[News] Calgary, Alberta, & CSEC agree in principle to $1.223bn Event Centre + infrastructure

[Demzy84]

Originally Posted by CroFlames

What I simply CAN'T wrap my head around is the massive cost. 1.2 billion for an ARENA. Not even a stadium. Earlier in this thread I posted about Juventus stadium in Turin built in 2011 for $310 million in today's CAD. It’s state of the art, with all the bells and whistles, 42,000 seats and a roof. How is our new arena (likely 18,000 seats) going to cost four-####ing-times as much?! I'm not even arguing the split of public vs private money here, but the sheer overall cost is staggering and I don't understand it. Italy is a G7 country too, and Northern Italy is very affluent and developed, not unlike us.

I mean, the arena itself is not costing $1.2B. That is the total cost of the entire project. The Arena is about $874M but that also includes the on site public realm, which I assume is the parking, indoor and outdoor gathering areas etc…

[Jason14h]

Why do you keep asking the same question about the Juventus stadium and pretending the arena costs 1.2 billion

Maybe we need to get a footy team and build them a stadium

[Kickazzflames]

Originally Posted by CroFlames

Billionaires have been exploiting municipalities for stadiums and arenas for a long time. Our billionaire wasn't going to be the first one to be pious and righteous and build a rink of his own money (that he earned from OUR oil, but I digress). So I've accepted the fact that public money will go towards this project. If done right, the public can recoup their investment.

What I simply CAN'T wrap my head around is the massive cost. 1.2 billion for an ARENA. Not even a stadium. Earlier in this thread I posted about Juventus stadium in Turin built in 2011 for $310 million in today's CAD. It's state of the art, with all the bells and whistles, 42,000 seats and a roof. How is our new arena (likely 18,000 seats) going to cost four-####ing-times as much?! I'm not even arguing the split of public vs private money here, but the sheer overall cost is staggering and I don't understand it. Italy is a G7 country too, and Northern Italy is very affluent and developed, not unlike us.

Hell, the new Totteham Hotspur stadium in ####ing LONDON with a capacity of 63,000 and a roof cost a billion pound, but that included the demolition of their old stadium, and development of surrounding area. Is Calgary really more expensive than London?

The posts about "stop your bitching" seem crazy to me if we can burn a cool billion and not ask questions.

*~830 Mil for the Arena.. But still crazy expensive. This will likely end up being $1.15 Billion considering overruns.

Edmonton Arena was estimated at $450 mil in 2014 and ended up at $614 mil in 2016.

I understand inflation, lack of man power and high material costs raised the estimates quite a bit but starting out at $830 mil for arena seems high, even if its nearly a decade later than Edmonton's.

[Nufy]

People were fighting about the over priced Finger trap bridge a few years back due to the unique architecture.

[getbak]

Originally Posted by CroFlames

Hell, the new Totteham Hotspur stadium in ####ing LONDON with a capacity of 63,000 and a roof cost a billion pound, but that included the demolition of their old stadium, and development of surrounding area. Is Calgary really more expensive than London?

What's the exchange rate? It looks like today a billion Pounds is $1.7 billion Canadian.

Also, it looks like the Tottenham stadium was built between 2015 and 2019, so inflation also needs to be considered.

This deal also includes demolition of the old building and development of the surrounding area.

[Yeah_Baby]

Originally Posted by Nufy

People were fighting about the over priced Finger trap bridge a few years back due to the unique architecture.

Heh, don't have to pay to use the bridge though.

[Jason14h]

If we’re already spending this much I actually prefer getting a best in class arena /facility/ etc Vs cheaping out

But I also like the peace bridge and think having cool things as a city is great

[Demzy84]

Originally Posted by Fire

How many people can't afford Hitmen tickets? It's not just the Flames using it. A lot of affordable options.

THIS!!!! I just got an entire set of playoff tickets for the Wranglers for $680, first bowl, row 6. So new arena maybe those are $800 or so, but still quite affordable.

Our son has also enjoyed going to the Roughnecks games with his friends, and we all went and watched Bedard play the Hitmen.

