[News] Ken King: Flames' owners no longer pursuing new arena with City of Calgary

[transplant99]

Originally Posted by GGG

I'd be willing to confidently bet January 2020. If they are selling the team or moving I'd bet that isn't announced until 2022 but I would rather not lose the team pushing that far. Seattle is ripe for an expansion franchise and that can't happen if the flames move there so the flames threat as it stands now is relatively non-existent. In general we shouldn't panic at the first Bettman move. They haven't even brought in Seattle's NHL guy for a tour yet. The Seattle arena isn't approved or built yet. In my opinion Edmonton settled early and go a terrible deal.

Combine that with the fact the ticket market is rapidly changing right now might not even be a good time to build an Arena. I am of the mindset that in about 10 years Arenas will be 8,000-10,000 seat Luxury domes and priced accordingly and the flames will be sitting with the Skydome of NHL arena's the last one to be built before the great revenue shift that will occur when Facebook and twitter bought all the TV rights to the leagues. The value proposition on poor seats is diminishing rapidly.

No I am not worried about Seattle as the arena wont be able to house a team for at least 2 years from what i understand.

As for Seattles "guy" he is already an NHL ownership buddy being its Tim Leiweke (formerly CEO of MLSE and the Kings Anshueser group or whatever its called)and he has serious serious money behind him for either an expansion or relocation to Seattle. (Jerry Bruckheimer being one of the players)

That wont stop them from shopping ahead of time however. For sure the existing ownership around the league wants the expansion fee over any relocation, but be assured Edwards is in very tight with the BoG and all executives and they will not block him from making a move IMO.

I think the other major factor that will pressure the city long before any Flames move is the Olympic bid. Everyone and their dog already agrees that if they move ahead with the bid, they also have to build another arena. Thats not even up for debate. So again, if the city wants that, then they are best to make a deal sooner rather than later and risk losing a partner (who will pay more towards the rink than the city would) and having to build the whole thing on taxpayers money.

There are so many factors at play here, not the least of which was the throwing down of gauntlets by ownership on Tuesday and without question a powerplay to seek change at the civic level in October.

Heavy handed for sure, but part of playing in the big business sandbox.

[Makarov]

Originally Posted by longsuffering

I'll go on record with my bottom line.

The City provides the site and upgrades the infrastructure in the area - the same type as proposed in Nenshi's video - at their cost.

The City provides a cash grant of $100 million of the construction costs. I could also live with the City providing more initial funding as long as any contributions >$100 million are returned to the City via a revenue sharing mechanism.

ErikEstrada, transplant, New Era, ManhattanBoy, et al. What's your bottom line?

This is right around my comfort zone (maybe a little bit high if I'm nitpicking).

[GioforPM]

Originally Posted by longsuffering

Really? I've only critics use the term loan.

The City views it as an INVESTMENT - one that will show a return of more than -100%. It sounds to me like the city hopes to be 'breakeven' at the end of 30 years.

The Monsters!

I have heard it from various sources, on both of these threads.

[Hot_Flatus]

Originally Posted by GGG

We all know the Edmonton deal sucks. By the way are they cutting transit and roads because of all of the financing. To me using the ownerships proposal for CalgaryNext as a starting point for their proposal is pretty reasonable and we can refine as we learn details.

But it is absolute hyperbole that the city can't absorb 500 million in debt financing without affecting other services. They can, full stop. They are no where near the financial borrowing capacity for the city. They are currently approaching their self imposed limit which is well below the provincial limit. It is a non issue. Its like trying to tout economic benefits for the flames. They just don't exist. Neither does the risk you are trying to create. It adds nothing to the debate.

Care to provide financials to prove the city has all this unused capacity? I'm sure they also have a fantastic track record of exceeding these current figures you speak of as well that you can share? The city cannot and will not even do what you are suggesting in order to complete much more of the green line of the LRT into the north so it seems like you are grasping at straws.

