CalgaryNEXT Discussion pt. 2

[Frequitude]

Originally Posted by Weitz

Does the city get 50% of the revenue?

Was just simply responding to the point that it was unfair for the Flames to say they're sharing 50% of the cost.

[Cyclops]

Originally Posted by New Era

This line of thinking does not apply to the Flames IMO. The Flames ownership group have run this team like a community owned enterprise since they bought the team from Nelson Scalbania. The owners have always operated the team as a non-profit, donating millions to the local community. To me, the community gains as much benefit from the Flames being in Calgary as the ownership group. For that reason I see the community kicking in and having partial ownership of the new facility. The renderings may not be to people's likings, but we are at the enception stage at this point. I'm sure if people want sexier cgi renderings that will make your mouth water, those could be generated. Personally, I don't need the shiny disco ball to envision the end result. I think this is good for the Flames and is very good for the community. The only way the Flames make big dollars off of this is if the real estate ventures they develop around the new buildings. The buildings themselves are break-even propositions and there for the public's use.

So you have anything I can look at in regards to the Flames running a non profit business? I'm not saying you are wrong but I am doubting it. TELUS puts quite a bit of money into the community as well, should we be footing half the bill for any new data centers or towers they might need?

[monkeyman]

Originally Posted by Muta

It's been talked about before, but there is more than casual interest in bringing in an MLS team down the line. They'd be a good second anchor for the new fieldhouse / stadium.

Is another major tenant even a good thing? Every event and practice would take away from a fieldhouse and its inteded purpose, to provide a major training facility for amateur athletes. With two major teams in there itll be pretty busy from june until october. Throw in the parking and traffic congestion thats already been talked about on flames game days from October to April... It really isnt ideal for a fieldhouse. The stadium/fieldhouse idea should be scrapped. Like i said before, Its a homer.

[DiracSpike]

I personally think you'd have to be an idiot to bring an MLS team to Calgary.

The city has shown its incapable of supporting anything other than hockey and a really successful CFL team.

[Parallex]

Originally Posted by Frequitude

but it is accurate to portray it as close to 50/50. Ticket tax is money out of the owners pockets. It is effectively a tax on their future revenues.

They're not fronting the money (and therefor sharing in any of the risk) so I don't consider that an equitable split of costs. If the user rate falls short of projections (which we haven't seen) the city is the one left holding the bag on the shortfall. Another thing is that we don’t have any details regarding CS&E’s “200M” IIRC in Edmonton they initially made it look like Katz was fronting more of the money then he actually was since he was including the rent on the lease as part of his “contribution” (their proposed terms of the lease is another aspect that they’ve been notably silent on). Then we get into the revenue related problems of the “100% city asset” ownership aspect of their proposal… 100% city asset means no $$ for the city on the foregone land sales and no resultant property tax.

If the Flames want to partner with the city I’m fine with that… but make it a real partnership and not some sham of a deal where the public pays most of the cost and private enterprise reaps most of the revenue. I want a fair deal for our city and a fair deal for our city in a PPP is a deal that using realistic projections results in it at least breaking even in terms of direct revenue received less direct cost incurred.

[Parallex]

Originally Posted by Regorium

"Function normally" in the context of arenas generally means that the city is left holding the bag.

I (and many others) have provided numerous examples of bad deals. Can you even find a single good public-private arena deal?

My definition of "good" is that the city broke even. Pretty low bar wouldn't you agree?

Yeah this was basically what I was looking to get when I asked for citations. Specific deals that were demonstratively financially good for all parties concerned.

[Enoch Root]

Originally Posted by Regorium

"Function normally" in the context of arenas generally means that the city is left holding the bag.

I (and many others) have provided numerous examples of bad deals. Can you even find a single good public-private arena deal?

My definition of "good" is that the city broke even. Pretty low bar wouldn't you agree?

Function normally means that some kind of tax or ticket tax was used to fund the facility, and then the use of the facility paid it back. Pretty straight-forward.

As I have said several times, there is an arena and/or stadium in virtually every city. The vast majority are (at least partially) funded with public money. In many, if not most of those cases, there is some form of ongoing tax to cover the costs.

Again, in most cases, they work fine. Some quick examples of cities where there was either a ticket tax, or a sales tax, or a hotel tax, or whatever, that did its job so to speak includes: Cleveland, Dallas, Houston, Miami, Tampa, Nashville, St Paul, Arlington, to name a few, and there are many others.

This discussion was about the viability of a ticket tax and the riskiness of its ability to to meet the payments of the debt service.

No one has made any argument that might suggest the ticket tax would be risky or on shaky ground. The Flames aren't just one tenant, they are (at least) three. The viability of the primary tenant (the Flames) is hard to dispute.

That was the point, and moving the goalposts to disputes about whether a team should be paying rent or not, or another deal was poorly constructed because teams didn't have to pay rent unless they were profitable or whatever, does not change that.

[Lanny_McDonald]

Originally Posted by Cyclops

So you have anything I can look at in regards to the Flames running a non profit business? I'm not saying you are wrong but I am doubting it. TELUS puts quite a bit of money into the community as well, should we be footing half the bill for any new data centers or towers they might need?

