Arena negotiation discussion. UPD: Flames release their proposal

[CorbeauNoir]

Originally Posted by Senator Clay Davis

It's worth remembering there are (at least) three teams who are deeply underwater financially right now, with virtually no reason, short of the league rigging a dynasty for them, to think they won't continue to be financial black holes. Even playing in the Dome, those owners would break even or even make money, as opposed to their current situations of bleeding cash. So even if Murray could pull off a sale, there are owners who would gladly leave their failing markets for this one, especially if the only cost is the relocation fee. Taking out being propped up by government subsidies, the Coyotes have almost certainly lost at least $250 million in the last decade. Why wouldn't Barroway pay that as a relocation fee to, you know, actually have a shot at making some money?

So even if this goes all the way, what happens when Barroway or Viola tell Gary "Well we're in POS, hopeless markets, and there's an open market that, even in an old building, we will do far better financially, so yeah if you're letting them go either let us take their place, or compensate us bigly". It also would probably be, relatively speaking, cheap as #### to buy one of those teams and move them here, so a local buyer can scoop them up for a bargain price, even factoring in the relocation fee. The layers of complexity to this thing if it does go all the way is part of why it's unlikely to go all the way. Bettman is hoping we fall for the fear mongering, because if we don't he may play himself really badly, and turn a bad situation for the Flames into a catastrophic situation for the league as a whole.

A) none of those usual-suspect teams are located in cities that are bleeding corporate support the way Calgary is.

B) CSEC isn't going to sell the team in the immediate future. They're waiting for that profit margin to get razor-thin and squeeze out every last drop they can before they do so. By that point what potential owner is going to want to buy into a financially-depressed market with a dwindling white-collar attendance base AND pay their own way for an arena on top of it? Where exactly is the "bargain" there? Especially when several years down the road multiple other western-conference options could present themselves as an alternative. Houston popped up as a potential NHL market literally overnight after years of everybody swearing up and down that it never would - so what's to stop the same thing happening in Portland, or Kansas City, or San Diego, or SLC, or any number of other possibilities over the next decade or so?

[Parallex]

Originally Posted by powderjunkie

Why haven't the Flames been planning for this for the last...20+years?

The problem with the logic behind this question is that it assumes that they haven't been planning for this for the last 20ish years and that the situation we find ourselves in now isn't the product of that plan (rather then the product of the lack of a plan). I mean... is it really far-fetched to think that the plan the entire time was always just "get someone else to pay for it".

Originally Posted by CorbeauNoir

By that point what potential owner is going to want to buy into a financially-depressed market with a dwindling white-collar attendance base

If that's the case then don't you think it's even more imperative that the city not blow it's money on subsidies for a private luxury entertainment company. A financially-depressed market can't be wasting those kinds of tax dollars on such frivolous things.

[monkeyman]

Isn’t there a better chance Winnipeg will move again before Calgary? Calgary has a larger building, generates more revenue, has a larger population, and much larger corporate base.
With all other things being relatively equal, tax rate, exchange rate...
Calgary spends a lot more and is less competitive, so maybe they should consider changing their operating philosophy before whining about thier hardship in the current economic environment.

[RM14]

I hope they put in a new scoreboard in the meantime.

[CorbeauNoir]

Originally Posted by Parallex

If that's the case then don't you think it's even more imperative that the city not blow it's money on subsidies for a private luxury entertainment company. A financially-depressed market can't be wasting those kinds of tax dollars on such frivolous things.

Yes.

Originally Posted by monkeyman

Isn’t there a better chance Winnipeg will move again before Calgary? Calgary has a larger building, generates more revenue, has a larger population, and much larger corporate base.
With all other things being relatively equal, tax rate, exchange rate...
Calgary spends a lot more and is less competitive, so maybe they should consider changing their operating philosophy before whining about thier hardship in the current economic environment.

Winnipeg isn't unilaterally reliant on an industry this country is evidently hellbent on committing economic suicide over. I also think the Jets are overachieving the way Ottawa recently had and are going to cool off significantly in the near future but that's another topic.

[GioforPM]

Originally Posted by Strange Brew

I think you need to explain why this money should go to private enterprise vs. Public services. Unless you believe taxpayers are so flush with with cash and the City of Calgary provides more public services than anyone could expect.

The argument that it’s not much money is just an awful one.

