[News Roundup] CSEC/City arena deal UPDATED: Third Party Facilitator

[bizaro86]

Originally Posted by timun

I am a mechanical engineer who does this for a living. (And no, I'm not working on this project, but I used to work with the guys who are designing it.)

No, hooking into the district heating system is not more expensive than the building having its own boiler plant. All that happens is that the high-pressure, high-temperature water from the district plant is fed to one or two heat exchangers, stepping down to a lower pressure and temperature. The rest of the pumping and piping of heating water through the building is no different.

It depends on the economic requirements of hooking up to the district heating system. If a third party is paying for that, then they're effectively buying your boiler so obviously cheaper. But if you have to pay a capital contribution it could be more expensive. And if hooking up is a condition of building the building you won't have much leverage on negotiating that fee.

Seems like the city added a bunch of ancillary stuff through the planning process here to me.

[The Cobra]

Originally Posted by PeteMoss

I too am on team billionaire. I mean one day I too could be a billionaire and able to buy homes all over the world so I can claim residency wherever benefits me most. Sure it might mean my country is missing out on a bunch of tax dollars, but one day it could be me.

Buying a home in a particular country does not equate to residency. You actually have to live there the majority of the time. His country would be where he lives.


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[Barnet Flame]

Originally Posted by The Cobra

Buying a home in a particular country does not equate to residency. You actually have to live there the majority of the time. His country would be where he lives.


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True. The one drawback to being a billionaire is how meticulously you need to adhere to the rules.

I imagine.

[jaydub74]

Originally Posted by Barnet Flame

Even that wasn’t enough. He’s ####ed off out of the UK as well. He’s like Sid Sneer on acid.

I don't think the issue is tax minimization, it's the combination of events. Edwards turns his back on Canada to minimize taxes, the country that enabled him to make his fortune while asking the same country and city to subsidize his oil and gas companies and pay for a portion of his hockey rink. I completely understand his position from a tax and business standpoint, take everything you can get but from an ethical standpoint, it stinks.

[jaydub74]

Originally Posted by The Cobra

Buying a home in a particular country does not equate to residency. You actually have to live there the majority of the time. His country would be where he lives.


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Buying a home in most countries does not usually give you residency status beyond your ability to live there for the duration of your tourist visa. Residency, except in the case of Gold Visa or Investment Visas (in some countries) requires that you are employed in a sector that requires your specific skill/education. In addition, your residency stipulates you must spend a predetermined number of days per year in said country. That said as a billionaire, there may be some alternate routes as I'm sure many countries would welcome his tax revenue.

[Boreal]

Originally Posted by The Cobra

I am not sure I would criticize anyone would wants to minimize his taxes.


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Yeah anyone.

Murray Edwards is just a middle class guy trying to make ends meet.

[topfiverecords]

Originally Posted by jaydub74

Buying a home in most countries does not usually give you residency status beyond your ability to live there for the duration of your tourist visa. Residency, except in the case of Gold Visa or Investment Visas (in some countries) requires that you are employed in a sector that requires your specific skill/education, although I would suggest as a billionaire there may be some alternate routes.

In many countries, as a millionaire/billionaire you can buy permanent residency and in some even citizenship.

[PeteMoss]

Originally Posted by topfiverecords

In many countries, as a millionaire/billionaire you can buy permanent residency and in some even citizenship.

Switzerland is one of those countries. https://www.linkedin.com/pulse/super...sa-enzo-caputo

[jaydub74]

Originally Posted by topfiverecords

In many countries, as a millionaire/billionaire you can buy permanent residency and in some even citizenship.

That’s correct, I believe that’s referred to as a Golden Visa.


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[The Cobra]

Originally Posted by topfiverecords

In many countries, as a millionaire/billionaire you can buy permanent residency and in some even citizenship.

Just because he can buy permanent residency in one country does not mean he couldn’t qualify as a resident in another country for tax purposes.

I imagine that he can buy his way into staying in Switzerland, but he likely has to live there to make sure he doesn’t pay taxes in another country.


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[edslunch]

The guy is free to do what he wants. If he truly wants to live in London or Switzerland, good for him. If he's doing it in part to save money then he's a skinflint.

[timun]

Originally Posted by bizaro86

It depends on the economic requirements of hooking up to the district heating system. If a third party is paying for that, then they're effectively buying your boiler so obviously cheaper. But if you have to pay a capital contribution it could be more expensive. And if hooking up is a condition of building the building you won't have much leverage on negotiating that fee.

