CalgaryNEXT Discussion pt. 2

[Freeway]

I'd imagine they can build a world-class arena for $500 million (or south of that).

[GGG]

Originally Posted by Bend it like Bourgeois

For sure it was the whole point. It's clear that the city isn't a partner for the flames but an adversary, so getting them to do this work is the one smart step the teams have made so far.

The city pushed the goal posts out as far as possible, but now they exist. So now the flames have a chance to start working their way toward them, item by item and issue by issue. They may never get there, but each step also adds a little pressure on the city to move too.

That's an interesting way of looking at it and we know Murry Edwards isn't stupid and has made a great deal of money doing mega projects so your right that this is strategy.

However it is a terrible way to treat what should be a partnership. The fact that there is a 400 million dollar arena funded by a 200 million dollar ticket tax and a 100 million dollar flames contribution in there is promising eventual outcome to put the arena where it should go.

[DJones]

Can't say that study surprised me. Just made the contamination situation seem even worse. How long can they put that off for? Crowchild is also an embarrassment. That will eventually have to be fixed as well.

Seems like they just dug themselves a hole. The arena could be built elsewhere but Calgary will still be a billion dollars down with no field house.

[GullFoss]

It was a clever move by the flames in my opinion.

1) First, they got the city to acknowledge scale benefits from integrating the field house facility into a multi-purpose facility. As a result, when the field house gets built in the next 10 years, the stamps will have a place to play. Free stadium for the stamps? Check

2) the city has propsed the stampede grounds for the new stadium. So now the flames have basicly been offered free land on the grounds.

Free land? Check

4) an olympic bid? That would require a new facility for ceremonies, speed skating, curling. That could all fit into a field house!!! Could that go on stampede grounds? With transit connections?

Downtown stamps stadium? Check
Free land for stadium? Check
Free stamps stadium? Check
Free transit connections? Check

5) the province and feds have said theyd look at subsidizing a stadium. Both subsidized vancouvers olympic bid.

Pathway for subsidy for flames stadium from province and feds? Check



Where do we end up: flames get a free fieldhouse, transit connections, free land and provincial and federal subsidies for a new flames stadium. The flames probably end up paying less than C$200m up front, with some additonal money coming from a CRL and ticket tax.

The total cost is probably near $700m

[powderjunkie]

^ You have jumped to a lot of conclusions...a report exploring possibilities comes nowhere close to rubberstamping "free land" or "free" anything for that matter.

[powderjunkie]

Of the many, many damning things in this process, the timeline for cleanup has to be the biggest one. If I'm playing around on google maps looking at places to plop a new arena and/or stadium, my first questions are - could the land conceivably be available? how much will it cost? when could we put shovels in the ground?

Unless of course I was planning prudently 10-15 years before I knew I wanted to replace my current facility (I suspect they WANT it ASAP, but I contend the Saddledome could age as long and poorly as McMahon before it's truly NEEDED)...how in the world did KK and co. not get a sense of the timeline required for such a cleanup? The absolute best-case scenario for them would be at least 3 years (1 year for greenlight, 2 years of moving dirt), but more realistically at least 2 years before greenlight and 3-4 years moving dirt...then they can start construction. That would all assume that the facility project is the top priority and everything is geared towards getting it built...when in reality dealing with roads and infrastructure for the entire area would be the priority (hence the decade estimate).

I'd love to buy a house in the town of Banff. I know there are houses in Banff...I've seen them with my own eyes...so I'm just going to assume that I'll be able to purchase one. I'm going to dedicate myself to convincing my wife that it's a good idea...I mean...wildlife and fresh air and mountains! World-class! I'm not going to bother investigating any practical issues any further though...I mean, I think I heard something once that you have to work there to live there, but why should that apply to me? Besides, I'm sure there will be tons and tons of people who own property in that town that would be willing to sell me their house if I make them a fair offer. Hell, the town would probably let me build a 15 foot wall all around my new property to keep the bears out...not only that, but they'll pay for it!

[Frequitude]

“We remain committed to the concept and believe that we brought a vast amount to a public project,” King told the Calgary Sun shortly after receiving the 173-page report.

You see, Ken. There's your number one mistake. It's not a public project.

[RougeUnderoos]

So let's say I'm one of those people that doesn't know anything about how these things are done. What exactly does environmental remediation of this area mean? How do they do it?

