Should Calgary Bid on the 2026 Olympics

[Senator Clay Davis]

Originally Posted by La Flames Fan

You have to spend money to make money as a business. I know for my two businesses we put up a lot of upfront costs to make profit down the road.

Absolutely awesome point, since it allows for a pivot back to the basically unanswerable question:

If spending money on the Olympics generated profit, why aren't more cities tripping over themselves to bid? And in fact, why is the opposite happening? Doesn't seem to jive with the "spend money to make money" argument, probably because the second portion of the argument is 99% unlikely to happen, and more and more people are thankfully realizing it. Until the IOC backs all cost overruns (LOL at that ever happening), it's a suckers bet, period.

[zhulander]

Originally Posted by La Flames Fan

Operating the Games costs money. Where does that come from? The air?

Operating the games costs $3.2 billion, it's very biased to say it costs $2 billion and claim 91% is funded privately.

[La Flames Fan]

Originally Posted by Senator Clay Davis

Absolutely awesome point, since it allows for a pivot back to the basically unanswerable question:

If spending money on the Olympics generated profit, why aren't more cities tripping over themselves to bid? And in fact, why is the opposite happening? Doesn't seem to jive with the "spend money to make money" argument, probably because the second portion of the argument is 99% unlikely to happen, and more and more people are thankfully realizing it. Until the IOC backs all cost overruns (LOL at that ever happening), it's a suckers bet, period.

It's a figure of speech, only to illuminate that you need funding before hand to generate revenue. Sorry if there was confusion, my point was not to touch on profitability (though I do believe we will be profitable).

But since you want to go down the why cities don't go for the Olympics argument...

Those free-for-all games aren't equal to what Calgary 2026 is proposing and the IOC agenda is moving away from those free-for-all events because those types of games aren't sustainable and are definitely a disaster economically.

Athens, Beijing, Sochi, Rio, Pyeongchang, London...those events are not even in the same stratosphere to what the Calgary 2026 proposal is, so I'm not sure why we're blanketing all games as equal.

Vancouver...this is the games that Calgary 2026 is comparable to. The advantage for Calgary and area is we have existing infrastructure from 1988 that can be renovated and upgraded to successfully host without the requirement for massive expenditures like those above. But we have something else, a deep-rooted legacy from '88 where this is still a hot bed for speed skating events, ski events, training, hockey, bobsled, luge...other places don't have that.

Calgary 2026 is not about a lavish party for politicians, it's continuing and building upon the legacy we already have and offering the community something to rally around while improving the spirit of a city that's been knocked-down, but not out.

This bid would be responsible, run by business leaders who understand the socio-economic impact.

[La Flames Fan]

Originally Posted by zhulander

Operating the games costs $3.2 billion, it's very biased to say it costs $2 billion and claim 91% is funded privately.

How is it biased?

[Senator Clay Davis]

Originally Posted by La Flames Fan

It's a figure of speech, only to illuminate that you need funding before hand to generate revenue. Sorry if there was confusion, my point was not to touch on profitability (though I do believe we will be profitable).

But since you want to go down the why cities don't go for the Olympics argument...

Those free-for-all games aren't equal to what Calgary 2026 is proposing and the IOC agenda is moving away from those free-for-all events because those types of games aren't sustainable and are definitely a disaster economically.

Athens, Beijing, Sochi, Rio, Pyeongchang, London...those events are not even in the same stratosphere to what the Calgary 2026 proposal is, so I'm not sure why we're blanketing all games as equal.

Vancouver...this is the games that Calgary 2026 is comparable to. The advantage for Calgary and area is we have existing infrastructure from 1988 that can be renovated and upgraded to successfully host without the requirement for massive expenditures like those above. But we have something else, a deep-rooted legacy from '88 where this is still a hot bed for speed skating events, ski events, training, hockey, bobsled, luge...other places don't have that.

Calgary 2026 is not about a lavish party for politicians, it's continuing and building upon the legacy we already have and offering the community something to rally around while improving the spirit of a city that's been knocked-down, but not out.

This bid would be responsible, run by business leaders who understand the socio-economic impact.

This....reads like something posted by someone with a direct connection to the bid. Care to disclose what, if any, connection you have? In the interest of transparency and all.

