Again, this thread is probably the most pro CalgaryNEXT forum in the city. If people can't handle this level of dissension, I don't know what they do when they pick up a newspaper, listen to the radio, or even listen to friends and co-workers talk about the proposal. The great majority of Calgarians are not onside with this. And I expect things will get even more heated once King starts making veiled threats to relocate, as is almost inevitable in these cases.

It's probably just the beginning of negotiation. The numbers will change, the proposal will be scaled back, alternatives will be vetted. But things will get a lot uglier than this before it's all said and done. If people want a place where posters only enthuse about the proposal, it's probably best to start a separate thread.

I think it's a little premature to say any of that. The general consensus from co-workers that I've spoken with so far is that they are excited about the prospect of these facilities. These aren't die hard fans and they haven't been waiting for this announcement like we have.

They seem to be not all that interested in learning about the specifics of financing and what not. A few have been on the fence and have a "wait and see approach" but I haven't come across people calling this proposal "garbage" and saying that "it needs to be destroyed" like in this thread.

There's just too much hyperbole and overreaction going on in this thread from a few. I guess that's to be excited with a passionate fan base though

[calf]

Originally Posted by Bingo

Those in the know on city taxation, CRLs etc ...

I've seen this statement, is it true? (guessing I'll hear it is and it isn't )

"If you are a Calgary citizen, not living in West Village the extent of your contribution to this project is the $200M that the city had planned (unfunded) for the field house."

Because I think that's really key in this argument.

I've been struggling with this, but I don't think it works out that way.

This link explains it pretty well for current CRL's in the city: http://www.calgary.ca/CA/fs/Pages/Pr...-District.aspx

How I'm interpreting it is that it's not really an incremental tax for West Village occupants, rather, as their mill rate goes up with higher property values the same amount goes to city revenues and the difference to the arena, meaning the rest of the city picks up the tab for the resulting shortfall as a result of this diversion (if everything is kept equal).

[saillias]

Is it just me or does it take mental gymnastics to call the $250m ticket levy part of the owner's contribution. Nah I'm pretty sure that's our contribution. As Flames fans that will be attending the games.

Yes thank you to our generous owner overlords. So selfless coming up with that money out of their pocket that they just picked out of ours.

This is just something I've heard repeatedly over the past few days, the guys on the Fan 960 were saying it, and some posts here are saying it.

[Weitz]

Originally Posted by Zarley

After having a few days to digest the proposal, here are my thoughts:


Financing Plan: B

I know that plenty of people are whinging about this (billionaire owners and millionaire players!, rabble rabble, Spendshi etc.) and there is going to be a huge fight regardless of how reasonable the proposal is, but I was pleasantly surprised to see the Flames putting up as much coin as they are for this.

By putting up $450 million ($200M cash, $250M in ticket levy) the Flames are essentially taking care of the arena portion of the project with entirely private money. This a better deal than what Edmonton ended up with and more in line with the way that Toronto, Montreal, and Vancouver financed their buildings.

As I stated above, there is no economic case for privately financed football stadium. We are in need of a new one and the only way this will be achieved is with a public contribution. Including a fieldhouse and community rink makes this far more palatable for public investment.

The CRL should be the main point of contention with this plan. A CRL is would likely be used to finance redevelopment of the West Village in any case. Can redevelopment of the area and construction of the complex be completed with a $240 million CRL? And will subsequent private development in the West Village be valuable enough to support payback of the initial loan? This depends on how well executed the development is.

Great thoughts.

I want to comment on this part. As it hasn't been determined the Flames are putting up the ticket levy we don't know if they are contributing 450 million. Which is going to be a ticket tax on us.. so if anything they aren't putting up that extra 250 million.

[heep223]

Originally Posted by CliffFletcher

The timing on this is terrible.....Colley-Urquhart mentioned that the Flames have been batting things around with the City for 10 years now.

She also directly said that the timing of this is excellent.

Originally Posted by CliffFletcher

The great majority of Calgarians are not onside with this.

Source? The proposal came out like 2 days ago.

Originally Posted by saillias

Is it just me or does it take mental gymnastics to call the $250m ticket levy part of the owner's contribution. Nah I'm pretty sure that's our contribution. As Flames fans that will be attending the games.

Yes thank you to our generous owner overlords. So selfless coming up with that money out of their pocket that they just picked out of ours.

I initially thought this as well, but somebody made a great point earlier. The ticket price is the ticket price as dictated by market demand. It's not like the market is going to set ticket prices and then add another $10 tax. So really that money is coming out of ownership's pocket.