Do they dig up all the contaminated soil and cart it off? Do they somehow "seal off" the contamination?

This latest news has it (rightly or wrongly) taking up to a decade and costing hundreds of millions of dollars. Why would it take so long and cost so much? It's not Three Mile Island on the Bow.

[Frequitude]

Originally Posted by Enoch Root

I haven't taken a close look at any of them yet, but I will say this: there is no way a ticket tax would cost the city $84M.

Making some quick assumptions of $200M, a 20 year term, and an interest rate of 3.75% (which sounds fairly reasonable), the total interest charge for the life of the loan would be $84M.

If the owners are expecting the up front "ticket tax" loan to be offered at 0% and your interest rate calculations are correct, then yes the ticket tax scheme would cost the city $84M. I have seen nothing to suggest it is at 0% but it's a plausible scenario.

Originally Posted by GullFoss

Isn't teh Stampede just a non-profit foundation that is "owned" by the city. If so, then wouldn't it just come down to the "net public benefit." What is more beneficial for the people of the city - (1) an awesome commercial, recreational and social district that can be used 355 days a year in the middle of the city or (2) the stampede which is used for 10 days a year?

The city would also get tax dollars on the stampede, could get a "development working interest" in exchange for the land

No. The city does not own the Stampede. It is its own not-for-profit entity. The city does own all the land because the Stampede bought it with their own dollars at full market value and gifted it back to the city for $0 in return for a long term $1/year lease. Also, the Stampede does have their own plans for "an awesome commercial, recreational and social district that can be used 355 days a year in the middle of the city" along Olympic Ave. though the Flames maybe moving to the West Village obviously put a dent in those plans.

Originally Posted by Kavvy

doesn't the stampede own it? They can choose to do with it what they please, including leaving it as it? This is why I was steering towards debating taxing them.

OK, but understand that taxing the Stampede means taking money away from the charities and causes to which they donate all profits. I'm not saying don't do that, just pointing out that it's not like the Stampede is some evil corporation stockpiling profits. They put it all back into the community.

Originally Posted by GullFoss

2) the city has propsed the stampede grounds for the new stadium. So now the flames have basicly been offered free land on the grounds.

Free land? Check

The city has no ability to offer the Flames Stampede land for free. It is already leased to the Stampede. They have merely directed the Flames towards the Stampede to work out a deal. And I doubt the Stampede would offer up a $0 sublease. Nor should they feel obliged to.

[Frequitude]

Originally Posted by RougeUnderoos

So let's say I'm one of those people that doesn't know anything about how these things are done. What exactly does environmental remediation of this area mean? How do they do it?

Do they dig up all the contaminated soil and cart it off? Do they somehow "seal off" the contamination?

This latest news has it (rightly or wrongly) taking up to a decade and costing hundreds of millions of dollars. Why would it take so long and cost so much? It's not Three Mile Island on the Bow.

You should go read the one report in the links provided. They did a pretty good job of explaining the options. Some include just that, trucking it away. Some involve solidifying the contaminants in place. Some involve treatin digging up the soil, treating it and replacing it.

[GullFoss]

Originally Posted by Frequitude

If the owners are expecting the up front "ticket tax" loan to be offered at 0% and your interest rate calculations are correct, then yes the ticket tax scheme would cost the city $84M. I have seen nothing to suggest it is at 0% but it's a plausible scenario.

No. The city does not own the Stampede. It is its own not-for-profit entity. The city does own all the land because the Stampede bought it with their own dollars at full market value and gifted it back to the city for $0 in return for a long term $1/year lease.

OK, but understand that taxing the Stampede means taking money away from the charities and causes to which they donate all profits. I'm not saying don't do that, just pointing out that it's not like the Stampede is some evil corporation stockpiling profits. They put it all back into the community.

The city has no ability to offer the Flames Stampede land for free. It is already leased to the Stampede. They have merely directed the Flames towards the Stampede to work out a deal. And I doubt the Stampede would offer up a $0 sublease. Nor should they feel obliged to.

The city owns the stampede grounds.. The stampede uses the land for free but the land is owned by the city. So i would think the city can do whatever it wants with that land.

[getbak]

Originally Posted by RougeUnderoos

So let's say I'm one of those people that doesn't know anything about how these things are done. What exactly does environmental remediation of this area mean? How do they do it?

