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

[Bonded]

Originally Posted by powderjunkie

This is bang on. And to further clarify, as it's easy to get confused:

City puts up 550M in cash.
Province puts up 330M.
CSEC puts up 40M.

The city also puts up another $316M on CSEC's behalf, which is the part that gets repaid through those $17M (+1%) rent payments.

Which is to say, the CSEC rent payments do not offset the other ~$880M above, at all.

Lol even worse. So the city is actually financing 866M? I missed that.

[powderjunkie]

Originally Posted by Leeman4Gilmour

Options can, but will they? It was stated quite a few times that the next step(s) will be definitive agreements. It's not unreasonable to believe the public will be able to see more detail when the definitive agreements are set. I just think, on this particular point, it's early to be outraged over "secret" deals when they're not secret and it's been stated many times, more details are coming. It was also stated the provincial side of the agreement will be voted on after the election. If the NDP are in, they'll know what's what. I'm not a Notley hater, but she ####ed up (IMO) making these "secrecy" claims.

If you want to take issue with the word secret, that's fine, I guess. But it sure as hell is not a prominent part of the deal, and all of the details are in fact secret, beyond the fact that CSEC has some special opportunity to these parcels, which obviously runs counter to the idea of a free market to find fair value.

[curves2000]

I am still in shock as to how the city was able to get bent over this badly in this deal. Zero lipstick to boot! A lot of people are focused on Smith and the politicking that is going on and that isn't good, but the provinces portion for infrastructure etc isn't the end of the world. Timing is suspect etc but how did the city negotiators and city council go about this?

I would have assumed that the starting point for the new arena would have been a similar split to before and then going from there. This new deal actually looks like Edwards was hell bent on extracting serious leverage and pain onto council and the mayor. There is no other way about it. How does the city lose out on

1) More upfront cash
2) Cover upfront capital costs and associated interest/financing costs
3) Naming rights, ticket tax, Calgary Municipal Land Corp as project lead, cost over runs for Flames only

4) Additional land from the Stampede board for development purposes (Stampede is city owned land)

& More that we don' even know. This is perplexing how badly they got taken above and beyond more and it stinks to high heaven. I am pro business, pro Flames, pro development, pro arena and district redevelopment and more. I am just stunned as to what I have witnessed here and it needs serious explanations and it's not going to be garbage about "world class city with world class event center" and some district that is going to be a few bars, restaurants, some chain crap and more promising all this tax lift and tax dollars to the city. We have clearly seen how the city is spending tax dollars on private enterprise and people are going to want THEIR take.

[Harry Lime]

I'm not sure why anyone cares about the cost, after $1.4B thrown away on Keystone, and $20B thrown away on well cleanup that was already paid for. At least with this, we get a tangible asset, as opposed to just lining the pockets of UCP bros.

[Zarley]

Originally Posted by powderjunkie

If you want to take issue with the word secret, that's fine, I guess. But it sure as hell is not a prominent part of the deal, and all of the details are in fact secret, beyond the fact that CSEC has some special opportunity to these parcels, which obviously runs counter to the idea of a free market to find fair value.

East Village has had property purchase deals structured in a similar manner with development partners there - with CMLC essentially providing a form of early development financing through the deal structure. I haven't seen much public outrage about those.

It's not like there is a shortage of development land in Calgary - so there is likely not a lot of value to the options (especially when you consider that land cost in that area is miniscule compared to the overall dollar value of the building), although it's difficult to comment without knowing the terms. It's likely a case of the team wanting to have some control over development immediately adjacent to the rink - similar to what we've seen in Toronto, Montreal, Vancouver, and Edmonton.

[Aarongavey]

Originally Posted by Bonded

Lol even worse. So the city is actually financing 866M? I missed that.

Yes, they are financing the Flames rent payment which is money used to get the building built. It then comes back through the rent payment over 35 years.

Upfront costs for the building and “non infrastructure as listed in the project” costs is

40 million from the Flames
944.9 million taxpayers

If you include the infrastructure the upfront costs are

40 million Flames
1.183 billion taxpayers

Flames rent goes up by 1% each year to account for inflation. If the City can borrow money at lower than 1% they could make money on the spread on the loan, otherwise they are losing money on the loan. Hopefully they find a rate lower than 1%.

[Leondros]

It is very interesting - all you have to do is look at the individuals who are thanking posts to know if its a post supportive of the UCP or NDP. UCP got exactly what they wanted - they made this issue completely political. Which frankly is quite smart given the way Calgary was leaning towards the NDP this late in the game.

As someone who has voted both UCP and NDP in the past I find the closed mindedness/'tribalness' of some posters to be mind boggling. Like some of you come across as so intelligent and analytical and than when it comes to politics your IQ dips 60 points.

[FlamesAddiction]

Originally Posted by Leondros

It is very interesting - all you have to do is look at the individuals who are thanking posts to know if its a post supportive of the UCP or NDP. UCP got exactly what they wanted - they made this issue completely political. Which frankly is quite smart given the way Calgary was leaning towards the NDP this late in the game.

As someone who has voted both UCP and NDP in the past I find the closed mindedness/'tribalness' of some posters to be mind boggling. Like some of you come across as so intelligent and analytical and than when it comes to politics your IQ dips 60 points.

Was it smart though? A lot of people in Calgary seem to hate that the City is chipping in that much, then you have people in the rest of Alberta, including a city of comparable size, who hate that provincial money is paying for infrastructure improvements related to the deal.

