Arena negotiation discussion. UPD: Flames release their proposal

[Table 5]

Originally Posted by DJones

It's simply not economical to fund an arena privately in Calgary the vast majority of NHL cities.

Made a small ammendment. The entire NHL way of doing business is broken. You can't spend 70 million on players if you can't afford a place to operate out of without sucking fans and municipalities dry.

[pylon]

The way this is going, it seems to me as is the Flames actually want to sour public opinion so they can make a move easier. Murray Edwards is a business man. And a smart one. Perhaps he's determined that just as he has on a personal level, Calgary just isn't the place to be anymore on a business level, and he wants out of the market for a myriad of reasons, and Ken King is just his mouthpiece.

The only other possible conclusion I can draw from this is the Flames feel the city is going to take a viable run at the Olympics, which would require the city build a new arena, and this is a stall tactic to see where that washes out. If Calgary threw an official winter bid into the mix, I think there is a very strong possibility it's approved, and voila, free arena 2.0. So completely remove yourself from the table now and refuse to negotiate like a big baby, until that decision is made.

Either way, I'm very soured towards the Flames right now. The optics of 'refusing to negotiate' to me say they likely are looking for a reason to pull up the stakes.

[DJones]

Originally Posted by GGG

Here is where I disagree with you. The flames first offer likely has a break even NPV using a 15% discount rate. There is likely room to adjust the expected profits downward towards a 10% rate or lower if the city starts to absorb risks. Bingos number he ran are interesting and I am interested to see where it comes out if you assume that the project as proposed would be break even at 15% NPV then how much the Flames could contribute if the break even was only at 10% NPV.

You also never present your opening offer as your final offer.

I can't imagine they planned a walkout on their opening offer.

And did Bingo not take into account interest expenses? Had that question when I read it but it was more of a skim.

[Flame On]

Originally Posted by kermitology

If you call a ticket tax an opportunity cost to the Flames in that the Flames are not able to price their tickets higher and maximize revenues, then the city land contribution has to be considered an opportunity cost as well. That land could be sold to someone.

Typically CRL would be used to fund infrastructure upgrades in the CRL area, would it not? Not to subsidize an anchor tenant.

Totally agreed about the logical look at both these factors. Although I think about 90% of posters railed against the fact that the ticket tax counted against the Flames.
However, in this case it doesn't necessarily translate as the City themselves have named the development area they would like. In it they include a stadium. So its hard to claim "we've lost opportunity" when they are getting the exact opportunity they are looking for.
Finally don't know about the CRL infrastructure argument, but in the same vein it is bold for people to whine about the City having to pay for the demolition of any elements in the development zone as a pure contribution to the Flames and not the development as a whole.

[rvd123]

Originally Posted by Reneeee

Without a pro sports team our city will be undesirable to many money making vetures.

Pull your head out of the sand. lmao.

[troutman]

Originally Posted by Reneeee

This really does have the potential to ruin this city for years to come, ask Winnipeg. People moved, businesses moved, and only now are people returning due to the return of the Jets.

Winnipeg had positive population growth in every census going back to 1976.

https://en.wikipedia.org/wiki/Demographics_of_Winnipeg

[DJones]

Originally Posted by Table 5

Made a small ammendment. The entire NHL way of doing business is broken. You can't spend 70 million on players if you can't afford a place to operate out of without sucking fans and municipalities dry.

I would like to see ~5% of revenue put aside before the 50/50 split but what do I know.

Some city official somewhere will want to make a name for themselves and will fork over the money. I have very little faith that we can keep the Flames without caving.

[GGG]

Originally Posted by DJones

I can't imagine they planned a walkout on their opening offer.

And did Bingo not take into account interest expenses? Had that question when I read it but it was more of a skim.

His assumption was the flames offer he used was break even at a 10% NPV and that you wouldn't execute a project for less than 10% NPV. So he essentially assumed (because we don't have a good grasp of what Flames external revenues are) that the owners came to the table with a barely economic solution. So I think running the numbers on each offer with different assumptions for revenue and NPV hurdles will give us an interesting range of outcomes of where the Flames maximum contribution would lie.

