[News] Bettman urges new arena ASAP

[GioforPM]

Originally Posted by Textcritic

I think what nik- and others are trying to point out is that the existence of any "multiplier effect" of large sports stadiums on local economies is anecdotal. I would expect this effect is something that is quantifiable, and if so, then there really shouldn't be any problem with publishing these figures. I don't know much about this, but I am at the outset dubious regarding the positive economic impact of privately owned sports franchises more generally. You seem convinced of it, and I would like to know why.

I think there are studies, but they all have to be considered based on who was providing them and why. I haven't seen many independent ones.

[Regorium]

Originally Posted by GioforPM

I think the Flames haven't sold well. However, there are some people who will never be sold on the concept they want to go with. More precisely, for some here, there's basically no public contribution that's acceptable, whether it be money, free land or free rent, which is a perfectly valid opinion. I just think those who hold that view should just say it and not criticize location/facility/communication style/sales pitch. They also seem to think that, because Nenshi seems to have the same view, any manner in which he communicates that is just fine.

If this is the view of the City, they should just say so as well, and not say "we will look at your proposal" or ask for studies. I am not sure that stops the Flames from pushing it and trying to get public support, but at least residents will know the stance.

I think at the same time, people that want the city to pay for the Flames should just admit that they love the feeling and the prestige of having the Flames in Calgary, and don't use any economic arguments. There is literally zero (if not negative) economic impact for using public money for a stadium.

https://www.stlouisfed.org/Publicati...rts-Facilities

Any arguments for using public money is really out of fear of losing the Flames, the emotions that an amazing 2004 stanley cup could bring to each of us, and of course for 20,000 people for 41 nights a year, the chance to experience a live NHL game. There are zero economic benefits.

I will admit - and I have posted many times about it, that I do not want any public money going towards the Flames. I would use public money to clean up the land, and then developers can take it from there.

[GioforPM]

http://www.humankinetics.com/excerpt...s-teams-events

http://www.cbc.ca/news/canada/why-fu...-bet-1.1378210

http://www.mintpressnews.com/stadium...nomics/190351/

[GioforPM]

one more:

http://www.jsonline.com/news/milwauk...201706591.html

[GioforPM]

d/p

[Enoch Root]

Originally Posted by Textcritic

I think what nik- and others are trying to point out is that the existence of any "multiplier effect" of large sports stadiums on local economies is anecdotal. I would expect this effect is something that is quantifiable, and if so, then there really shouldn't be any problem with publishing these figures. I don't know much about this, but I am at the outset dubious regarding the positive economic impact of privately owned sports franchises more generally. You seem convinced of it, and I would like to know why.

I agree that it is anecdotal. Attempting to draw direct links from one investment to other pods of growth is essentially unprovable. However, the proof is in the growth of our economies overall:

Businesses create jobs and wealth. Businesses and their employees pay taxes. Pretty straight-forward. It is the fundamental principle of investment. The ONLY reason to take the risk of investing capital is growth - an expected return. And every day, trillions is invested because growth happens. Pretty straight-forward.

Governments generally don't invest, however, they are in a position to lend funds to capital-intensive projects. And the return is not just the interest, but also a larger economy on which to tax, along with some sort of a presumed better living experience or whatever.

This is essentially - in simple, internet sentences - the basis on which our economy, and capitalism in general, works.

Some people don't seem to agree. Why, I don't know, because the evidence, while anecdotal, is also insurmountable. Nonetheless, some don't. That is their prerogative.

As a business owner, and investment manager, I understand that business profitability is wealth creation. It is the backbone of the economy and the primary source of growth.

IMO, having governments support, and lend resources to, capital-intensive projects, is a useful and production function for said government to partake in. Growth benefits everyone.

[IliketoPuck]

Originally Posted by nik-

So yeah ... it was bike lanes then. Got it.

You win, bike lanes (that I use) are the only budgetary decision city council has made that I disagree with. Our fine aldermen/women and Mayor are excellent stewards of capital, and above reproach or criticism.

