[News] CSEC and City of Calgary agree to restart formal discussions on new arena

[powderjunkie]

Originally Posted by Sandman

I thought it was the city coming in with a whole bunch of new frivolous costs that caused the CSEC to back out. The mayor (who I believe was against the new building before she became mayor) thought she would swoop in and kill the deal and become some big hero...

She was wrong, and her approval rating tanked.

To add to the other posts correcting this:

the 3 issues (roads, sidewalks, solar) were known long before, but costs not nailed down. Those are typically costs borne by the developer, but a little murky in this case. As those costs became known, the city agreed to roughly 50% of them; perfectly reasonable.


Gondek supported the original deal. In fact, if you watched the council meeting where they voted on it, Councillors Wolley and Farkas (and maybe some others) raised a lot of sensible questions about ill-defined elements of the deal (mostly related to real estate). Many posting along live here cheered when Gondek 'layethed the smack down' on them for "grandstanding" (likely more directed at Farkas) and was a loud YES vote to push it through before their summer break.

[Sandman]

Guess I had it wrong, thanks y'all!

[jayswin]

Originally Posted by Sandman

Guess I had it wrong, thanks y'all!

It's a product of Licia Corbella carrying water for the Flames. She did a really good job when this happened.

[Rutuu]

Originally Posted by getbak

Kansas City did build a new arena with taxpayer money.

The funny thing is, when the Vegas and Seattle expansion talks started, someone asked one of the insiders (I think Friedman) how come we weren't hearing KC's name as a potential expansion target, and he said it was because the city has basically decided they're better off not having a major league tenant in the building. It's better for them to run the building themselves and keeping the money it generates.

When the new building first opened, a bunch of NHL and NBA teams did the whole tour of KC thing to threaten their existing cities into building them new arenas (the Penguins and Islanders both did it, as did Sacramento in the NBA, and possibly a few more), and the city got mad at being used by teams who were never serious about moving there.

Ultimately, the building opened without a major league tenant and quickly became a high-demand concert venue and a good spot for one-off sporting events like the Big-12 Basketball tournament.

Other than paying AEG a building management fee, the city gets all of the money generated from these events... and the public parking lots around the arena. If an NHL or NBA team moved in, they would want all of that money for themselves (and not just from their own games, but the concerts and other events as well). As it stands, the city is fine not having a major league team in the arena because the events actually generate money for the city, which help pay off the construction costs of the building.

This story needs more press. Makes sense from a figures point of view. The deals teams get are ridiculous. Sports are a business, act like all the other capitalists and include the PP&E, Capex and Opex in your calculations.

[Robbob]

I still think the city did CSEC a solid with the price of materials going up by giving them that out. I wouldn't be surprised if it was some sort of hand shake deal and this next venture will go rather quickly as both sides still want this done, just not at 2020 prices.

[powderjunkie]

Originally Posted by Robbob

I still think the city did CSEC a solid with the price of materials going up by giving them that out. I wouldn't be surprised if it was some sort of hand shake deal and this next venture will go rather quickly as both sides still want this done, just not at 2020 prices.

If that were the case they would have released a joint statement that they were simply hitting pause until the global uncertainty settled down. But, that wouldn't be great for CSEC after they painted themselves into a corner by negotiating concessions in exchange for agreeing to take on all cost overruns.

I can see why they took their ball and ran home, but they have nobody to blame but themselves.

[The Fisher Account]

It's really disappointing to see how much false misinformation was spewed about the cancelled Event Centre deal.

It seems to mimic what I've seen in person. All the Jyoti haters refuse to hear any facts and are absolute certain that she quashed this deal with a stroke of a tweet.

[Yeah_Baby]

Originally Posted by The Fisher Account

It's really disappointing to see how much false misinformation was spewed about the cancelled Event Centre deal.

It seems to mimic what I've seen in person. All the Jyoti haters refuse to hear any facts and are absolute certain that she quashed this deal with a stroke of a tweet.

The UCP and aligned business interests consent manufacturing media machine just keeps chugging along.

[powderjunkie]

Originally Posted by The Fisher Account

It's really disappointing to see how much false misinformation was spewed about the cancelled Event Centre deal.

It seems to mimic what I've seen in person. All the Jyoti haters refuse to hear any facts and are absolute certain that she quashed this deal with a stroke of a tweet.

Most of these people also think quash is not a word and that you simply misspelled squash.

[Sidney Crosby's Hat]

This deal will get done. All you have to do is look at franchise valuations. Oilers are worth, according to Forbes, $1.275 billion in a (slightly) smaller market than Calgary. Reason is the new arena. Flames are worth $855. That's a $420 million difference and that difference is only going to increase. The ownership will not move or sell the team because they can make back the money they invest in an arena almost instantly.

