[News] CalgaryNEXT Announcement. New arena details emerge.

[jayswin]

Originally Posted by You Need a Thneed

This is why Bow Trail needs revising as part of the VW plan.

As excited as I am for CalgaryNEXT I'm even more intrigued by this VW plan. Is pylon involved at all? If not, he should be, he's been working with Volkswagens for years.

[bob-loblaw]

I'm not too familiar with that end of downtown and the parking situation, but how many parkades/parking lots would be a reasonable distance from the proposed place?

[LIP MAN]

Originally Posted by bob-loblaw

I'm not too familiar with that end of downtown and the parking situation, but how many parkades/parking lots would be a reasonable distance from the proposed place?

There's a reasonable amount. Some of the local businesses would do well to have lots open on game days.

[TX_Flame]

Originally Posted by Barnes

I think it should be cleaned up yesterday and don't particularly care about the roads as I rarely use them but do see that the area could be improved. There's a lot of assumptions being thrown around on the building, financing, etc. I would just hate to see people start thinking that the Bow is full of creosote.

There was 1 monitoring well that found levels high enough to warrant further investigations. The important thing to note though is any contamination on the north bank is coming from groundwater traveling along below the river not the river itself. Cleaning up the site will stop this from happening further but how much of it has already settled to bedrock and traveled via groundwater in areas outside of where cleanup will be happening. Once the site is cleaned, this problem doesn't necessarily go away.

At least the problem shouldn't keep getting worse once it's cleaned.

[Enoch Root]

Originally Posted by Strange Brew

If the City has a lower cost of borrowing than the Flames then why shouldn't the benefit of the spread accrue to the City instead of the Flames?

If the City gets in the middle of that transaction, where is the benefit to them? If you are starting a business and need a $1 million to start and you come to me for the money saying " hey the bank will give you a lower rate than me, so why don't you borrow the money and I'll pay you back". Why would I incur the credit risk in that transaction without a benefit?
This seems like a minor issue in the whole scheme of things so I hope no one calls me small minded for asking this question. But to say there is no impact of the City essentially guaranteeing this debt, well that is wrong. In addition to credit risk it could well increase their future costs of borrowing.

Your comments aren't exactly 'wrong' but they are at least misleading, if not inaccurate.

No one said there is no impact, but the impact is (under normal circumstances) negligible to non-existent.

It would not affect their credit rating, and it would not increase their future cost of borrowing

UNLESS

they are already near their credit limits and/or have already saturated their name in the markets. And here's the thing, if that were the case, then they would simply not be willing to discuss the issue.

Why would they do it? As a bargaining chip. It would reduce one cost of the project and if they had a brain, they could agree to that in exchange for other considerations.

[Strange Brew]

Dude - you make some good points but throwing in comments like "if they had a brain" make you sound condescending. It is possible that others have a slightly different take than you and doesn't make them idiots.

[Enoch Root]

Originally Posted by Strange Brew

Dude - you make some good points but throwing in comments like "if they had a brain" make you sound condescending. It is possible that others have a slightly different take than you and doesn't make them idiots.

I was referring to the city, but yeah, bad choice of words

[Enoch Root]

Originally Posted by Strange Brew

Dude - you make some good points but throwing in comments like "if they had a brain" make you sound condescending. It is possible that others have a slightly different take than you and doesn't make them idiots.

I am not trying to be condescending here. I have worked in the bond markets for decades and I am simply trying to provide some clarification on one issue in which I can, in a thread that is chock full of opinions and in some cases inaccuracies.

[Strange Brew]

Thanks - I appreciate your perspective. The way I see it is that there is no reason for the City to borrow this money on behalf of the Flames (speaking strictly from the City's perspective) unless it is helpful in the negotiations. It should lower the cost to the Flames. So the question is what is it worth to the Flames. Is that basically correct?

[corporatejay]

Originally Posted by Enoch Root

I am not trying to be condescending here. I have worked in the bond markets for decades and I am simply trying to provide some clarification on one issue in which I can, in a thread that is chock full of opinions and in some cases inaccuracies.

Do you work in investment banking or brokering? The reason I ask is because pricing on bonds is heavily dependent on leverage. Admittedly I don't know how municipal bonds get priced, but any investment grade notes are going to be dependent on market as well as how levered the city is. Presumably this could impact their ability to get financing in the future.

For example if they go out and get this at 3.25%, the next time they go to market, given the additional debt they've taken on, they might get 3.5% (assuming all other things being equal).

That extra .25% over 20 years isn't insignificant.

[Enoch Root]

Originally Posted by corporatejay

Do you work in investment banking or brokering? The reason I ask is because pricing on bonds is heavily dependent on leverage. Admittedly I don't know how municipal bonds get priced, but any investment grade notes are going to be dependent on market as well as how levered the city is. Presumably this could impact their ability to get financing in the future.

