Arena negotiation discussion. UPD: Flames release their proposal

[Roughneck]

Originally Posted by sureLoss

May have already been posted, but city's response to the Flames releasing their proposal



source: https://www.scribd.com/document/3595...ring-proposals

Important to note that the 'Indirect Costs' of the City in their proposal of $150M is what the current CRL is funding for the Rivers District.

[monkeyman]

Originally Posted by Tyler

City releases their rebuttal:

https://www.scribd.com/document/3595...ring-proposals

And it didn't take them a week to do it.

[GGG]

Originally Posted by tkflames

Distance apart = $40M city contribution + $55M city land and saddle dome demolition +$60M less flames condition + $7Mx35 years= $400M

Great work by the city on this info graphic! The flames would have been better off issuing a bar graph showing comparative bars showing how much more they are offering than the oilers. Any other argument is just making them look worse.

The only way I see this deal happening with these parties is if they both move $200M. City would need to contribute 95M and come down to $3M/year of taxes for 35 years and flames/fans need to come up with an extra $200M.

I don't see either of these happening so either a 3rd party or a creative idea like a "ticketmaster replacement revenue stream" will likely be required.

The Flames offer is worse than the Oilers deal presuming ticket taxes and rents are owner contributions and ignoring the massive subsidy of rent/tax free and running the entertainment business

Flames offer
280 million city
275 million Flames

Oilers
226 million city
258 million Oilers

Plus they promised to invest 100 million. The Oilers deal is a bad deal but the flames offer is worse.

[tkflames]

Originally Posted by GGG

The Flames offer is worse than the Oilers deal presuming ticket taxes and rents are owner contributions and ignoring the massive subsidy of rent/tax free and running the entertainment business

Flames offer
280 million city
275 million Flames

Oilers
226 million city
258 million Oilers

Plus they promised to invest 100 million. The Oilers deal is a bad deal but the flames offer is worse.

A bar graph showing Flames up front investment Is 100M vs 30M and a second bar graph showing Flames offer $275M, Oilers $258M would have made them look better then this piece of crap they submitted. Partial info seems to be their thing. Your point is well noted.

[Parallex]

Originally Posted by ComixZone

Nenshi kicked off his campaign by showing a brand new arena in his vision for the East Village. An arena that he has no way of funding, and has made no progress in acquiring funding for. If he has someone else lined up to fund the arena, then cool...otherwise don’t you think he would have wanted to clarify some things with the Flames , the organization he had been in negotiations with, before publicly proposing it?

Do you're saying it's kind of like the Flames showing off CalgaryNext publically before consulting the city.

[Parallex]

Originally Posted by sureLoss

May have already been posted, but city's response to the Flames releasing their proposal



source: https://www.scribd.com/document/3595...ring-proposals

Also I'm told these are Ken King's new and improved renderings...

[calgaryblood]

Originally Posted by sureLoss

May have already been posted, but city's response to the Flames releasing their proposal



source: https://www.scribd.com/document/3595...ring-proposals

Stop, Stop! He's already dead!

[d_phaneuf]

Originally Posted by Classic_Sniper

Nice work. Honestly, with these kinds of numbers, it's almost a blip on the radar. For me, I'm fine with whatever outcome at this point, it's just not a number that I'm going to get myself worked up for. Ken King and co, would have an easier time convincing people if he just said it'll cost everyone $5 a household per year. The optics certainly sound better than the hundreds of millions I keep hearing about.

It doesn't sound like that but it's millions and millions of dollars that could be used for ______ fill in the blank from anything to healthcare, educational, transit etc.

Why should a handout to billionaires be more important than so many other things

I think that's the argument cities and provinces are now making, and the public is rising up more against these type of deals whereas in the past they got rubber stamped

Something creative is needed like the last Vegas Hotel tax rising to help fund the Raiders stadium, or someone posted about how the falcons built their new stadium with something similar. That's what is going to be needed

[monkeyman]

Jordan Kanygin‏Verified account @CTVJKanygin 1h hour ago
More
Some interesting info from the province re: the Community Revitalization Levy. (I know... Fun!) But relevant given #Flames' arena proposal:

Jordan Kanygin‏Verified account @CTVJKanygin 1h hour ago
More
Replying to @CTVJKanygin
The CRL program is under review until '18 & province isn't accepting funding requests 'until program review is complete,' says spokesperson.

Jordan Kanygin‏Verified account @CTVJKanygin 1h hour ago
More
Replying to @CTVJKanygin
A Victoria Park arena would fall in the Rivers District, an existing CRL zone that runs out in 2027. Can the CRL deadline be extended? A:

Jordan Kanygin‏Verified account @CTVJKanygin 1h hour ago
More
Replying to @CTVJKanygin
Extending CRL beyond 20yrs needs legislative change & "would have a significant impact on education tax payers across Alberta" -spokesperson

Jordan Kanygin‏Verified account @CTVJKanygin 1h hour ago
More
Replying to @CTVJKanygin
So, even if the City accepted the #Flames' arena proposal, the CRL funding (and program) may not even exist. #yyc /thread

[Coach]

Originally Posted by ComixZone

Nenshi kicked off his campaign by showing a brand new arena in his vision for the East Village. An arena that he has no way of funding, and has made no progress in acquiring funding for. If he has someone else lined up to fund the arena, then cool...otherwise don’t you think he would have wanted to clarify some things with the Flames , the organization he had been in negotiations with, before publicly proposing it?