Sorry, but I'm using concrete, tangible figures from other deals whether they suck or not. It has been routinely implied that this was the basis of the CSEC offer. We know the details of that offer and they are likely very similar to what Nenshi has referred to. They are not reasonable at all. So far all you're providing is what amounts to hearsay trying to wedge your unfounded argument into the discussion.

[Table 5]

Originally Posted by GGG

Can we please stop acting like the city owning the building is for the cities benefit. If you sign a 30 year operating agreement with the flames and give all revenue, maintenance and management of the arena to them. It is their building they just don't have to pay property taxes to the city or the province. Its a 10 million dollar per year benefit to the flames.

Never mind that at the end of that 30 years, the team will probably want a new building, and the City is left with a money pit. They will try to keep it viable for a little bit, but will eventually need to pay millions for it's demolishing. Not unlike what is happening to Northlands, and what will happen with the Saddledome.

That's some kind of ownership.

[longsuffering]

Originally Posted by GioforPM

I have heard it from various sources, on both of these threads.

So what's YOUR bottom line Gio?

[GioforPM]

Originally Posted by Cappy

Then why do people get worked up over a blue ring and some steel girders?

Why is art spending always under scrutiny?

Perhaps the principles matter. Perhaps the opportunity costs matter. Perhaps people feel that a private company should pay for it's infrastructure and charge the consumers for it's use.

Because some people hate art. Or think that what's been paid for isn't art. Not really because it affects them financially.

[rubecube]

Originally Posted by transplant99

I think the other major factor that will pressure the city long before any Flames move is the Olympic bid. Everyone and their dog already agrees that if they move ahead with the bid, they also have to build another arena. Thats not even up for debate. So again, if the city wants that, then they are best to make a deal sooner rather than later and risk losing a partner (who will pay more towards the rink than the city would) and having to build the whole thing on taxpayers money.

If the Olympics happen, they likely get a bunch of federal and provincial money and can build their own arena wherever they want. Getting the Olympic bid probably helps the new arena happen more than it hurts.

[GioforPM]

Originally Posted by longsuffering

So what's YOUR bottom line Gio?

I don't mind an actual non-repayable contribution from the city if, as Nenshi claims, the city does want a new arena as part of its plans. I don't mind 1/3, depending on the terms. The assumption for me is that it's paid for through a fairly minor tax increase. I don't buy a reduction in services because I don't think you need it, if there is a reasonable increase.

[Lanny_McDonald]

Originally Posted by Cappy

That's actually fair and, while i think it's too high, i wouldn't call you out on that.

But I beg to ask, the Flames have pretty much rejected this saying 66% (including 33% of ticket tax) was too much CSEC investment.

How do you reconcile your staunch support for the CSEC on this forum, with the fact that you essentially disagree with their "reasonable" offer?

That is a legit question too, i'm not trying to play "gotcha" or anything; it just seems we are having these passionate debates and personal attacks over proposals that the Flames would reject

Except that's not what was rejected. The Flames rejected a deal that had the city fronting the money, and then expecting it to all be paid back with some undisclosed mechanism. The city involvement was a loan, nothing more. For that, the city (well, Nenshi) gets everything he wants, the Stampede Board gets everything it wants, the Flames pay for 100% of a building, but nothing else they want. That is a fantastic deal for the city and the Stampede Board, but a brutal deal for the Flames. If the city wants the building in the middle of their poorly thought out entertainment district, they need to buck up some cash and make that their investment. The Flames are putting the building in the city's location, and forgoing all other possible investment opportunities they hoped to achieve with this project, and paying for it. That isn't a fair deal.

Maybe we should spin this another way. Would you be happy if the city fronted the whole nut, then the Flames paid some number ($15M) each year as a lessee, with the Flames getting all revenues from related to the events at the arena?

[GreenLantern2814]

Originally Posted by GioforPM

Because some people hate art. Or think that what's been paid for isn't art. Not really because it affects them financially.