[1991 Canadian]

Originally Posted by saillias

So when? As a STH no thank you to 15 more years at the Dome. It's an obsolete stadium now, what will it be in 5-7 years?

Unless they keep stuffing more cars into the already overcrowded concourse, I don't see how the Saddledome experience is going to get worse.

It is going to be the same outdated stadium it is today as it will be 5 to 7 to 15 years from now.

[CroFlames]

Originally Posted by 1991 Canadian

Unless they keep stuffing more cars into the already overcrowded concourse, I don't see how the Saddledome experience is going to get worse.

It is going to be the same outdated stadium it is today as it will be 5 to 7 to 15 years from now.

Line the concourse with porta potties. Voila, modern stadium.

In place of the cars mid-concourse, replace with food trucks. Voila, modern stadium.

Cover the concrete concourse in Epoxy. Voila, modern stadium.

Spoiler!

[Leeman4Gilmour]

Originally Posted by Zarley

.

Execution: C

The execution of the presentation thus far has left much to be desired. I realize that this is very conceptual in nature, but perhaps the plan shouldn't have been brought to the public at this stage? The renderings were weak, the district plan doesn't make sense, and the PowerPoint looks like it was thrown together in an afternoon. They've created many questions by not presenting a polished product.

Conversely, if they had developed a comprehensive plan and presented it, they risk public criticism for making backroom deals and not doing proper public engagement. It's really a lose-lose scenario.

I think it was a mistake not to breakdown the funding into different sources for the arena, and stadium/fieldhouse. Also, by calling it a ticket "tax" rather then a surcharge, they've confused people into thinking that this is a public contribution.

I'd hope that they bring in some private sector partners or consultants with experience in development. This project is very important for the city and will require some skill to get it off the ground.

I didn't mind them bringing it out at such a raw stage. I also suspect they may have presented it as raw as they did intentionally (as in, a tad more detail likely exists). They would (or should) have done a tonne of work on stakeholder consultation with the last stakeholder being Joe Public. Rather, than inundate Joe with a tonne of details which will take a tremendous amount of time to clarify, provide the basic information. Feedback from this level of information will allow you to adjust the detailed information accordingly prior to releasing it.

[ThisIsAnOutrage]

Just throwing this out there, not saying if I think it's a good idea or not, since I'm really not sure:

Forbes estimates the value of the Flames at 451mil as of November 2014: http://www.forbes.com/teams/calgary-flames/

Accepting that KK et al are contributing 450mil to the 890mil + 50-300mil remediation, they are asking for about 500mil in public money at least. That's more than the value of the Flames franchise.

If the public is putting up more than Flames are worth why shouldn't the City/Province/Feds whichever level of government(s) is involved in making this happen, get to own - as the silentest of partners - 50% of the Flames, or even 50% of CSE - and get repaid through revenue and then CSE gets an option to buyout the public ownership once the money is repaid?

In the end CSE gets the shiny new buildings, and the City gets its money back, and both organizations have huge incentive to do everything as efficiently and as profitably as possible.

[saillias]

Originally Posted by heep223

She also directly said that the timing of this is excellent.



Source? The proposal came out like 2 days ago.



I initially thought this as well, but somebody made a great point earlier. The ticket price is the ticket price as dictated by market demand. It's not like the market is going to set ticket prices and then add another $10 tax. So really that money is coming out of ownership's pocket.

So the price of the ticket is not going to be impacted then? They are just taking say 10% off their gate revenue to put towards the project? I'm not quite sure I understand what this is saying.

[Komskies]

CRL = Community Revitalization Levy?

[Senator Clay Davis]

Originally Posted by heep223

I initially thought this as well, but somebody made a great point earlier. The ticket price is the ticket price as dictated by market demand. It's not like the market is going to set ticket prices and then add another $10 tax. So really that money is coming out of ownership's pocket.

People always leave out a very important factor in this: Ticket prices are 100% guaranteed to increase in a new building. To me there's no debate on that issue, the Flames are not keeping prices as is, and obviously a reduction is never happening. Particularly not when (in theory) it should be a top level team and not the Oilers.

Ticket price increases in new buildings across North America have ranged from 10% to 40% just moving to a new building. Could it affect demand? I actually doubt it, Calgary even in a down time is still a rich city in the NHL landscape. If its a playoff team or Cup contender, demand is not going anywhere but up.

So if fans will accept ticket price increases of 10-40% just moving to a new building (which in virtually all cases they have), I don't think adding a $10 ticket surcharge is going to have much effect on demand. It might hurt the Hitmen, but not the Flames.