Will ticket prices go up for those teams, probably…but still extremely affordable

[CroFlames]

Originally Posted by Jason14h

Why do you keep asking the same question about the Juventus stadium and pretending the arena costs 1.2 billion

Maybe we need to get a footy team and build them a stadium

It has nothing to do with the sport being played inside the venue. Both the Juventus stadium and Tottenham stadium included developments around the venue, just like the Calgary project. The Calgary project is just insanely expensive compared to those (and other arena/stadium) projects.

[Demzy84]

Originally Posted by Jason14h

Why do you keep asking the same question about the Juventus stadium and pretending the arena costs 1.2 billion

Maybe we need to get a footy team and build them a stadium

But if we get a football team, we got to build a $310M stadium…..which at least will be cheaper than the $1.2B arena, right?? /s

[SuperMatt18]

Originally Posted by Kickazzflames

*~830 Mil for the Arena.. But still crazy expensive. This will likely end up being $1.15 Billion considering overruns.

Edmonton Arena was estimated at $450 mil in 2014 and ended up at $614 mil in 2016.

I understand inflation, lack of man power and high material costs raised the estimates quite a bit but starting out at $830 mil for arena seems high, even if its nearly a decade later than Edmonton's.

Inflation from 2016 to 2023 is 22.7% so that is $772M.

So it's pretty close just based on inflation.

The real failure here IMO was not getting a deal done back in that 2010-2015 time frame when it was already clear that we needed a new rink, but the Canadian $$ was in a much better place.

CSEC and the City really kept kicking the can down the road here and the conditions are just getting worse to build the rink.

[Slava]

Originally Posted by getbak

What's the exchange rate? It looks like today a billion Pounds is $1.7 billion Canadian.

Also, it looks like the Tottenham stadium was built between 2015 and 2019, so inflation also needs to be considered.

This deal also includes demolition of the old building and development of the surrounding area.

Well I was there before and after that new stadium, and in all honesty, it's magnificent. It's been an enormous change for the area and has definitely allowed them to host a lot of high profile events that they couldn't have hosted before.

Probably a good time to note that this was all privately paid for as well, and ENIC (the equivalent of CSEC) reaps the direct rewards.

[FlamesAddiction]

Originally Posted by CroFlames

Billionaires have been exploiting municipalities for stadiums and arenas for a long time. Our billionaire wasn't going to be the first one to be pious and righteous and build a rink of his own money (that he earned from OUR oil, but I digress). So I've accepted the fact that public money will go towards this project. If done right, the public can recoup their investment.

What I simply CAN'T wrap my head around is the massive cost. 1.2 billion for an ARENA. Not even a stadium. Earlier in this thread I posted about Juventus stadium in Turin built in 2011 for $310 million in today's CAD. It's state of the art, with all the bells and whistles, 42,000 seats and a roof. How is our new arena (likely 18,000 seats) going to cost four-####ing-times as much?! I'm not even arguing the split of public vs private money here, but the sheer overall cost is staggering and I don't understand it. Italy is a G7 country too, and Northern Italy is very affluent and developed, not unlike us.

Hell, the new Totteham Hotspur stadium in ####ing LONDON with a capacity of 63,000 and a roof cost a billion pound, but that included the demolition of their old stadium, and development of surrounding area. Is Calgary really more expensive than London?

The posts about "stop your bitching" seem crazy to me if we can burn a cool billion and not ask questions.

Technically, they are proposing to build a new entertainment district. If it was just an arena, it would be a lot less. They are kind of using a new arena to justify larger commercial and infrastructure improvements. It kind of makes sense if you are building a downtown arena. Arenas alone take up a large foot print and have a lot of dead space if the areas around them aren't developed.

Whether or not the long term economic gains justify the current costs, I have no idea. I can see why people are apprehensive, but part of me also thinks that sometime it is nice to have nice things. To use an analogy, driving a Hyundai might be cheaper and still get you to the same places as a Cadillac, but if you are spending a lot of time in car and still spending a lot of money anyway, riding in comfort has it's upside.

[Jason14h]

Originally Posted by CroFlames

It has nothing to do with the sport being played inside the venue. Both the Juventus stadium and Tottenham stadium included developments around the venue, just like the Calgary project. The Calgary project is just insanely expensive compared to those (and other arena/stadium) projects.