The girders on 16th are growing on me. They look much better when they aren't surrounded by back hoes and construction. It's interesting, I get something new out of it every time I drive by.

The Peace Bridge is awesome, and everyone who has a problem with it probably has a terrible kitchen.

The Bloop is stupid.

[GioforPM]

Originally Posted by rubecube

If the Olympics happen, they likely get a bunch of federal and provincial money and can build their own arena wherever they want. Getting the Olympic bid probably helps the new arena happen more than it hurts.

I think they would have to commit to a new arena even beofre a bid is made.

[Makarov]

Originally Posted by New Era

Except that's not what was rejected. The Flames rejected a deal that had the city fronting the money, and then expecting it to all be paid back with some undisclosed mechanism. The city involvement was a loan, nothing more. For that, the city (well, Nenshi) gets everything he wants, the Stampede Board gets everything it wants, the Flames pay for 100% of a building, but nothing else they want. That is a fantastic deal for the city and the Stampede Board, but a brutal deal for the Flames. If the city wants the building in the middle of their poorly thought out entertainment district, they need to buck up some cash and make that their investment. The Flames are putting the building in the city's location, and forgoing all other possible investment opportunities they hoped to achieve with this project, and paying for it. That isn't a fair deal.

Maybe we should spin this another way. Would you be happy if the city fronted the whole nut, then the Flames paid some number ($15M) each year as a lessee, with the Flames getting all revenues from related to the events at the arena?

I don't think that this is accurate. In the ordinary course, a developer pays for the land, pays for the entire construction of the building, and then also pays the property tax. If the Flames did that, they could build it wherever they like, subject to zoning (which is an important consideration as the City also pays for all of the infrastructure required for such a specialized building).

[transplant99]

Originally Posted by rubecube

If the Olympics happen, they likely get a bunch of federal and provincial money and can build their own arena wherever they want. Getting the Olympic bid probably helps the new arena happen more than it hurts.

Great, except that arena will be needed to be planned and financing in place BEFORE any announcement of a winning bid.

Also, why would they want to build a new arena and not have an anchor tenant both before and after any Olympics?

[Lanny_McDonald]

Originally Posted by Makarov

I don't think that this is accurate. In the ordinary course, a developer pays for the land, pays for the entire construction of the building, and then also pays the property tax. If the Flames did that, they could build it wherever they like, subject to zoning (which is an important consideration as the City also pays for all of the infrastructure required for such a specialized building).

Yeah, the Flames could do that. But the city is playing hardball as they own all of the land suitable for the project in question (some of the best parking lots in Canada!), and forcing the Flames into adopting their site. The city already owns the land, hence my second suggestion. If the city wants to play these games, that is probably the best solution. The city pay the full nut, build the arena to their customer's needs, and be a landlord. But they don't want to do because the cost is too much. In that case, there needs to be a compromise on both sides here. I think the option discussed was the most fair to all parties concerned. Nenshi gets his gawd awful entertainment district, he entertainment district gets the anchor tenant it needs, and the Flames get a good deal on a building of their design.

[Cappy]

Originally Posted by GioforPM

Because some people hate art. Or think that what's been paid for isn't art. Not really because it affects them financially.

Some people don't care for the flames, or think that the city shouldnt pay for it. Not really because it affects them financially

[longsuffering]

Originally Posted by New Era

Except that's not what was rejected. The Flames rejected a deal that had the city fronting the money, and then expecting it to all be paid back with some undisclosed mechanism. The city involvement was a loan, nothing more. For that, the city (well, Nenshi) gets everything he wants, the Stampede Board gets everything it wants, the Flames pay for 100% of a building, but nothing else they want. That is a fantastic deal for the city and the Stampede Board, but a brutal deal for the Flames. If the city wants the building in the middle of their poorly thought out entertainment district, they need to buck up some cash and make that their investment. The Flames are putting the building in the city's location, and forgoing all other possible investment opportunities they hoped to achieve with this project, and paying for it. That isn't a fair deal.