Look up the Flames Foundation. Lots of stuff out there on it. Very active in the community and very generous in their giving. Kind of sad that the average Calgarian is not aware of the incredible work they do for the community at large.

[Cappy]

Originally Posted by New Era

Look up the Flames Foundation. Lots of stuff out there on it. Very active in the community and very generous in their giving. Kind of sad that the average Calgarian is not aware of the incredible work they do for the community at large.

I don't think anyone is denying the Flames donate money to the community. I think we are skeptical that the amount of donation (and the fact that other corporations donate money to the community) justifies the type of ask they want?

I seriously question the "non-profit" assertion. Unfortunately, there is no way either you or I could prove this as the books are closed...

[Cappy]

Originally Posted by Frequitude

Was just simply responding to the point that it was unfair for the Flames to say they're sharing 50% of the cost.

It's a user tax. That is still a tax that citizens will pay.

The ticket tax will be added to the price of the ticket. It will have no effect on the overall cost of the ticket.

As buddy with horrible taste in friends noted, Edmonton's prices are increasing dramatically; not including the ticket tax.

Sure, it's not the city's money, but it certainly isn't the Flames money either.

[Cappy]

Originally Posted by Enoch Root

Function normally means that some kind of tax or ticket tax was used to fund the facility, and then the use of the facility paid it back. Pretty straight-forward.

As I have said several times, there is an arena and/or stadium in virtually every city. The vast majority are (at least partially) funded with public money. In many, if not most of those cases, there is some form of ongoing tax to cover the costs.

Again, in most cases, they work fine. Some quick examples of cities where there was either a ticket tax, or a sales tax, or a hotel tax, or whatever, that did its job so to speak includes: Cleveland, Dallas, Houston, Miami, Tampa, Nashville, St Paul, Arlington, to name a few, and there are many others.

This discussion was about the viability of a ticket tax and the riskiness of its ability to to meet the payments of the debt service.

No one has made any argument that might suggest the ticket tax would be risky or on shaky ground. The Flames aren't just one tenant, they are (at least) three. The viability of the primary tenant (the Flames) is hard to dispute.

That was the point, and moving the goalposts to disputes about whether a team should be paying rent or not, or another deal was poorly constructed because teams didn't have to pay rent unless they were profitable or whatever, does not change that.

That's a fair point. An example would be Denver and Coors Field, which the Muni introduced a 2% sales tax to pay for the Field - I believe the stadium has been paid off, or is close to it.

But, I would still question whether I would want my city adding a tax like that for a baseball stadium. That is what i take issue with.

A benefit is the Flames have not discussed Personal Seat Licenses (PCL's) as those are a massive butt hurt for the fans and season ticket owners.

[PeteMoss]

Calgary isn't getting a MLS team unless the league decides to expand to 50 teams if they don't get a lower league team and show they'll support it.

[Lanny_McDonald]

Originally Posted by Cappy

I don't think anyone is denying the Flames donate money to the community. I think we are skeptical that the amount of donation (and the fact that other corporations donate money to the community) justifies the type of ask they want?

Really? Can you think of another Calgary based non-charity interest that has dedicated 36 years to supporting the community as part of their operational mission? How many companies provide fund raising opportunities for charities like the Flames? There may be corporations that donate money to charities, and do so on a regular basis through the likes of the United Way and such, but how many of them take an active highly visible role in the community at large? The profile the Flames and their family of athletes, current and past, bring a level of credibility to these charitable efforts that your dear corporations just can't buy.

I seriously question the "non-profit" assertion. Unfortunately, there is no way either you or I could prove this as the books are closed...

The Flames have been run as a non-profit interest since they arrived in town. That was the desire of the original ownership group and that spirit continues on today. They do not profiteer from the enterprise and are just short of operating like the Green Bay Packers, which are a true community owned non-profit bearing entity. The Flames do immeasurable goodwill in the community and are part of the fabric that is Calgary. It annoys me when their motives are second guessed like this, especially when they have put up with the Stampede Board for the past 35 years!

[Fire of the Phoenix]

Originally Posted by Erick Estrada

The Oilers have missed the playoffs for a decade running and still sell out which tells me they could easily raise ticket prices and sell out the new building regardless.

They're passionate, I'll give them that. Maybe a little lacking in the brains department, but there's some passion there. Katz has got to be happy about that.

[powderjunkie]

Originally Posted by New Era

Really? Can you think of another Calgary based non-charity interest that has dedicated 36 years to supporting the community as part of their operational mission? How many companies provide fund raising opportunities for charities like the Flames? There may be corporations that donate money to charities, and do so on a regular basis through the likes of the United Way and such, but how many of them take an active highly visible role in the community at large? The profile the Flames and their family of athletes, current and past, bring a level of credibility to these charitable efforts that your dear corporations just can't buy.



The Flames have been run as a non-profit interest since they arrived in town. That was the desire of the original ownership group and that spirit continues on today. They do not profiteer from the enterprise and are just short of operating like the Green Bay Packers, which are a true community owned non-profit bearing entity. The Flames do immeasurable goodwill in the community and are part of the fabric that is Calgary. It annoys me when their motives are second guessed like this, especially when they have put up with the Stampede Board for the past 35 years!