For example if they go out and get this at 3.25%, the next time they go to market, given the additional debt they've taken on, they might get 3.5% (assuming all other things being equal).

That extra .25% over 20 years isn't insignificant.

What you're suggesting COULD happen. But probably not (which is why I keep saying it's inaccurate).

It COULD happen, if they had already saturated their credit lines (i.e. issued too much debt already).

But if that were true (that they already have too much debt floating) they would never agree to issue for this project.

[Enoch Root]

Originally Posted by Strange Brew

Thanks - I appreciate your perspective. The way I see it is that there is no reason for the City to borrow this money on behalf of the Flames (speaking strictly from the City's perspective) unless it is helpful in the negotiations. It should lower the cost to the Flames. So the question is what is it worth to the Flames. Is that basically correct?

Essentially, yes.

[Enoch Root]

I would be happy to put more detail into this issue (I will do it on the weekend when I have more time).

But before I do, I am missing one piece of information and I wonder if there is anyone here who can clarify for me:

Someone mentioned earlier is this thread that the City issues through the Province (not directly). I would suspect that is true, but I am not 100% certain.

Can someone verify or refute that fact?

Once we get that cleared up, I would be happy to outline how it works (whether it be provincial or municipal - or conversely, commercial debt if the Flames have to secure it themselves).

[Bend it like Bourgeois]

Originally Posted by Strange Brew

Thanks - I appreciate your perspective. The way I see it is that there is no reason for the City to borrow this money on behalf of the Flames (speaking strictly from the City's perspective) unless it is helpful in the negotiations. It should lower the cost to the Flames. So the question is what is it worth to the Flames. Is that basically correct?

I'm sure the flames will take cheaper money if they can get, and I'm not disagreeing with the other stuff you've been told, but there might be a couple other wrinkles.

1 is just procedural. I don't know the ins and outs but having the money as a city ticket tax might make it possible to apply that fee to to most number of uses - like how they can add airport departure fees to taxi bills.

2 - and this is maybe way bigger, is the revenue as a tax means it's not HRR. A poster mentioned this a while back (which I could remember the name to give them credit). If the flames borrow money and just add $10 to a ticket to pay it off, half of that goes to the players. As a tax it all goes straight to the $250m. The flames could pay the city a premium on the funds and still come out way ahead.

As others have said I'm sure this is all subject to negotiation, but I wouldn't assume the city loses by fronting money. It may even be an advantage.

[Southside]

On an admittedly simplistic level the City can borrow at better rates than any private entity because they have the power of taxation. Regardless how a municipality might mismanage their finances they always have the power of taxation to back their commitments, therefore lower risk to creditors.

[CroFlames]

Originally Posted by Southside

On an admittedly simplistic level the City can borrow at better rates than any private entity because they have the power of taxation. Regardless how a municipality might mismanage their finances they always have the power of taxation to back their commitments, therefore lower risk to creditors.

Loaning money to an NHL franchise like the Flames is probably also very low risk for a private lender as well.

Flames aren't going anywhere for a long ass time. And with the new economics of the NHL are basically guaranteed to not lose money like the old days.

[Southside]

^ Sure, but if your main concern is security, you will invest in (lend to) the guarantee, right.

[Enoch Root]

Originally Posted by CroFlames

Loaning money to an NHL franchise like the Flames is probably also very low risk for a private lender as well.

Flames aren't going anywhere for a long ass time. And with the new economics of the NHL are basically guaranteed to not lose money like the old days.

No private enterprise is 'guaranteed'.

And governments have lower rates than commercial enterprises

[Bar-Down]

The Government could demand that the company Domtar pays for the Creosote cleanup costs.

While Alberta officials have expressed reluctance to order Domtar to remediate the site because they did not break any laws of the day, B.C. is forcing the company to clean up a former wood preserving plant that was also closed and sold in the 1960s.

South of the border, state and federal environmental protection agencies have required Domtar to pay $13. 5 million to remediate two contaminated sites, including the cleanup of a former coal tar refinery in Duluth, Minnesota that the company closed in 1948 and sold several years later.

Domtar, which had net earnings last year of $364 million on sales of $5.6 billion, says in its most recent financial filings that it has also been notified it may be responsible for an undisclosed number of other hazardous waste sites in which no formal proceedings have yet been started.

The company has set aside $60 million to cover future environmental remediation costs.

http://calgaryherald.com/news/politi...eosote-cleanup

[corporatejay]

Katie Baker from Grantland with a great piece on CalgaryNEXT.

“The mere threat of a team’s falling into second-class status has been enough to strike fear into the hearts of politicians and fans alike.”
—Field of Schemes, page 73

http://grantland.com/the-triangle/ho...ressure-pitch/