Do they dig up all the contaminated soil and cart it off? Do they somehow "seal off" the contamination?

This latest news has it (rightly or wrongly) taking up to a decade and costing hundreds of millions of dollars. Why would it take so long and cost so much? It's not Three Mile Island on the Bow.

There are a few different options. Each one has different costs and time frames. The full report is Attachment 5 in the documents list...

Originally Posted by sureLoss

Full report available here:

http://agendaminutes.calgary.ca/sire...a&itemid=43230

The images on Pages 17 & 18 of the PDF show the location and extent of the contamination. Pages 26 & 27 break down the various options, their costs, and time frames.

The faster and more expensive options would dig it up and haul it away for disposal. The cheaper but slower options would treat the contaminants on location.

[Frequitude]

Originally Posted by GullFoss

The city owns the stampede grounds.. The stampede uses the land for free but the land is owned by the city. So i would think the city can do whatever it wants with that land.

Incorrect. The Stampede has a long term lease in place for $1/year. The low number is in consideration of the fact that the Stampede purchased most of the land themselves at full market value and gifted it to the city for $0. The city cannot do "whatever they want" with that land until the lease expires. Just like a landlord can't do whatever they want with their rental property when tenants are there under lease.

[GullFoss]

Ahh thanks...i was hoping someone would clear that up. Any idea when the lease expires?

[Frequitude]

2060. And it has a 50 year renewal term. See note 3d the 2013 annual report (I didn't dig too hard for something more recent since it wouldn't make a difference). I'd copy a quote here but I'm having trouble copying from the PDF on my iPad.

http://corporate.calgarystampede.com...Financials.pdf

[Kavvy]

Originally Posted by Frequitude

OK, but understand that taxing the Stampede means taking money away from the charities and causes to which they donate all profits. I'm not saying don't do that, just pointing out that it's not like the Stampede is some evil corporation stockpiling profits. They put it all back into the community.

This is hardly a reason to not apply property tax an organization, however, noting the historical reasons on how this this land was transferred (i.e. the stampede gave it up for free) and the long term lease in place, I obviously admit taxing the stampede has become a moot point.

[Enoch Root]

Originally Posted by Frequitude

If the owners are expecting the up front "ticket tax" loan to be offered at 0% and your interest rate calculations are correct, then yes the ticket tax scheme would cost the city $84M. I have seen nothing to suggest it is at 0% but it's a plausible scenario.

You're right, if they were asking for a 0% loan, then it would cost the city the $84M (or whatever the interest turned out to be).

However, there has been nothing to suggest that. From either side.

The original proposal said a ticket tax would fund $200M. That is something very different than saying, we would like a $200M 0% loan that a ticket tax would pay back.

Either CalgaryNEXT or the city is being very misleading here. Since 0% has not been mentioned once by either side, I am guessing it's the city.

[Erick Estrada]

King on 960 right now. Kind of reiterated what Francis wrote in that they are still committed to CalgaryNEXT. Kind of laughed about renovating McMahon saying they had already looked at that and it's simply not possible but if the city thinks it's possible he would love to see how they think it can be done. The fact the city thinks McMahon can be renovated is all you need to know that the city hasn't done all it's homework.

[1qqaaz]

He said that a 2026 Olympic bid would not have much impact on the duration of the project, as the chances of it actually happening are quite remote. He also said that the project could be expedited to be completed more quickly than the city's estimates. The Flames didn't contaminate the land, so they shouldn't have to play for it, etc.

Apparently Calgary is the 6th best sport city in the world, but that won't last with the current stadiums/sporting facilities. Ken King didn't think of a plan B, since they were assuming that someone else would come forward with a plan B.

He also spoke highly of Edmonton's "World Class" project, and claimed that they have been ambitious with how they will use their facility (World Cup). It almost seemed like he was trying to make us jealous.

Finally, he said that he didn't think the City of Calgary was trying to be adversarial in their approach. Many of them like several aspects of the Calgary Next Project.

[SuperMatt18]

I kind of feel like part of the issue here is that neither side is fully doing their homework, and are being biased in the assumptions for the report.

Feels like the city really inflated some of the costs and timelines on their end.

The Flames didn't include all of the necessary components on their end.

Would have been nice if the City and Council would have at least been a little more open to working together when this was first brought up to Nenshi in 2012, opposed to now negotiating and working it out in the public - makes both sides look bad IMO.