It's not an awful one, if we are talking about the amount of the City contribution. If you aren't willing to have the City contribute anything, that's fine (though pretty impractical) but then I don't see what point there is in negotiating anything further. I also assume you are up in arms about every other subsidy/consideration/tax break/etc. for other private businesses that the City gives. Did you, for example, complain about the 2017 business property tax cap? The Calgary Film Centre?

[powderjunkie]

Originally Posted by Parallex

The problem with the logic behind this question is that it assumes that they haven't been planning for this for the last 20ish years and that the situation we find ourselves in now isn't the product of that plan (rather then the product of the lack of a plan). I mean... is it really far-fetched to think that the plan the entire time was always just "get someone else to pay for it".

The scariest thing is that you may well be correct...20 years of considering this, waiting, thinking, waiting, planning, waiting, figuring out just the right way to do this, planting seeds to build foundation for a deal...and the end result has been what we've seen over the last few years??????

Utterly inept. I don't think CSEC is evil...I understand they are acting in their own interest, just as I would. But I'd hope I could do a better job or strategizing and building necessary relationships! I'm thinking Hanlon's razor may be the most appropriate explanation.

"Never attribute to malice that which is adequately explained by stupidity."

I am increasingly convinced that management and ownership are simply a smouldering tire-fire, both on and off the ice. It just doesn't seem so evident when we have a full landfill-fire burning out of control for the last 2 decades a couple hours to our north.

That isn't to say I think ownership are bad people - they are wonderful philanthropists, and we could do a lot worse for ownership (see Edmonton, Ottawa, NY Knicks, Indy Colts, etc.). Shrewd businessmen? Not so sure...smart oilmen at the right time, right place, with the right capital in the right industry? Sure, but that has not translated into running an above average franchise.


I probably exaggerate a little bit, but I think there is plenty of truth in there, and it's a big part of why I feel uncomfortable subsidizing...incompetence (for lack of a better word).

[GioforPM]

Originally Posted by powderjunkie

The scariest thing is that you may well be correct...20 years of considering this, waiting, thinking, waiting, planning, waiting, figuring out just the right way to do this, planting seeds to build foundation for a deal...and the end result has been what we've seen over the last few years??????

Utterly inept. I don't think CSEC is evil...I understand they are acting in their own interest, just as I would. But I'd hope I could do a better job or strategizing and building necessary relationships! I'm thinking Hanlon's razor may be the most appropriate explanation.

"Never attribute to malice that which is adequately explained by stupidity."

I am increasingly convinced that management and ownership are simply a smouldering tire-fire, both on and off the ice. It just doesn't seem so evident when we have a full landfill-fire burning out of control for the last 2 decades a couple hours to our north.

That isn't to say I think ownership are bad people - they are wonderful philanthropists, and we could do a lot worse for ownership (see Edmonton, Ottawa, NY Knicks, Indy Colts, etc.). Shrewd businessmen? Not so sure...smart oilmen at the right time, right place, with the right capital in the right industry? Sure, but that has not translated into running an above average franchise.


I probably exaggerate a little bit, but I think there is plenty of truth in there, and it's a big part of why I feel uncomfortable subsidizing...incompetence (for lack of a better word).

I've been in the room with Edwards on a non-oil industry deal. He's shrewd. Mind you, that was at least 12 years ago.

[Pellanor]

This weekend I had an opportunity to chat with somebody who knows quite a few of the people involved on both sides of the negotiations. Here's the impression I got through our conversation.
- It was pretty much a done deal last summer. If it was anybody but Ken King AND Nenshi negotiating, it would be done.
- The owners feel insulted, but will likely be back at the table within a year.
- The owners make a lot of contributions to the city that aren't really talked about. If you take all of it into account, the team is effectively subsidizing the city with the proposed deal.
- As we all agree, the team has done a terrible job with their presentations / pr on the whole issue.
- The city has also responded poorly. Calgary Next had a lot of potential but was shot down without much debate.

I'm not sure how accurate all of this is, but it was interesting to get his perspective.

[temple5]

Originally Posted by GioforPM

It's not an awful one, if we are talking about the amount of the City contribution. If you aren't willing to have the City contribute anything, that's fine (though pretty impractical) but then I don't see what point there is in negotiating anything further. I also assume you are up in arms about every other subsidy/consideration/tax break/etc. for other private businesses that the City gives. Did you, for example, complain about the 2017 business property tax cap? The Calgary Film Centre?