[zhulander]

Originally Posted by La Flames Fan

How is it biased?

Claiming 91% privately funded operations of the games of $3.2 billion is $2.9 billion. Leaving $0.3 billion for operations and $1.7 billion for capital. Total public spending of $2 billion.


Vancouver spent $3.3 billion on operations, I don't see how Calgary is going to do it for less.


pg10: http://cfss.sites.olt.ubc.ca/files/2...2013-10-23.pdf

[burn_this_city]

I'm leaning towards voting no in the plebiscite. I simply don't trust the city council in it's current form to manage this. It appears they are already cooking the books on this, and we haven't even been awarded the games. The hardball approach to the Flames was fine, but to blow a bigger wad on the Olympics is silly. This council has morphed into the same nonsense plaguing Vancouver, vanity projects and think about the children histrionics.

[powderjunkie]

Originally Posted by Senator Clay Davis

If spending money on the Olympics generated profit, why aren't more cities tripping over themselves to bid?

This is certainly one of the strongest anti-hosting points, but it could also be viewed as a potential strength in terms of lack of bidding competition, ergo leverage in designing the most appropriate bid for yourself (rather than the IOC's ridiculous requirements of the past).

For winter games, the pool of potential hosts is naturally limited by geography. Considering the current size of the winter games, a lot of the small-medium sized locations of the past are simply too small now (in an ideal world, I'm an advocate of a dual-host city set-up for two different Olympiads, which would bring these cities back into play - I've gone into more detail in the past about how a Calgary + Vancouver partnership would work). There are really only 8-10 places on each northern continent that make any sense these days.

On the flip side, we have seen lots of cities trip over themselves to spend huge public money on arenas and stadiums. Does the fact that others have done it, mean that we should, too? Every situation is different; just because it doesn't make sense for many other places doesn't mean it couldn't make some sense here.


I certainly acknowledge that the tangible cost/benefit sheet will never balance to the benefit side. It is only in the intangibles...the "je ne sais quoi" that pushes me barely onto the pro-host side. Can't quite find the right analogy, but it's like the guy who has brown-bagged and worked hard at the same factory for 30 years buying expensive floor seats that he can't really afford to see his favourite band play one last time, because, otherwise, what was the point of all of it?

In a perfect world, I think we'd wait to bid for 2030, and let the IOC demonstrate the necessary improvements with their vision 2020. The arena, fieldhouse, and stadium situations could be resolved on their own merits, and the political environment might be more stable.

[GGG]

Originally Posted by powderjunkie

I certainly acknowledge that the tangible cost/benefit sheet will never balance to the benefit side. It is only in the intangibles...the "je ne sais quoi" that pushes me barely onto the pro-host side. Can't quite find the right analogy, but it's like the guy who has brown-bagged and worked hard at the same factory for 30 years buying expensive floor seats that he can't really afford to see his favourite band play one last time, because, otherwise, what was the point of all of it?

To me this is the best argument for the Olympic games. Its an emotional one but its honest.

Trying to dress of the Olympics as some kind of infrastructure play, even with the Bidco's own numbers just doesn't make the math work. Its a loser. But the emotional argument that their is an intangible benefit to the Olympics that makes throwing money after it worth it is a very strong argument.

Going to the Olympics in Vancouver was awesome, and it takes a lot of work from the rational side of the brain to reject it. I'm still a soft no but its arguments that the two week party is worth it that are compelling as opposed to failed economic ones.

[Bunk]

Originally Posted by burn_this_city

I'm leaning towards voting no in the plebiscite. I simply don't trust the city council in it's current form to manage this. It appears they are already cooking the books on this, and we haven't even been awarded the games. The hardball approach to the Flames was fine, but to blow a bigger wad on the Olympics is silly. This council has morphed into the same nonsense plaguing Vancouver, vanity projects and think about the children histrionics.

It's not, nor will it be council really managing the vast majority of how a bid or games is run. It will be the bid corporation, the the games corporation. Council's only really been the steward of the early exploration. What the City is really good at doing is building capital projects on time and on budget, so that's good news as it relates to necessary infrastructure.

[Travis Munroe]

Is Olympic housing not a profitable venture by selling it to the public after the fact? I am sure Vancouver would be (not sure what it is being used as now) and Calgary could be if done properly. The 88 games Olympic housing became private residential condos after the fact and I have to assume the sell of cost was greater than the build cost..