Of course the sport being played matters in the stadium design

I assume you’ve been to NHL and Soccer games before . Clearly you can see the stadiums are different

Ensuring we aren’t “overpaying” is fine / must be done . But I will assume these groups arent embezzling the funds and the cost is the cost

[SuperMatt18]

Originally Posted by CroFlames

It has nothing to do with the sport being played inside the venue. Both the Juventus stadium and Tottenham stadium included developments around the venue, just like the Calgary project. The Calgary project is just insanely expensive compared to those (and other arena/stadium) projects.

It's tough to compare these things TBH.

It's similar to what Little Caesars arena in Detroit cost https://en.wikipedia.org/wiki/Little...20respectively.

[Bend it like Bourgeois]

Originally Posted by RoadGame

Thinking through this out loud a bit in case other people who look at capital investments in particular have some related thoughts.

This table initially struck me as a bit odd, mixing Lease payment value with cash outlays as it does. For instance when a company builds an asset for an oil company, and the oil company pays a lease on it for ~30 years (a cogeneration plant for instance) generally the people putting up the cash for construction would expect the lease payments to provide for both a return of and return on capital over the life of the lease. Now in this case the value created by the event center doesn't accrue entirely to CSEC (majority definitely, but not 100%) so I would expect that the lease wouldn't necessarily provide for a return of let alone return on all the capital.

Even then, just think about the construction bills on the core assets (first two rows) for a second. 26.8+13.2+28.7+26.4+295+207.1+13.2 = 610.4M. Are the assets in those first two rows going to cost $610.4M to build? seems low. The present value of the lease is $316M, so if $610M were the construction cost, in effect CSEC through it's lease is ultimately paying for about half (again, ignoring the need for and utility of the enabling assets)?

Or... is the value of the lease being presented at a 5% discount rate really a proxy for the debt capital the asset owner (CoC) will be able to raise as a part of the capital stack to pay for the whole thing, which does make more sense I guess from the perspective of them putting all these values in the same table despite big differences in timing of cashflows. That seems a more likely explanation.

Hmm.

Not that Murray would monetize it in the near term, but what do we figure the value of the franchise will increase by once they're in the new building? Weighing that against the present value of the financial commitments they're making, relative to say capital investments in the oil patch, would be fascinating.

Great post.
An 800m arena with 600m to pay for it begs questions. Though I think part of it is the land. There's a fair bit of land swaps in the deal so an $800m arena minus $200m in land maybe checks out.

I think a difference between a purely commercial project is the accrual of benefits are not a zero sum game. This is more like a JV maybe.

Neither the city nor CSEC could make this work on their own (if they could, it'd have been built a decade an ago). The partnership makes the building investment cost less and create way more for both parties.

[CroFlames]

Originally Posted by FlamesAddiction

Technically, they are proposing to build a new entertainment district. If it was just an arena, it would be a lot less. They are kind of using a new arena to justify larger commercial and infrastructure improvements. It kind of makes sense if you are building a downtown arena. Arenas alone take up a large foot print and have a lot of dead space if the areas around them aren't developed.

Whether or not the long term economic gains justify the current costs, I have no idea. I can see why people are apprehensive, but part of me also thinks that sometime it is nice to have nice things. To use an analogy, driving a Hyundai might be cheaper and still get you to the same places as a Cadillac, but if you are spending a lot of time in car, riding in comfort has it's upside.

This makes sense and I agree. But my argument is that in Europe it seems they can build top notch arenas and stadiums (with development around them) for cheaper than we can. Is the Mafia subsidizing their projects or something?

[getbak]

Originally Posted by CroFlames

It has nothing to do with the sport being played inside the venue. Both the Juventus stadium and Tottenham stadium included developments around the venue, just like the Calgary project. The Calgary project is just insanely expensive compared to those (and other arena/stadium) projects.

Both UBS and Climate Pledge topped $1 billion USD including surrounding infrastructure improvements.

The new arena in Tempe is looking at $2 billion USD for the full development.

[Jason14h]

Originally Posted by CroFlames

This makes sense and I agree. But my argument is that in Europe it seems they can build top notch arenas and stadiums (with development around them) for cheaper than we can. Is the Mafia subsidizing their projects or something?

In Italy for sure ! It’s just a money laundering project !

[Strange Brew]

Originally Posted by getbak

Both UBS and Climate Pledge topped $1 billion USD including surrounding infrastructure improvements.

The new arena in Tempe is looking at $2 billion USD for the full development.

Over $4 billion in Tempe when you include the lawsuit.