I am sure the City would be more than willing to give the Flames a property tax break for 25 years if the Flames built their own building. Sacrificing the future to pay for the present is part of todays Western political dna.

The Flames and all popular sports teams know they play at the heart strings. In Canada the problem is they cant vote on a specific tax to pay for their buildings like in the US where they can threaten to move and play at the heart strings of the average fan. In Canada they have to hope they can dupe some low IQ politicians and get them to pay for the arena (QC, Edm, Wpg) or they have to build it themselves like in Montreal, Ott, Van, Toronto.

If the Flames arent willing to at least consider that the Citys final proposal (with this mayor and council) and Calgary doesnt get the Olympics then the dream of a new stadium and likely the Flames long term viability in this City is probably zero. Now a new mayor (like Mandel ilk was up the QE2) and council could change the game significantly. It all depends how long the Flames are willing to wait if they dont want to wait 10 yrs then the Team is probably gone. Can they wait 15 years and hope the economy picks up where the West Village is then a possibility?

I seem to remember someone posting that the Flames owners group had bought a lot of land in Sunalta attempting to profit of the area re-development. Maybe that is the long game for the Flames and any notion of an area anywhere else is just posturing. I am sure they would take a free arena but put in a dime of their own money when they cant make anything else off the side....

Below is a link to the true value of stadiums post construction (seems like they hold their value about as good as cars).

http://www.cbc.ca/news/canada/montre...entre-1.666114

[GioforPM]

Originally Posted by temple5

I am sure the City would be more than willing to give the Flames a property tax break for 25 years if the Flames built their own building. Sacrificing the future to pay for the present is part of todays Western political dna.

The Flames and all popular sports teams know they play at the heart strings. In Canada the problem is they cant vote on a specific tax to pay for their buildings like in the US where they can threaten to move and play at the heart strings of the average fan. In Canada they have to hope they can dupe some low IQ politicians and get them to pay for the arena (QC, Edm, Wpg) or they have to build it themselves like in Montreal, Ott, Van, Toronto.

If the Flames arent willing to at least consider that the Citys final proposal (with this mayor and council) and Calgary doesnt get the Olympics then the dream of a new stadium and likely the Flames long term viability in this City is probably zero. Now a new mayor (like Mandel ilk was up the QE2) and council could change the game significantly. It all depends how long the Flames are willing to wait if they dont want to wait 10 yrs then the Team is probably gone. Can they wait 15 years and hope the economy picks up where the West Village is then a possibility?

I seem to remember someone posting that the Flames owners group had bought a lot of land in Sunalta attempting to profit of the area re-development. Maybe that is the long game for the Flames and any notion of an area anywhere else is just posturing. I am sure they would take a free arena but put in a dime of their own money when they cant make anything else off the side....

Below is a link to the true value of stadiums post construction (seems like they hold their value about as good as cars).

http://www.cbc.ca/news/canada/montre...entre-1.666114

NO! No money for private companies.

[You Need a Thneed]

Originally Posted by Pellanor

This weekend I had an opportunity to chat with somebody who knows quite a few of the people involved on both sides of the negotiations. Here's the impression I got through our conversation.
- It was pretty much a done deal last summer. If it was anybody but Ken King AND Nenshi negotiating, it would be done.
- The owners feel insulted, but will likely be back at the table within a year.
- The owners make a lot of contributions to the city that aren't really talked about. If you take all of it into account, the team is effectively subsidizing the city with the proposed deal.
- As we all agree, the team has done a terrible job with their presentations / pr on the whole issue.
- The city has also responded poorly. Calgary Next had a lot of potential but was shot down without much debate.

I'm not sure how accurate all of this is, but it was interesting to get his perspective.

Except Nenshi was never negotiating.
There's no chance that the "owners are subsidizing the city". This is not an Arguement, because it's not possible.
-again, CalgaryNEXT was dead the day it was proposed. It's literally impossible to make work with anything remotely close to the proposed financial setup. It did not have potential, it was a disaster, and Ken King (and whoever else was in charge of that proposal) should have been fired that same day.

[Locke]

Originally Posted by You Need a Thneed

Except Nenshi was never negotiating.
There's no chance that the "owners are subsidizing the city". This is not an Arguement, because it's not possible.
-again, CalgaryNEXT was dead the day it was proposed. It's literally impossible to make work with anything remotely close to the proposed financial setup. It did not have potential, it was a disaster, and Ken King (and whoever else was in charge of that proposal) should have been fired that same day.