I don't know exactly what you're envisioning with the "capital contribution" you're speaking of, but I can tell you that the customers bear the capital costs of tying into the distribution system and the building of the "energy transfer station"—what Enmax/CDHI (Calgary District Heating Inc.) call the heat exchanger(s) at the customer's building. There is no other upfront payment (that I know of) to tie into the system in the first place.

The Thermal Energy Service Agreements (TESAs) have two charges on them:

1) a fixed charge for the cost of operating the distribution system, i.e. the pipes out in the street that distribute the heating water from the central plant. This is akin to the T&D charges on your electricity bill, and delivery charges on your gas bill. This is how CDHI recoups the capital and operational costs of the plant and distribution system.

2) a variable charge for the thermal energy

The TESAs are typically a minimum 20-year agreement, and rates are negotiated on a customer-by-customer basis (district energy isn't a regulated public utility, so there is no "regulated rate option" like gas & electricity).

The upfront costs of tying into the district system are: the cost of trenching into the street and tying into the heating water pipe mains, pipes between the main lines in the street to the building, an "energy transfer station" room to house the heat exchanger(s), the heat exchanger(s), and relatively simple controls to make the system work. Building your own boiler plant requires: the cost of trenching into the street and tying into the gas main, the gas piping from the street through the building to wherever your boiler plant room is, the boiler plant room itself (which is much bigger than the energy transfer station), the boilers, boiler circulation pumps, (more complicated) boiler controls, flue vents, a condensate acid neutralization system on the flues (presuming you're using condensing boilers somewhere near the thermal efficiency of the ones at the district heating plant), and combustion air intakes.

The O&M costs for the district heating connection are almost negligible, the heat exchangers are a passive device that just need periodic cleaning/descaling. The boiler plant requires far, far more.

I'm not privy to all of the TESA rates previously negotiated with the 20 or so customers of the district energy system, but on the projects I have worked on that tied into it it was a no-brainer to go with district heat.

[taxbuster]

Originally Posted by The Cobra

I am not sure I would criticize anyone would wants to minimize his taxes.

Given that I'm in the tax business, I feel quite comfortable doing so - especially when the object of such criticism is depending on TAXPAYER dollars for his grandiose plans.

I dislike freeloaders.

There is absolutely NOTHING to prevent Edwards from building his own arena and kingdom around it. Others have done so and thrived; if he's smart enough, so can he.

[dustygoon]

Originally Posted by jaydub74

I don't think the issue is tax minimization, it's the combination of events. Edwards turns his back on Canada to minimize taxes, the country that enabled him to make his fortune while asking the same country and city to subsidize his oil and gas companies and pay for a portion of his hockey rink. I completely understand his position from a tax and business standpoint, take everything you can get but from an ethical standpoint, it stinks.

Damn capitalist. Put his money at risk for investments. Some folks got some jobs. Some banks lent money and got repaid. And he paid taxes and his companies continue to pay taxes unless he is subject to some evasion charges I don’t know about? But was all “enabled” by Canada. No where else enables like Canada does! Socialists…so many of them are actually jealous and inept capitalists but would do it too in a heartbeat if they knew how to.

If it was so easy, fire away and follow in his foot steps. Why unethical?

[FlamesAddiction]

Originally Posted by taxbuster

Given that I'm in the tax business, I feel quite comfortable doing so - especially when the object of such criticism is depending on TAXPAYER dollars for his grandiose plans.

I dislike freeloaders.

There is absolutely NOTHING to prevent Edwards from building his own arena and kingdom around it. Others have done so and thrived; if he's smart enough, so can he.

Yeah, he has no issue spending taxpayer money, but god forbid he has to pay them in Canada

[Strange Brew]

Originally Posted by taxbuster

Given that I'm in the tax business, I feel quite comfortable doing so - especially when the object of such criticism is depending on TAXPAYER dollars for his grandiose plans.

I dislike freeloaders.

There is absolutely NOTHING to prevent Edwards from building his own arena and kingdom around it. Others have done so and thrived; if he's smart enough, so can he.

This is the crux of the matter.

I could not care less where Edwards lives or how much he pays in taxes. It's all about the game of pro sports ownership. If the city of Calgary wants to take the lead in standing up to pro sports ownership, let's just be adults and brace ourselves for possible consequences. Do we really believe someone will be willing to finance an arena in Calgary on their own nickel? I don't.