I think the UCP is going to lose ground to the NDP because of all this.

[Torture]

Originally Posted by Aarongavey

Yes, they are financing the Flames rent payment which is money used to get the building built. It then comes back through the rent payment over 35 years.

Upfront costs for the building and “non infrastructure as listed in the project” costs is

40 million from the Flames
944.9 million taxpayers

If you include the infrastructure the upfront costs are

40 million Flames
1.183 billion taxpayers

Flames rent goes up by 1% each year to account for inflation. If the City can borrow money at lower than 1% they could make money on the spread on the loan, otherwise they are losing money on the loan. Hopefully they find a rate lower than 1%.

Also, inflation staying at or below 1% over the life of the deal is a pretty risky bet from the City's perspective.

[Leondros]

Originally Posted by FlamesAddiction

Was it smart though? A lot of people in Calgary seem to hate that the City is chipping in that much, then you have people in the rest of Alberta, including a city of comparable size, who hate that provincial money is paying for infrastructure improvements related to the deal.

I think the UCP is going to lose ground to the NDP because of all this.

Well the battle was going to be won or lost in Calgary. It certainly looked like the NDP was gaining momentum based on the last polls. By the province stepping in and directly committing to infrastructure projects for a project that only impacts Calgarians they were able to make a municipal localized issue a provincial one. Remains to be seen if it will pay off but it certainly was calculated.

Not only that, they inserted themselves into an already volatile and emotional issue that was already quite dividing. Personally a lot of people are happy to get provincial money at all versus or friends up North. It puts the NDP into a hard situation where they either have to commit to one side or another that could impact votes.

[calgarygeologist]

By coming out with the statement of "secret deals" in the agreement it was just Notley dog whistling to her supporters to further put a negative spin on Smith without any credibility.

[MoneyGuy]

I agree that this will cost the UCP at the polls. People are seeing it for what it is - election bribery.

[Muta]

Originally Posted by topfiverecords

• Development manager to oversee entire construction needs to be hired

• Design team and construction management team hired after development manager

Absolutely f'ing STOKED for this.

[Leondros]

Originally Posted by Torture

Also, inflation staying at or below 1% over the life of the deal is a pretty risky bet from the City's perspective.

Based on historical data coupled with forecasts if inflation averaged 1% I would be absolutely shocked. The City is the main loser on this. But negotiating with Edwards is always an uphill battle. At the end of the day all things being equal this deal given the market environment is what all parties agreed to after negotiations.

[Zarley]

Originally Posted by MoneyGuy

I agree that this will cost the UCP at the polls. People are seeing it for what it is - election bribery.

Maybe outside Calgary, but I haven't talked to a single person (in real life) here who isn't happy with the new deal. Most are just sick of hearing the bickering and want to get on with construction.

[FlamesAddiction]

Originally Posted by calgarygeologist

By coming out with the statement of "secret deals" in the agreement it was just Notley dog whistling to her supporters to further put a negative spin on Smith without any credibility.

It also gives her a pass to having to say whether her government would commit to the deal, or kybosh it. By saying there is "secret" information being withheld, it allows her to both criticize the deal to appease people who don't like it, and give ambiguous statements about being open to discussion pending release of the "secret" dealings, thereby giving the pro side hope that the deal could still go through if she is elected.

It basically gives her a fence to sit on and avoid full backlash from any side.

[Zarley]

Originally Posted by calgarygeologist

By coming out with the statement of "secret deals" in the agreement it was just Notley dog whistling to her supporters to further put a negative spin on Smith without any credibility.

Wow, not sure I've seen a secret deal that's been publicly announced before.

[Boreal]

Originally Posted by MoneyGuy

I agree that this will cost the UCP at the polls. People are seeing it for what it is - election bribery.

Hopefully. Maybe it’s the cherry on top of their ice cream Sunday of incompetence.

[TrentCrimmIndependent]

Originally Posted by Aarongavey

Yes, they are financing the Flames rent payment which is money used to get the building built. It then comes back through the rent payment over 35 years.

Upfront costs for the building and “non infrastructure as listed in the project” costs is

40 million from the Flames
944.9 million taxpayers

If you include the infrastructure the upfront costs are

40 million Flames
1.183 billion taxpayers

Flames rent goes up by 1% each year to account for inflation. If the City can borrow money at lower than 1% they could make money on the spread on the loan, otherwise they are losing money on the loan. Hopefully they find a rate lower than 1%.

That's ####ing putrid. City getting bent over the table for this. Have to say, masterful work by CSEC and 'the accountant'. Looks like we had terrible negotiators on our end though, they got finagled with technicalities.

I'll take the former 50/50 deal and even tack on whatever the inflation costs are to go to city taxpayers over this billion dollar basket of nuts.

[Aarongavey]

Originally Posted by FlamesAddiction

It also gives her a pass to having to say whether her government would commit to the deal, or kybosh it. By saying there is "secret" information being withheld, it allows her to both criticize the deal to appease people who don't like it, and give ambiguous statements about being open to discussion pending release of the "secret" dealings, thereby giving the pro side hope that the deal could still go through if she is elected.

It basically gives her a fence to sit on and avoid full backlash from any side.

And the way they have structured the deal with options that somehow do not have a price point allows her to credibly say there is another shoe to drop. Might as well just let folks know the terms of the options to clarify everything.