And this is the thing.

CalgaryNEXT was a great proposal, a revolutionary idea. Then they got to the photos...

But as soon as the 'Financial' slide came up the whole thing ground to a dead halt.

It was just so outlandish....it was like something a grade schooler would slap together for a project. Not even remotely grounded in reality.

And on top of it all, the people expected to approve and pay for the Lion's share of this wonderful fantasyland were just as surprised about it as everyone else.

[stone hands]

Originally Posted by Pellanor

This weekend I had an opportunity to chat with somebody who knows quite a few of the people involved on both sides of the negotiations. Here's the impression I got through our conversation.
- It was pretty much a done deal last summer. If it was anybody but Ken King AND Nenshi negotiating, it would be done.
- The owners feel insulted, but will likely be back at the table within a year.
- The owners make a lot of contributions to the city that aren't really talked about. If you take all of it into account, the team is effectively subsidizing the city with the proposed deal.
- As we all agree, the team has done a terrible job with their presentations / pr on the whole issue.
- The city has also responded poorly. Calgary Next had a lot of potential but was shot down without much debate.

I'm not sure how accurate all of this is, but it was interesting to get his perspective.

Can you please explain #3 to me with more detail?

[Looch City]

Originally Posted by Pellanor

This weekend I had an opportunity to chat with somebody who knows quite a few of the people involved on both sides of the negotiations. Here's the impression I got through our conversation.
- It was pretty much a done deal last summer. If it was anybody but Ken King AND Nenshi negotiating, it would be done.
- The owners feel insulted, but will likely be back at the table within a year.
- The owners make a lot of contributions to the city that aren't really talked about. If you take all of it into account, the team is effectively subsidizing the city with the proposed deal.
- As we all agree, the team has done a terrible job with their presentations / pr on the whole issue.
- The city has also responded poorly. Calgary Next had a lot of potential but was shot down without much debate.

I'm not sure how accurate all of this is, but it was interesting to get his perspective.

Haha that last point makes me laugh. Sure it was a good idea, but that's basically it. It deserves to be shot down 10 out of 10 times.

God I still can't believe they spent a damn decade on it and what we got is a grade-school presentation.

[Freeway]

Originally Posted by Pellanor

This weekend I had an opportunity to chat with somebody who knows quite a few of the people involved on both sides of the negotiations. Here's the impression I got through our conversation.
- It was pretty much a done deal last summer. If it was anybody but Ken King AND Nenshi negotiating, it would be done.
- The owners feel insulted, but will likely be back at the table within a year.
- The owners make a lot of contributions to the city that aren't really talked about. If you take all of it into account, the team is effectively subsidizing the city with the proposed deal.
- As we all agree, the team has done a terrible job with their presentations / pr on the whole issue.
- The city has also responded poorly. Calgary Next had a lot of potential but was shot down without much debate.

I'm not sure how accurate all of this is, but it was interesting to get his perspective.

For what it's worth, that's fairly close to what I was told this summer as well.

[guzzy]

Originally Posted by stone hands

Can you please explain #3 to me with more detail?

Doc Seaman Calgary Foundation - $117MM contribution to the community. second largest donation in Canadian history
Mccaig tower - foothills hospital
N.Murray Edwards Charitable Foundation - also built NICU at Alberta Childrens hospital.

Some pretty big contributions right there.

[Parallex]

Originally Posted by Freeway

For what it's worth, that's fairly close to what I was told this summer as well.

Well... now I'm curious. Under what terms was it "pretty much a done deal"? Talkin' dollars...

[Erick Estrada]

Originally Posted by GioforPM

Your property taxes go up pretty marginally according to the numbers I read here once. Like $5.

Hmmm. World class arena so we don't have to travel 3 hours north to see major entertainment acts and NHL franchise in your city long term or more bus shelters.

[Manhattanboy]

Originally Posted by guzzy

Doc Seaman Calgary Foundation - $117MM contribution to the community. second largest donation in Canadian history
Mccaig tower - foothills hospital
N.Murray Edwards Charitable Foundation - also built NICU at Alberta Childrens hospital.

Some pretty big contributions right there.

Libin Cardiovascular Institute at Foothills Hospital.