I'll show myself out as its been quite the day. Forgive me, but my ability to engage in a meaningful debate is non-existent. All I've got is sarcastic one liners.

[nik-]

Originally Posted by IliketoPuck

You win, bike lanes (that I use) are the only budgetary decision city council has made that I disagree with. Our fine aldermen/women and Mayor are excellent stewards of capital, and above reproach or criticism.

I'll show myself out as its been quite the day. Forgive me, but my ability to engage in a meaningful debate is non-existent. All I've got is sarcastic one liners.

I'm just asking for an example of these seemingly numerous projects that are a waste of money. You don't answer and then go on a mini-rant about bike lanes, after you had stated that you weren't referring to them. What kind of response is one supposed to put in that case?

In this thread we have people making claims about the financial benefits of city funded stadiums and claiming that the city funds a bunch of pet projects which are a waste of money. Which they then follow up with refusing to present examples of either. It's getting pretty tiring.

[Cappy]

Originally Posted by Enoch Root

I agree that it is anecdotal. Attempting to draw direct links from one investment to other pods of growth is essentially unprovable. However, the proof is in the growth of our economies overall:

Businesses create jobs and wealth. Businesses and their employees pay taxes. Pretty straight-forward. It is the fundamental principle of investment. The ONLY reason to take the risk of investing capital is growth - an expected return. And every day, trillions is invested because growth happens. Pretty straight-forward.

Governments generally don't invest, however, they are in a position to lend funds to capital-intensive projects. And the return is not just the interest, but also a larger economy on which to tax, along with some sort of a presumed better living experience or whatever.

This is essentially - in simple, internet sentences - the basis on which our economy, and capitalism in general, works.

Some people don't seem to agree. Why, I don't know, because the evidence, while anecdotal, is also insurmountable. Nonetheless, some don't. That is their prerogative.

As a business owner, and investment manager, I understand that business profitability is wealth creation. It is the backbone of the economy and the primary source of growth.

IMO, having governments support, and lend resources to, capital-intensive projects, is a useful and production function for said government to partake in. Growth benefits everyone.

Anecdotal evidence can never be called insurmountable. It's anecdotal. Especially when there are countless independent studies that have found negligible growth from the construction of stadiums.

You also have to look at the opportunity cost of the money. As an investment manager, I'm sure you have pulled the plug on a few investments where the returns were less than ideal. That money could be better utilized in a different investment, that could grant higher returns.

Cities have the same issue. Yes growth is good. Do stadiums provide it? most signs point to no, if very little. Could cities make better use of the money? they sure could. Even the economist in the John Oliver segment noted that the city could see a greater ROI by simply throwing a billion dollars out of an airplane over downtown.

Cities shouldn't always look at their ROI when deciding to fund a project, as they are in the business of providing public goods, first and foremost. But, when something controversial like this enters the conversation, where the main benefactor from the project will reap immense income from the project, and where said benefactor touts the economic benefits to the city as main factor in contributing public dollars to the project, then it's important for the city to look at the financial aspect of the project and see if it works.

[Enoch Root]

Originally Posted by Cappy

Anecdotal evidence can never be called insurmountable. It's anecdotal. Especially when there are countless independent studies that have found negligible growth from the construction of stadiums.

You also have to look at the opportunity cost of the money. As an investment manager, I'm sure you have pulled the plug on a few investments where the returns were less than ideal. That money could be better utilized in a different investment, that could grant higher returns.

Cities have the same issue. Yes growth is good. Do stadiums provide it? most signs point to no, if very little. Could cities make better use of the money? they sure could. Even the economist in the John Oliver segment noted that the city could see a greater ROI by simply throwing a billion dollars out of an airplane over downtown.

Cities shouldn't always look at their ROI when deciding to fund a project, as they are in the business of providing public goods, first and foremost. But, when something controversial like this enters the conversation, where the main benefactor from the project will reap immense income from the project, and where said benefactor touts the economic benefits to the city as main factor in contributing public dollars to the project, then it's important for the city to look at the financial aspect of the project and see if it works.

agreed, as well as other potential benefits

[IliketoPuck]

Leaving for dinner, but off the top of my head things that have annoyed me lately are the peace bridge, bike lanes, art work around the city, the airport tunnel fiasco, etc.