Maybe we should spin this another way. Would you be happy if the city fronted the whole nut, then the Flames paid some number ($15M) each year as a lessee, with the Flames getting all revenues from related to the events at the arena?

This - the hyperbole - is where you lose people. In any case the Flames will get a state of the art building in what is more likely to be an excellent entertainment district developed by experts in the field.

What gives you so much confidence in the Flames to manage ANYTHING. They've mismanaged the arena project from the get go. Their forays in entertainment in the past - Flames Central - have failed and for most of the past 20+ years they've been unable to ice a team to challenge for the Stanley Cup. Recently, its an achievement to make the playoffs!

[Cappy]

Originally Posted by New Era

Except that's not what was rejected. The Flames rejected a deal that had the city fronting the money, and then expecting it to all be paid back with some undisclosed mechanism. The city involvement was a loan, nothing more. For that, the city (well, Nenshi) gets everything he wants, the Stampede Board gets everything it wants, the Flames pay for 100% of a building, but nothing else they want. That is a fantastic deal for the city and the Stampede Board, but a brutal deal for the Flames. If the city wants the building in the middle of their poorly thought out entertainment district, they need to buck up some cash and make that their investment. The Flames are putting the building in the city's location, and forgoing all other possible investment opportunities they hoped to achieve with this project, and paying for it. That isn't a fair deal.

Maybe we should spin this another way. Would you be happy if the city fronted the whole nut, then the Flames paid some number ($15M) each year as a lessee, with the Flames getting all revenues from related to the events at the arena?

Fair, but I thought I saw somewhere that the Flames flat out said they wouldnt be paying more than half for the stadium.

[Makarov]

Originally Posted by New Era

Yeah, the Flames could do that. But the city is playing hardball as they own all of the land suitable for the project in question (some of the best parking lots in Canada!), and forcing the Flames into adopting their site. The city already owns the land, hence my second suggestion. If the city wants to play these games, that is probably the best solution. The city pay the full nut, build the arena to their customer's needs, and be a landlord. But they don't want to do because the cost is too much. In that case, there needs to be a compromise on both sides here. I think the option discussed was the most fair to all parties concerned. Nenshi gets his gawd awful entertainment district, he entertainment district gets the anchor tenant it needs, and the Flames get a good deal on a building of their design.

That would work. However, if the Flames want to lease the premises full-time (so that they receive all revenue from other events etc), the lease would have to be high enough to recover the capital investment costs of the building over the term. Otherwise, what's the point for the City as developer?

Again, perhaps the City is prepared to subsidize the lease to a certain extent to reflect the public value of the facility. But then we are really just back to the same argument: what is that value to the City?

[Lanny_McDonald]

Originally Posted by longsuffering

This - the hyperbole - is where you lose people. In any case the Flames will get a state of the art building in what is more likely to be an excellent entertainment district developed by experts in the field.

It's not hyperbole. The plan Nenshi has outlined is a hot mess. Seriously, he has a business incubation facility in the middle of the "entertainment" district. He has historical ruins kitty corner from the arena. And then he has the CP mainline running right through the middle of it all! Who the hell dreamed this up? You need to go check out some of the other arenas and stadiums around the continent. There are some awesome entertainment districts around, and none of them have a business incubator or train tracks in the middle of them.

What gives you so much confidence in the Flames to manage ANYTHING. They've mismanaged the arena project from the get go. Their forays in entertainment in the past - Flames Central - have failed and for most of the past 20+ years they've been unable to ice a team to challenge for the Stanley Cup. Recently, its an achievement to make the playoffs!

Because the Flames job is entertainment, and the city of Calgary's job is governance. I'll give the reins to the interest running a team in the top hockey league on the planet and keep it out of the hands of government, thank you very much. Not that either has risen to the top of their respective areas of expertise of late, but I think they should focus on their core competencies and try and get better at each. Plus, I don't think you want to start listing off the failures of the city of Calgary. I don't think photon would appreciate the stress placed on the database.