[PeteMoss]

Originally Posted by dustygoon

Damn capitalist. Put his money at risk for investments. Some folks got some jobs. Some banks lent money and got repaid. And he paid taxes and his companies continue to pay taxes unless he is subject to some evasion charges I don’t know about? But was all “enabled” by Canada. No where else enables like Canada does! Socialists…so many of them are actually jealous and inept capitalists but would do it too in a heartbeat if they knew how to.

If it was so easy, fire away and follow in his foot steps. Why unethical?

The damn capitalist is the one asking for government handouts, not the socialists youve developed in your strawman argument.

[Mr.Coffee]

Furthermore and not discussed but I wonder if all the oil and gas companies CNRL has crushed due to the absolutely ruthless / borderline unethical way they run their business has put more people out of work than he’s hired and “supported” (lol).

Same for many other companies like Tourmaline. All these acquisitions and so many out of work with no hiring on the horizon. Anyone who has interacted on the business end of his companies knows what I’m talking about and it isn’t pretty. CNRL purposefully drives people out of business and people out of work for the exclusive benefit of CNRL shareholders to come in and buy up for pennies on the dollar. Now this is all “fair” (eye raising……) and “just business” (sure……..with real world consequences but okay), and there’s not much most competition can do about it. It’s fine but for the juxtaposition of the avoidance of tax. This is resource extraction via leases to harvest oil and gas and profit from mainly Crown (province) held resources that then the main beneficiary flies out of country to avoid tax and then asks the population he’s screwing to pay for his luxury palace. Great guy, real classy. His actions and companies are like the antithesis of what the Flames purport to stand for.

Then to say “well you go do it then” is stupidity of the highest order. Sure why don’t you just start a bank? You can’t because he’s created a monster company that evades and minimizes liability to the nth degree or sues people into oblivion with high priced law firms or just generally does whatever the #### he wants. Coles notes: they’ve gotten too big. But yeah, capitalism or something. Capitalism, right up until you want to make $100MM in franchise value for doing really not much, paying for the freight that you are demanding must be paid so you can enable more revenue streams to profit even more off of.

So stupid when you think about it.

[bizaro86]

Originally Posted by timun

I don't know exactly what you're envisioning with the "capital contribution" you're speaking of, but I can tell you that the customers bear the capital costs of tying into the distribution system and the building of the "energy transfer station"—what Enmax/CDHI (Calgary District Heating Inc.) call the heat exchanger(s) at the customer's building. There is no other upfront payment (that I know of) to tie into the system in the first place.

The Thermal Energy Service Agreements (TESAs) have two charges on them:

1) a fixed charge for the cost of operating the distribution system, i.e. the pipes out in the street that distribute the heating water from the central plant. This is akin to the T&D charges on your electricity bill, and delivery charges on your gas bill. This is how CDHI recoups the capital and operational costs of the plant and distribution system.

2) a variable charge for the thermal energy

The TESAs are typically a minimum 20-year agreement, and rates are negotiated on a customer-by-customer basis (district energy isn't a regulated public utility, so there is no "regulated rate option" like gas & electricity).

The upfront costs of tying into the district system are: the cost of trenching into the street and tying into the heating water pipe mains, pipes between the main lines in the street to the building, an "energy transfer station" room to house the heat exchanger(s), the heat exchanger(s), and relatively simple controls to make the system work. Building your own boiler plant requires: the cost of trenching into the street and tying into the gas main, the gas piping from the street through the building to wherever your boiler plant room is, the boiler plant room itself (which is much bigger than the energy transfer station), the boilers, boiler circulation pumps, (more complicated) boiler controls, flue vents, a condensate acid neutralization system on the flues (presuming you're using condensing boilers somewhere near the thermal efficiency of the ones at the district heating plant), and combustion air intakes.

The O&M costs for the district heating connection are almost negligible, the heat exchangers are a passive device that just need periodic cleaning/descaling. The boiler plant requires far, far more.

I'm not privy to all of the TESA rates previously negotiated with the 20 or so customers of the district energy system, but on the projects I have worked on that tied into it it was a no-brainer to go with district heat.

Sure, I agree with all of that (also mechanical engineer). My point was more that the capital cost of building the district facility is getting recovered somehow. In some projects I've seen upfront fees paid to connect, while sometimes that capital is built into the utility rates. I'm not specifically familiar with this plant. There's no free lunch, although district wide should be more efficient.

[timun]

Okay then you're obviously just barely glossing over what I wrote, because I just explained that there is no upfront fee, and:

1) I am "specifically familiar with this plant", because
2) I have actually designed a building that ties into this plant, and
3) I am telling you, unequivocally, that it's less expensive than building your own boiler plant.