[DiracSpike]

Originally Posted by burn_this_city

I'm leaning towards voting no in the plebiscite. I simply don't trust the city council in it's current form to manage this. It appears they are already cooking the books on this, and we haven't even been awarded the games. The hardball approach to the Flames was fine, but to blow a bigger wad on the Olympics is silly. This council has morphed into the same nonsense plaguing Vancouver, vanity projects and think about the children histrionics.

This. I seriously don't get this. I don't understand how council (and some posters) can balk at the amount the Flames were asking for buildings that will last 40 years but then turn around and be gungho to spend multiple times that amount for a two week event. They seem like completely incompatible view points.

[Bunk]

Originally Posted by DiracSpike

This. I seriously don't get this. I don't understand how council (and some posters) can balk at the amount the Flames were asking for buildings that will last 40 years but then turn around and be gungho to spend multiple times that amount for a two week event. They seem like completely incompatible view points.

A counterpoint to that would be that in the games - the City is projected to spend about $550m, and that includes various capital projects like the Field House, housing that will have a lasting impact over 40yrs. That’s compared to a $5.2b overall spend. So it is paying $1 and getting $9 spent from either IOC, Feds, Province or via event revenue. Pretty good ROI, arguably.

If the City was to spend $50m and have someone else spend $450m (the same ratio) on an arena, the deal would be done already. That said, of course the city should contribute a share, the issue is how much of a proportion is fair and reasonable? I also do think if both sides move a bit (the City said explicitly it WAS NOT their “final offer”), there is of course a deal to be made, and I think they will. I really do.

[DiracSpike]

Originally Posted by Bunk

A counterpoint to that would be that in the games - the City is projected to spend about $550m, and that includes various capital projects like the Field House, housing that will have a lasting impact over 40yrs. That’s compared to a $5.2b overall spend. So it is paying $1 and getting $9 spent from either IOC, Feds, Province or via event revenue. Pretty good ROI, arguably.

If the City was to spend $50m and have someone else spend $450m (the same ratio) on an arena, the deal would be done already. That said, of course the city should contribute a share, the issue is how much of a proportion is fair and reasonable? I also do think if both sides move a bit (the City said explicitly it WAS NOT their “final offer”), there is of course a deal to be made, and I think they will. I really do.

My problem with 5.2B though is a lot of it is spent on externalities like security and operating costs, it doesn't really leave us with anything permanent. I'm a bit dubious on the capital efficiency of the Olympics, it doesn't seem like it compares with just investing the money in infrastructure straight up, even with Ottawa and Edmonton chipping in.

[Bunk]

Originally Posted by DiracSpike

My problem with 5.2B though is a lot of it is spent on externalities like security and operating costs, it doesn't really leave us with anything permanent. I'm a bit dubious on the capital efficiency of the Olympics, it doesn't seem like it compares with just investing the money in infrastructure straight up, even with Ottawa and Edmonton chipping in.

A perfectly fair critique - those sunk costs are definitely not nothing.

[powderjunkie]

Originally Posted by DiracSpike

My problem with 5.2B though is a lot of it is spent on externalities like security and operating costs, it doesn't really leave us with anything permanent. I'm a bit dubious on the capital efficiency of the Olympics, it doesn't seem like it compares with just investing the money in infrastructure straight up, even with Ottawa and Edmonton chipping in.

That ignores operating income though. When you boil it down, the operations will be within a couple hundred million of break-even either way (a million ways to contextualize it to appear either very profitable or a big loser - the truth is somewhere in between.

What we're left with is:
- more than ideal capital spending that isn't necessarily targeted to the highest civil priorities, however, this is offset by achieving otherwise unrealized funding from other levels of gov't
- the less measurable economic and cultural benefits - again, these can be contextualized to be major or minor...the truth being somewhere in between
- one hell of a party


I might be the king of bad analogies, but let's take another shot: you're at the point in your life where you've saved up a little money for downpayment, and you decide the prudent thing for you to do is to stop living with roommates and buy a nice one bedroom condo downtown. Let's say you've can easily manage a $60k downpayment on a $300k condo for $1500/mth mortgage/condo fees without much risk or change to your lifestyle (very imaginary numbers). The place is smaller than where you live now and doesn't have storage lockers, which will make it difficult for you to manage your skiing and camping equipment.