If you want me to start digging into it further and to provide some more detailed examples with numbers I'm happy to do so. Actually, you've inspired me. I will take a look at some of the questionable choices made and present the numbers to further things along.

Might be tomorrow or the weekend, but I will do some digging and get back to you.

[GirlySports]

Originally Posted by Cappy

Anecdotal evidence can never be called insurmountable. It's anecdotal. Especially when there are countless independent studies that have found negligible growth from the construction of stadiums.

You also have to look at the opportunity cost of the money. As an investment manager, I'm sure you have pulled the plug on a few investments where the returns were less than ideal. That money could be better utilized in a different investment, that could grant higher returns.

Cities have the same issue. Yes growth is good. Do stadiums provide it? most signs point to no, if very little. Could cities make better use of the money? they sure could. Even the economist in the John Oliver segment noted that the city could see a greater ROI by simply throwing a billion dollars out of an airplane over downtown.

Cities shouldn't always look at their ROI when deciding to fund a project, as they are in the business of providing public goods, first and foremost. But, when something controversial like this enters the conversation, where the main benefactor from the project will reap immense income from the project, and where said benefactor touts the economic benefits to the city as main factor in contributing public dollars to the project, then it's important for the city to look at the financial aspect of the project and see if it works.

I think it's a question of how much of the fringe benefits involve people starting businesses around the stadium and than end up growing available capital to be spent as a whole?

I suppose there is the argument that you're just displacing spent income from one area to another but I don't necessarily buy that. I'm aware some people work off a budget, but I'm fortunate enough not to and if there is maybe a new restaurant or recreational thing in a part of town I haven't tried before, I might go spend money on that that I wouldn't have spent otherwise. Or would have spent on some makeup at Sephora, which doesn't exactly keep my money in my community.

[Cappy]

Originally Posted by Enoch Root

agreed, as well as other potential benefits

Of course!

Many different factors to look at:

financial
cultural
social

With each proposal, we must look at whether these benefits exist; how big the benefit is; whether the benefits outweigh the costs; whether the costs would create a greater benefit elsewhere.

[heep223]

Why don't the Flames replace the CRL by issuing their own bonds?

$200M equity from CSE
$200M from city (fieldhouse)
$250M user fee
$240M CSE 10 year bonds

City pays for cleanup, with whatever mechanism such as a CRL. I just don't see any other way around this. They can go hat in hand to the province and/or the feds if need be, but no developer will pay for the cleanup, be it CSE or a typical commercial developer.

At 5% those bonds would cost them $12M in interest annually. No idea on CSE earnings or what the incremental revenue would be from the new arena, but I'm sure it would still make a ton of sense.

If they changed their proposal to this structure and released the actual rendering and plan, I'm sure it would be rubber stamped almost immediately.

Plus I'd probably buy some CSE bonds haha, that way it's almost like I'm paying myself to go to games

[Regorium]

Originally Posted by GirlySports

I think it's a question of how much of the fringe benefits involve people starting businesses around the stadium and than end up growing available capital to be spent as a whole?

So what businesses has the Saddledome created?

The problem with businesses built around a stadium is the complete lack of traffic on days when there's no event going on. It also sterilizes the entire area around it because of the need for gigantic parking lots. The arena itself is isolated and doesn't draw tourists. People don't just lounge near the Saddledome on a weekend (compared to the pathways, for example).

The general consensus from every study basically says that the arena itself does not create any wealth from new businesses.

The billion dollars out of a plane example is basically saying you get a 1x multiplier (you invest 1 billion, you gain 1 billion of benefit). A billion dollars for an arena has generally shown to be less than that - especially when considering opportunity cost.

On the other hand, as I've posted in the last couple posts, there are emotional/social reasons for keeping the flames in town that has value as well. I just do not accept the economic argument at all.

[Cappy]

Originally Posted by GirlySports

I think it's a question of how much of the fringe benefits involve people starting businesses around the stadium and than end up growing available capital to be spent as a whole?