Did he? I thought I remember seeing a video about East Village revitalization that included transportation upgrades, arts centres, urban housing developments and commercial real estate for large retailers as well as local start ups followed by a brief mention of the possibility of having an events center at it's heart with partnership from the Flames.

That response article (not just the infographic) illustrates an important point: These are the long-term plans of a city of 1.5 million people. years and even decades in the works. The Flames have had plenty of opportunity to be a part of those plans for a lot of years. A sports team can't just come in and drop a bomb of a proposal that has nothing to do with what the city plans for neighborhood revitalization and expect the city to pay anything for it.

East Village is happening with or without the Flames. There is opportunity for the Flames to insert a revenue generating events center with 1/3 being paid by the city in a place where the city plans to spur development, again with or without the Flames. The specific financials of which i'm sure are still up for negotiation to a point. Or there is a free market in which the Flames are welcome to participate whereby they can buy land wherever they want in whatever city they want and build whatever building they want and call the team whatever they want etc...

That's the way the system works. A smug millionaire throwing a public fit while speaking for billionaires that want a city to pony up 1/2 of a building while reaping zero benefits outside of "you get hockey!" and the game-day population influx to a development area is much more unseemly than a smug mayor flipping the bird to the former while presenting a very reasonable offer and in all honesty what is likely a better business opportunity (due to the fact that the city has decades worth of funds going to develop this area which is of benefit to the Flames having a building in that area just as much as it is a benefit for the city to the Flames in that area). In my opinion.

[Flames_Gimp]

Originally Posted by Table 5

I'll be honest, as a fan I'm ok with that. I don't mind the Saddledome experience as-is, as the actual on ice hockey product is still pretty solid, and I'm not really eager to spend 40% more on tickets just for some added fluff, more expensive food, and slightly better bathroom lines (although not if they keep referencing Edmonton).

i wouldn't mind a bathroom I can use..

[Matt Reeeeead]

A couple of thoughts:

The flames ownership group shouldn't be expecting premium, market rate returns on this investment. When you buy a sports team this should be understood. The ownership group should be prepared to accept less than the 10 percent rates analyzed in this thread. If they want more, they should be investing in more lucrative markets. This is the price you pay to own a coveted, personal interest asset.

The city should be prepared to incorporate some of the indirect benefits into their model that were not included in the initial offer. There are real benefits there, just not to the point the flames are proposing.

If both sides can accept those reasonable points, there should be legit room to move towards some middle ground.


Sent from my iPhone using Tapatalk

[Cecil Terwilliger]

The city forgot to put a big red X through the Flames proposal. Fail.

[Frequitude]

Assuming $555M came from a $500M arena + $30M land + $25M Saddledome Demo, I feel like a fair middle ground is:

$166M CRL fronted by City
$166M ticket tax fronted by City
$166M cash from Flames
$30M City land donation
$25M City paid Saddledome demolition
$XXX City paid infrastructure
Flames pay either property tax or rent

Basically the Flames contribute 2/3 of the value of the building (under my arguement that a ticket tax is a Flames contribution) while the City contributes 2/3 of the upfront building cost, the land, the Dome demo and the infrastructure. Then the Flames just pay rent or property taxes like everyone else.

[Cali Panthers Fan]

So again, judging by the city's rebuttal, the Flames' math is off. There's a chunk that is simply unaccounted for, and in the Q & A section the City indicates that the CRL doesn't cover nearly as much as the Flames believe because part of it is already spoken for.

So I will just wait for the Flames to hire an accountant. Locke, care to help them out?

[Ducay]

Originally Posted by Matt Reeeeead

A couple of thoughts:

The flames ownership group shouldn't be expecting premium, market rate returns on this investment. When you buy a sports team this should be understood. The ownership group should be prepared to accept less than the 10 percent rates analyzed in this thread. If they want more, they should be investing in more lucrative markets. This is the price you pay to own a coveted, personal interest asset.

The city should be prepared to incorporate some of the indirect benefits into their model that were not included in the initial offer. There are real benefits there, just not to the point the flames are proposing.

If both sides can accept those reasonable points, there should be legit room to move towards some middle ground.

I hate jumping to their defense, but sorry, why should owners be required or prepared to accept a lower return? This is an investment, they can demand whatever return they so choose. Doesn't mean they'll get it or that they need to give anything up if they don't want to either. Being a "coveted" asset doesn't mean jack beyond they have a captive market and ability to tug at emotional side of things.