You answered your first question with your last sentence...the Calgary Stampede is legitimately a not-for-profit organization. I'm not sure about their charity preceding the Flames arrival, but I'm also not sure about how much charity the Flames did in their first few years either.

I hate the Stampede for a lot of reasons, but they are generally good corporate citizens, and do a lot on the arts and culture side for the city (look no further than the upcoming youth campus.

I have no doubt the Flames Foundation is a non-profit, but I'm skeptical about the Flames org as a whole (and haven't been able to find anything to support your assertion)...can you provide any evidence to support your claim? If they are a non-profit (I assume you actually mean not-for-profit), shouldn't they have stockpiled even more money to reinvest into their most predictable business need?

While you're at it, how about some evidence of actual conflict between Stampede and Flames (bonus if you can show that the Stampede was any more aggravating)?

[RM14]

Originally Posted by powderjunkie

I have no doubt the Flames Foundation is a non-profit, but I'm skeptical about the Flames org as a whole (and haven't been able to find anything to support your assertion)...can you provide any evidence to support your claim? If they are a non-profit (I assume you actually mean not-for-profit), shouldn't they have stockpiled even more money to reinvest into their most predictable business need?

The next fan gathering where executives are present I recommend you ask for yourself. Owner withdrawals from the franchise have never happened. Just ask.

And ya ya.... Theyre ownership interest has increased substantially since original investments. But that equity is not realized until sold and value could crash same as it has risen.

[Kavvy]

I love that there are hopes to bring a MLS team to use this new field house.

Field House use:

For Profit CFL team? Check
Fort Profit MLS team? Check

Amateurs? If room permits. But the city is in desperate need of this facility for the people of Calgary so we should built it with the CalgaryNEXT proposal.

[Roughneck]

Originally Posted by Cappy

That's a fair point. An example would be Denver and Coors Field, which the Muni introduced a 2% sales tax to pay for the Field - I believe the stadium has been paid off, or is close to it.

Sales taxes aren't an option for Calgary, need ot be imposed provincially. Plus a sales tax size similar to Denver would stretch from Red Deer to High River and include twice as many people paying it.

This wasn't a user fee, it was just a tax. Basically like Alberta deciding to fund both arenas in Edmonton and Calgary by introducing a PST.

But, I would still question whether I would want my city adding a tax like that for a baseball stadium. That is what i take issue with.

Some would take issue with why the Broncos were able to collect half the naming rights money for a stadium owned by a public trust when people who didn't use or want the stadium were paying a sales tax on it, but that was a different debate that was had.

A benefit is the Flames have not discussed Personal Seat Licenses (PCL's) as those are a massive butt hurt for the fans and season ticket owners.

Instead they decided to double up on a ticket surcharge idea that will cost people in Edmonton 7% of their ticket prices, so definitely a win for the fans there.

[powderjunkie]

Originally Posted by RM14

The next fan gathering where executives are present I recommend you ask for yourself. Owner withdrawals from the franchise have never happened. Just ask.

And ya ya.... Theyre ownership interest has increased substantially since original investments. But that equity is not realized until sold and value could crash same as it has risen.

Fair enough, thanks.

How much will that equity value increase with a new building (even if the team doesn't own it)? The answer is lots.

The value of the Flames franchise has increased magnificently as it is, from $135M US in 2006 to $435M in the latest Forbe's.

Perhaps the Flames should give the city a 25% equity stake from any future sale in exchange for some of this public money? City should probably get naming rights to.

[Mr.Coffee]

Originally Posted by RM14

The next fan gathering where executives are present I recommend you ask for yourself. Owner withdrawals from the franchise have never happened. Just ask.

And ya ya.... Theyre ownership interest has increased substantially since original investments. But that equity is not realized until sold and value could crash same as it has risen.

What do you mean "ya ya"? As if that isn't relevant?

The owners don't own the Flames to give to charity. If they wanted to give to charity they'd give to charity. They own the Flames to make money. They do that primarily by increasing equity over time. You know they can re-invest profits to grow their business and then claim YOY they aren't taking dividends, right?

Increasing equity is not irrelevant, it's hundreds of millions of dollars here. These are not some hard done by group of people. Sure, they have spent other people's money Flames money on charitable donations and within the community to lock in the taxable benefit, but when:

a) books are more or less closed, so profits tough to determine
b) they can afford to raise the cap YOY on player salaries
c) they want, not need, a new arena with more luxury boxes to make even more money (you think that extra money is going to charity?)
d) they make millions off of their investments through equity stakes by re-investing profits...

like come on. This is so disingenuous it's embarrassing. Cyclops' point is right. It's about time we prioritize more important civic issues over professional hockey and entertainment. It's about time we take the emotion out of the decision and treat this like the business decision it is. A horrible, lopsided deal. If you look at this deal in its' present form and say yeah let's accept, I have to believe you're thinking with your heart and not your head.

This is about a Flames want, if they want it, go buy it. Don't drag us along pretending like it's a good deal, because it's not for a host of reasons previously mentioned.