However...your grandma is wealthy, getting pretty old, and doesn't want to leave her house. A very nice house a few doors down is up for sale - say $600k. She calls you and says she'll give you $100k for a downpayment, plus $500/mth if you'll shovel her walks, mow her lawn, drive her to the occasional appt. and have dinner with her every Sunday. The house is further from your workplace, but still a desirable location. You can make the money work, but it means cutting back on eating out and taking cheaper vacations for a while. The backyard will be perfect for bonfires with friends. There is a hot tub in the backyard that you don't really want to pay to heat/maintain, but it could be fun ...You'll definitely be more stretched financially this way, though, and at more risk.

Both the house and condo have upsides and downsides...and you're not getting exactly what you want either way, but such is life.

If you go the safe 1 bdrm route, you wonder if you'll ever be able to afford a place like the nice one. You're paying more than you want for stuff you don't specifically need at the bigger house, but you feel good about taking care of your grandma (say accessibility improvements related to para-games...) even though you don't always love hearing her racist rants (IOC corruption? Also...let's say she made all of her wealth on cigarette stocks or something).

Neither choice is right or wrong - you know that the ideal thing would be to buy a nice 3 bdrm townhouse located halfway between the two places and still do everything to help your grandma, but she doesn't trust you to visit enough and the money is only available for the big house...


edit: let's add that the big house was recently renovated, but it's kind of tacky, and has some design flaws that you don't mind, but you know make it not an ideal investment...

[Northendzone]

Here is a curveball - what happens if the city moves ahead with the games, and then in 2022 there is a terroist attack at the games - the security costs would increase massively, but then it is too late to back out.

Also, it seems like everyone has a lot of faith in the numbers being bandied about - every government project always has cost over runs or they underestimate - I am not sure which.

And lastly, renovate McMahon stadium - that seems like a massive waste of money. What happens when the $135 million estimate really turns into $210 million. The riders built a new house for what $300 million?

[Ozy_Flame]

Originally Posted by Northendzone

Here is a curveball - what happens if the city moves ahead with the games, and then in 2022 there is a terroist attack at the games - the security costs would increase massively, but then it is too late to back out.

Also, it seems like everyone has a lot of faith in the numbers being bandied about - every government project always has cost over runs or they underestimate - I am not sure which.

And lastly, renovate McMahon stadium - that seems like a massive waste of money. What happens when the $135 million estimate really turns into $210 million. The riders built a new house for what $300 million?

The Riders built a new stadium for $278 million, and as far as I know, it came in on budget.

It's sort of a weird argument to make, since you are saying cost overruns are a major problem, but you also insinuating that everyone should just pony up another $150 million (double) and build something similar to Regina?

[GGG]

Originally Posted by powderjunkie

That ignores operating income though. When you boil it down, the operations will be within a couple hundred million of break-even either way (a million ways to contextualize it to appear either very profitable or a big loser - the truth is somewhere in between.

What we're left with is:
- more than ideal capital spending that isn't necessarily targeted to the highest civil priorities, however, this is offset by achieving otherwise unrealized funding from other levels of gov't
- the less measurable economic and cultural benefits - again, these can be contextualized to be major or minor...the truth being somewhere in between
- one hell of a party

.

I’m not touching that analogy (though I will say our Grandma isn’t rich) but the above is only correct ignore you somehow assume that security is not part of the operating costs of the games

The games leave us per the report with 1.7 billion spent on things we will still have after the games. Subtracting that from 3 billion in funding you get an operating loss of 1.3 billion for hosting the games. It’s not a few hundred million either way.

The operations will lose over a billion dollars it’s disingenuous to say otherwise

[Northendzone]

Originally Posted by Ozy_Flame

The Riders built a new stadium for $278 million, and as far as I know, it came in on budget.

It's sort of a weird argument to make, since you are saying cost overruns are a major problem, but you also insinuating that everyone should just pony up another $150 million (double) and build something similar to Regina?

I suppose, but, to me it makes no sense to spend that much to renovate an old building.

What I would rather the city ultimately do is strike a deal with the flames ownership group and just build a new stadium and arena and forget about this vanity project.