Forbes numbers, of course, aren't gospel but anytime a team is sold it seems to almost always be more than what Forbes has them pegged at so it's a good benchmark.

[Sylvanfan]

Originally Posted by Rutuu

This story needs more press. Makes sense from a figures point of view. The deals teams get are ridiculous. Sports are a business, act like all the other capitalists and include the PP&E, Capex and Opex in your calculations.

Not sure if it's true or not, but I read an artical for Business Insiders stating the the Glendale arena had better revenue since it evicted the Coyotes than when they were there.

The playbook is to make smaller markets think they need to subsidize their franchise to be in a league with Los Angeles and New York. Have that community pride pep talk to justify it.

I'm not sure if San Diego or Oakland really miss their football teams having not built them new stadiums from a pure economic standpoint.

Perhaps the City needs to take a hardline and just build a new arena whether the Flames are onboard or not. That might get the Flames to wake up and play ball. There's only about 400 million in franchise value for them at stake if they get left out of this partnership.

[Yeah_Baby]

Originally Posted by Sylvanfan

Not sure if it's true or not, but I read an artical for Business Insiders stating the the Glendale arena had better revenue since it evicted the Coyotes than when they were there.

The playbook is to make smaller markets think they need to subsidize their franchise to be in a league with Los Angeles and New York. Have that community pride pep talk to justify it.

I'm not sure if San Diego or Oakland really miss their football teams having not built them new stadiums from a pure economic standpoint.

Perhaps the City needs to take a hardline and just build a new arena whether the Flames are onboard or not. That might get the Flames to wake up and play ball.

It's 41 days a year they can book things that people in Glendale actually want to see.

[FlamesAddiction]

Originally Posted by Sidney Crosby's Hat

This deal will get done. All you have to do is look at franchise valuations. Oilers are worth, according to Forbes, $1.275 billion in a (slightly) smaller market than Calgary. Reason is the new arena. Flames are worth $855. That's a $420 million difference and that difference is only going to increase. The ownership will not move or sell the team because they can make back the money they invest in an arena almost instantly.

Forbes numbers, of course, aren't gospel but anytime a team is sold it seems to almost always be more than what Forbes has them pegged at so it's a good benchmark.

Honest question, but does franchise valuation really matter unless they are planning to sell the team? I would think that the higher it is in Calgary, the less likely they would be able to find local buyers even if they did try to sell, which may not be a good thing.

[GioforPM]

Originally Posted by The Fisher Account

It's really disappointing to see how much false misinformation was spewed about the cancelled Event Centre deal.

It seems to mimic what I've seen in person. All the Jyoti haters refuse to hear any facts and are absolute certain that she quashed this deal with a stroke of a tweet.

Originally Posted by Yeah_Baby

The UCP and aligned business interests consent manufacturing media machine just keeps chugging along.

Most local politicans are terrible at PR. Nenshi was an exception, and if this had happened under him the messaging would have been a lot different.

[Sylvanfan]

Originally Posted by FlamesAddiction

Honest question, but does franchise valuation really matter unless they are planning to sell the team? I would think that the higher it is in Calgary, the less likely they would be able to find local buyers even if they did try to sell, which may not be a good thing.

I guarantee you the value matters to the owner of the Franchise and other owners too. These guys will borrow against the Franchise value to help fund other interests.

[Locke]

Originally Posted by FlamesAddiction

Honest question, but does franchise valuation really matter unless they are planning to sell the team? I would think that the higher it is in Calgary, the less likely they would be able to find local buyers even if they did try to sell, which may not be a good thing.

Originally Posted by Sylvanfan

I guarantee you the value matters to the owner of the Franchise and other owners too. These guys will borrow against the Franchise value to help fund other interests.

Ah...beaten to it.

Especially back when interest rates were insanely low. You had a high-value asset that could back a preposterously low financing deal that could then be used to generate better returns.

Furthermore, and this is the main point of owning a Sports team, the team is currently worth ~$855M.

They bought it in 1980 for $14M.

Take that in the context of any other asset like a house or something and you can see that they're doing very, very well on their investment, especially since the operations revenue generally covers the operations costs other than losses some years and profits in others.

Its just this thing that you own that more or less takes care of itself while appreciating in value.

So obviously if you can add value without adding cost (arena partnership) then its even better.

[Muta]

https://twitter.com/user/status/1622680247341617169

Said a couple weeks ago this will be fun.

[bdubbs]

CalgaryNEXT part 2?

[Muta]

Calgary arena ‘fresh start’ could include a new downtown location

https://livewirecalgary.com/2023/02/...town-location/

[Manhattanboy]

I don't think its a secret that the Flames' owners prefer the West Village.