I suppose there is the argument that you're just displacing spent income from one area to another but I don't necessarily buy that. I'm aware some people work off a budget, but I'm fortunate enough not to and if there is maybe a new restaurant or recreational thing in a part of town I haven't tried before, I might go spend money on that that I wouldn't have spent otherwise. Or would have spent on some makeup at Sephora, which doesn't exactly keep my money in my community.

I understand the argument, but most studies have shown that this scenario is either untrue or gross exaggerated by the powers that be.

[Southside]

Originally Posted by heep223

Why don't the Flames replace the CRL by issuing their own bonds?

$200M equity from CSE
$200M from city (fieldhouse)
$250M user fee
$240M CSE 10 year bonds

City pays for cleanup, with whatever mechanism such as a CRL. I just don't see any other way around this. They can go hat in hand to the province and/or the feds if need be, but no developer will pay for the cleanup, be it CSE or a typical commercial developer.

At 5% those bonds would cost them $12M in interest annually. No idea on CSE earnings or what the incremental revenue would be from the new arena, but I'm sure it would still make a ton of sense.

If they changed their proposal to this structure and released the actual rendering and plan, I'm sure it would be rubber stamped almost immediately.

Plus I'd probably buy some CSE bonds haha, that way it's almost like I'm paying myself to go to games

I've mentioned bonds before too. Maybe they will have to move in that direction. I'm sure many fans would invest for sentimental reasons. Not sure they would attract interest from the street but that might depend upon the interest rate.

[GirlySports]

Originally Posted by Regorium

So what businesses has the Saddledome created?

The problem with businesses built around a stadium is the complete lack of traffic on days when there's no event going on. It also sterilizes the entire area around it because of the need for gigantic parking lots. The arena itself is isolated and doesn't draw tourists. People don't just lounge near the Saddledome on a weekend (compared to the pathways, for example).

The general consensus from every study basically says that the arena itself does not create any wealth from new businesses.

The billion dollars out of a plane example is basically saying you get a 1x multiplier (you invest 1 billion, you gain 1 billion of benefit). A billion dollars for an arena has generally shown to be less than that - especially when considering opportunity cost.

On the other hand, as I've posted in the last couple posts, there are emotional/social reasons for keeping the flames in town that has value as well. I just do not accept the economic argument at all.

True enough. Why it is that Victoria Park wasn't developed in the 90s and instead we had Electric Avenue and later the Red Mile blocks away? Was it the lack of condos? Really bad area of town? Only recently is there that business district at Cowboys Casino but that's it.

With planning could you build an arena + stadium + restaurants + condos as a complex? Have more events in the facilities.

[Dion]

Calgary Poll Question January 12, 2016
Whose position do you agree with on funding for the CalgaryNEXT arena project?

NHL Commissioner Gary Bettman - 816 (31 %)
Calgary Mayor Naheed Nenshi - 1857 (69 %)

http://calgary.ctvnews.ca/more/poll-results

[Enoch Root]

Originally Posted by Regorium

So what businesses has the Saddledome created?

Bit of a non-starter with the Dome being on Stampede grounds

The problem with businesses built around a stadium is the complete lack of traffic on days when there's no event going on. It also sterilizes the entire area around it because of the need for gigantic parking lots. The arena itself is isolated and doesn't draw tourists. People don't just lounge near the Saddledome on a weekend (compared to the pathways, for example).

The general consensus from every study basically says that the arena itself does not create any wealth from new businesses.

The billion dollars out of a plane example is basically saying you get a 1x multiplier (you invest 1 billion, you gain 1 billion of benefit). A billion dollars for an arena has generally shown to be less than that - especially when considering opportunity cost.

On the other hand, as I've posted in the last couple posts, there are emotional/social reasons for keeping the flames in town that has value as well. I just do not accept the economic argument at all.

These issues apply more when the arena is somewhat isolated. The whole idea of a downtown location is the ability for people to access by walking and/or transit. That facilitates more opportunity for sundry development like restaurants.

Downtown development begets downtown residential growth, which begets more development.