Also, city seems to be pushing hard as showing the user fees as a separate source of funding; I'd say thats one point ownership is correct on.

[Jay Random]

Originally Posted by CampbellsTransgressions

Oh my god conservatives are some of the most overwhelmingly stupid people, especially when they want to go into further debt so that we can finance an arena.

Thanks for calling me overwhelmingly stupid (though in fact I don't want to take on public debt to pay for an arena). I'll give you a wee hint: that may not have been an overwhelmingly smart thing for you to say. Nevertheless, I'll reply to your other points.

The Flames aren't going to move because they will lose money hand over fist wherever else they go.

If they remain in their present building much longer, they'll lose money hand over fist anyway.

Without a big whack of public subsidy in the form of fancy arenas, and another big whack of private subsidy in the form of cable subscription fees handed out to sports channels that most people don't watch, the entire current structure of major-league professional sports in North America is not sustainable.

So I'll grant you this: the team may not move. It may just fold instead, once the fundamental economics of the business catch up with it.

If that isn't obvious based on the performance of 2/3rds of the teams in the league then I don't know what is.

Try 5/6 of the teams. According to Forbes' 2016 figures (which are about as good as anything we have to go on), the NHL as a whole had operating income of $440 million. Three teams accounted for half of that income: the Leafs, Habs, and Rangers. Bingo's estimates (which appear to be in the right ballpark based on the data available to me) would make out that a team needs something in the neighbourhood of $30 million a year in operating income to support the cost of a new, privately-funded arena. Only five NHL franchises earned that much – the big three plus Chicago and Boston.

The plain fact of the matter is that a new arena does not make sense as an investment in a city the size of Calgary, and if the public does not feel like the intangible value is enough to justify kicking in the difference, there is no deal to be made. That's the position we appear to be in now.

[Lanny_McDonald]

Originally Posted by longsuffering

Actually you said a bit more than that. You said the City capping their investment at 1/3 of the building cost was a fair deal for all.

Just because I said one deal was fair does not mean that I can't think other deals are fair as well. Believe it or not, the whole world doesn't ascribe to a single perspective or idea on what is fair. Some people can hold a very nuanced view where give and take on each side can provide a fair deal.

Now you suggest the Flames limiting their contribution to nothing but a prepayment of rent for 35 years with the City picking all other direct or indirect costs is a fair deal.

Rent to the tune of $275M dollars! Be accurate. There was nothing in the deal about the city picking up anything more than the $225 million, and it was meant to be all encompassing.

Applying the Flames funding logic to the Flames proposal, the City is providing 100% of funding the building because the Flames only pay rent. Yet, despite not providing any real capital, the Flames ownership receive 100% of the revenue and profits derived from the building.

Is that really your position? Really? An you accuse me of trolling? The Flames presentation suggested they were fronting $275M in cash.

So what's the deal? Obviously you're not prepared to stand on your own principal. The Flames ask is double what you earlier said was a fair deal!

Is this about your ego and your poll having to be right or something? Because I can't believe anyone would really give a rip about someone else thinking that there are more than one way to skin a cat. Why do you care that I think both proposals have merit and could be the foundation for a deal? Is this more about you being right than the a deal being formulated that can work for all parties? Sure seems that way based on your attacks on me.

I can't help but think you're trolling this forum in a sense, playing some kind of weird devils advocate role because you enjoy the argument and the attention.

Either that or we just need to understand that you don't necessarily believe in what you're posting. What does that say?

Says I can see the value of multiple positions and don't have to create a singular position and then brow beat people into agreeing with it. You might want to look into that. There are many ways to any solution, not just a single one.

[Matt Reeeeead]

Originally Posted by Ducay

I hate jumping to their defense, but sorry, why should owners be required or prepared to accept a lower return? This is an investment, they can demand whatever return they so choose. Doesn't mean they'll get it or that they need to give anything up if they don't want to either. Being a "coveted" asset doesn't mean anything.

Also, city seems to be pushing hard as showing the user fees as a separate source of funding; I'd say thats one point ownership is correct on.

Because the entire industry makes a lower return on investment than other more profitable ones. It's the fact of most types of entertainment industries. They are reliant on consumer disposable income.... not providing need based service. Any sports team owner signs up for this when they invest, and choose to bypass better returns available elsewhere. Sports teams are limited and a higher demand from potential owners than they should based purely on profit due to the "fun and prestige" of owning these things.

No different than how they treat employee salary. Do you think they pay their employees market rates like an oil and gas company or other typically successful industry would? Presumably no, they would pay based on the profits available which would be lower than another industry.

My point being... if you want 10 percent returns without taking on a pile of risk, then perhaps don't choose an industry reliant on public subsidy to make it happen. The flames should be aiming for modest returns available within the scope of the industry.


Sent from my iPhone using Tapatalk

[topfiverecords]

Originally Posted by Parallex

Also I'm told these are Ken King's new and improved renderings...

Let me know when you have my commission cheque ready.