[Reneeee]

Originally Posted by rvd123

Pull your head out of the sand. lmao.

I'm listening.... Convince me otherwise.

If I ever looked to relocate my family, top of the list would be whether or not they had a pro sports club

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[GioforPM]

Originally Posted by GGG

^^^^^^^^^^^
Studies do not show any negative outcomes from teams moving.

Also per Nenshi this offer was rejected by everyone. Which means it might have been the only vote everyone agreed on all year

I assume you mean negative financial outcomes.

[Table 5]

Originally Posted by DJones

I would like to see ~5% of revenue put aside before the 50/50 split but what do I know.

They need to do something like that, but probably an even bigger percentage. If an average arena is about 600 million to build, and has the lifespan of 35 years, then each team needs to pocket away about 17 million a year (very rough as I'm not accounting for inflation, any investment on that money, or ongoing operation/taxes).

[Weitz]

Originally Posted by Reneeee

I'm listening.... Convince me otherwise.

If I ever looked to relocate my family, top of the list would be whether or not they had a pro sports club

Sent from my Nexus 5 using Tapatalk

Your poor family.

[GGG]

Originally Posted by Reneeee

I'm listening.... Convince me otherwise.

If I ever looked to relocate my family, top of the list would be whether or not they had a pro sports club

Sent from my Nexus 5 using Tapatalk

Really??

Top of my list is an employment opportunity that I find challenging
Then that the economics of cost of living vs Salary work out
Then that the schooling / opportunities for children make sense
Then that my wife has good employment opportunities
Then the overall culture of the city
Then the weather and things to do.

And I suppose things to do would include having an sports team but could be offset without one. I mean once the Padres leave San Diego I'd still move there. And if pro sports is so important why don't you live in a Big4/5 city.

[Table 5]

I moved back to Calgary a 6-7 years ago, and the Flames had nothing to do with it. Quality of life, family proximity, economic opportunities, cost of education and health care, stable political climate...those were the things we considered.

Yes, it's a very nice perk to have an NHL team, but not a deal breaker....I actually kind of enjoyed being an out-of-town Flames fan as the games felt more special when I did see them. Most of the other cities I was considering at the time (Seattle, Portland, SF) didn't have NHL teams either.

[Passe La Puck]

Originally Posted by New Era

One thing that is missing from this presentation that fans should like, is no ticket tax. The money is recovered from a CRL rather than a ticket tax. For all the people that were concerned about being priced out of their seats because of a ticket levy, that is not there.

The argument that ticket tax is Flames contribution is based entirely on the theory that the price of tickets has a fixed ceiling and the tax eats into that ceiling. But when the tax isn't there fans are somehow benefiting from lower ticket cost?

[Racki]

Originally Posted by pylon

The only other possible conclusion I can draw from this is the Flames feel the city is going to take a viable run at the Olympics, which would require the city build a new arena, and this is a stall tactic to see where that washes out. If Calgary threw an official winter bid into the mix, I think there is a very strong possibility it's approved, and voila, free arena 2.0. So completely remove yourself from the table now and refuse to negotiate like a big baby, until that decision is made.

This has been my opinion for quite a while. Nenshi and the Flames both know that a successful Olympic bid would enable them to garner something that the Oilers absolutely could not secure - Federal and Provincial funding.

[Reneeee]

Originally Posted by Weitz

Your poor family.

That's uncalled for bud. Grow up

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[Parallex]

Originally Posted by Reneeee

If I ever looked to relocate my family, top of the list would be whether or not they had a pro sports club

I really hope you're exagerating or joking... if not your spouse should leave you ASAP. You're prioritizing a sports club over employment, quality of life, violent crime propensity, educational opportunities... who does that?

[CaramonLS]

Originally Posted by GGG

I mean once the Padres leave San Diego I'd still move there. And if pro sports is so important why don't you live in a Big4/5 city.

I don't know if NYC will ever recover if they lose the Islanders.

[nik-]

Originally Posted by Reneeee

That's uncalled for bud. Grow up

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Well to be fair, your priority assignment on whether it's a good idea to relocate your family does seem terrible.