New Edmonton Arena Construction will begin in March 2014

[dash_pinched]

Originally Posted by getbak

The NHL should do what the NFL has done and take a percentage of league revenue and set it aside for arena construction/improvement projects: http://www.fieldofschemes.com/news/a...tablishes.html

Teams can borrow against this fund, dollar for dollar matching their own investment, up to $200 million. Then, the money is repaid from the new revenue generated that would normally go into revenue-sharing.

The NFL takes 1.5% of revenue to fund the fund. They have much higher revenue, but their buildings also cost a lot more to build, and generally aren't shared with other permanent tenants.

2% of $3B in revenue would put $60M a year into a similar fund for the NHL.

This idea makes way too much sense for the NHL to adopt, getbak.

[VERVE]

Originally Posted by Tinordi

Dear Verve,

You don't know what you're talking about.

Sincerely,

Evidence based analysis

And you obviously do(?) If I can't inform you well enough then do some research and reading, because by your quote above, you are not offering any substance or logic...

[Enoch Root]

Originally Posted by getbak

The NHL should do what the NFL has done and take a percentage of league revenue and set it aside for arena construction/improvement projects: http://www.fieldofschemes.com/news/a...tablishes.html

Teams can borrow against this fund, dollar for dollar matching their own investment, up to $200 million. Then, the money is repaid from the new revenue generated that would normally go into revenue-sharing.

The NFL takes 1.5% of revenue to fund the fund. They have much higher revenue, but their buildings also cost a lot more to build, and generally aren't shared with other permanent tenants.

2% of $3B in revenue would put $60M a year into a similar fund for the NHL.

Great idea but would require more funding.

Using your numbers, assume each team would want a new building every 30 years (for easy math, the truth is probably closer to 20). That would mean one team per year.

That would mean they would have to raise $200M per year or about 7% of revenues.

[Sylvanfan]

The NHL players would also need to agree to a NFL like CBA, which if the players think the owners are being big meanies right now...just wait until they see what NFL owners would o to them.

[Vulcan]

Originally Posted by Sylvanfan

The NHL players would also need to agree to a NFL like CBA, which if the players think the owners are being big meanies right now...just wait until they see what NFL owners would o to them.

Yeah, there is no way the owners would pay for this. It would be taken out of the players share, still it should be done with the aim to self finance new facilities.

In the meantime sports leagues have made government paid financing into a science and generally don't want to start down the slippery slope to financing their own facilities. This NFL arrangement still relies on government financing for the lions share and just eases the owners investment even further.

[morgin]

Originally Posted by VERVE

And you obviously do(?) If I can't inform you well enough then do some research and reading, because by your quote above, you are not offering any substance or logic...

http://forum.calgarypuck.com/showpos...8&postcount=96

Read the rest of the thread.

[EddyBeers]

I think the city now should just build the entire thing for 800 million dollars, and then allow Katz to pay the money back over time via a ticket tax. This would protect the taxpayer and allow Katz to get his arena, a win win for everyone.

You could put a tax of 50 dollars per seat on average. 45 Oilers games a year (4 pre season and 41 regular season, no playoff games included in the calculations for obvious reasons) Katz could keep all the other revenues that he wants from concerts or whatever, but put a 50 dollar per ticket tax on the 45 Oilers games per year. A 50 dollar tax on 45 games a year would generate 42.75 million dollars a year in ticket tax revenue. Again, assuming the bargain basement interest rate of 4% per annum, the Katz group could pay off its loan from the City in 37 years and still have all the profits from the other events at the arena, in the entertainment district, etc. It would be a win win for everyone. Katz does not have to put the money up front but he gets his arena, and the taxpayer is paid off over time with a small amount of interest.

You could even put in some incentives for Katz and their group to see if the revenue streams actually grow at a higher rate for the City as they are predicting. You could take the average growth of city commercial tax revenues (factoring in inflation and other economically vital statistics) over say the past 20 years. Since the Katz Group is telling the City that revenues will grow, perhaps if revenues for the entire City actually grow (thus actually giving the City an economic benefit from the project) perhaps Katz should get a cut of that to put against his debt with the City. That way if all of his lofty projections for the City of Edmonton are realized he can benefit from it as well as the City. Maybe a 50/50 split on additional revenues.

[WilderPegasus]

But that would mean Katz would actually have to pay for the arena. A ticket tax is just taking part of what the ticket price would be from Katz and giving it to the city. Katz would much rather pay as little as possible while the public pays as much as possible.

[flamesaresmokin]

Originally Posted by VERVE

Your point about studies of arena/entertainment district such as the one planned will have virtually no impact economically (?) is horse hockey. On the contrary, one example is the Columbus Blue Jackets arena/entertainment district which is highly successful in attracting visitors and creating spinoffs in the service industries. It was rated a recommended sight to visit by TripAdvisor.

Next time you head on vacation be sure to let us all know how much fun you had at the Columbus arena district.

[metallicat]

Originally Posted by EddyBeers

I think the city now should just build the entire thing for 800 million dollars, and then allow Katz to pay the money back over time via a ticket tax. This would protect the taxpayer and allow Katz to get his arena, a win win for everyone.

You could put a tax of 50 dollars per seat on average. 45 Oilers games a year (4 pre season and 41 regular season, no playoff games included in the calculations for obvious reasons) Katz could keep all the other revenues that he wants from concerts or whatever, but put a 50 dollar per ticket tax on the 45 Oilers games per year. A 50 dollar tax on 45 games a year would generate 42.75 million dollars a year in ticket tax revenue. Again, assuming the bargain basement interest rate of 4% per annum, the Katz group could pay off its loan from the City in 37 years and still have all the profits from the other events at the arena, in the entertainment district, etc. It would be a win win for everyone. Katz does not have to put the money up front but he gets his arena, and the taxpayer is paid off over time with a small amount of interest.

You could even put in some incentives for Katz and their group to see if the revenue streams actually grow at a higher rate for the City as they are predicting. You could take the average growth of city commercial tax revenues (factoring in inflation and other economically vital statistics) over say the past 20 years. Since the Katz Group is telling the City that revenues will grow, perhaps if revenues for the entire City actually grow (thus actually giving the City an economic benefit from the project) perhaps Katz should get a cut of that to put against his debt with the City. That way if all of his lofty projections for the City of Edmonton are realized he can benefit from it as well as the City. Maybe a 50/50 split on additional revenues.

I stopped reading at the city spend 800 million. Taxpayers don't want a CENT to go towards this project, how do you think spending 800 million would go over?

[EddyBeers]

Originally Posted by oilers_fan

I stopped reading at the city spend 800 million. Taxpayers don't want a CENT to go towards this project, how do you think spending 800 million would go over?

But a 50 dollar ticket tax would allow Katz to pay back the City in 37 years. The City eventually would not be paying anything to build the arena (except for the additional 2-3 percent it would probably cost the City to borrow the money on top of the 4% they are actually getting in interest from Katz).

In 2011 the average ticket price was 70 bucks. http://www.forbes.com/teams/edmonton-oilers/

If you made it a 70 dollar ticket tax, Katz could have his arena paid off in 21 years. Win Win for everyone, Katz gets his arena, and the taxpayer does not have to pay for it. I am sure Katz as a respectable business man does not want the government interfering with his capitalist operations. Slap a 70 dollar ticket tax on all Oilers games and let him run the arena as his own, making all the profits and paying all the expenses and lock him into a 21 year lease where the damages for breaking the lease are the equivalent of the amount outstanding on the arena loan and get a personal guarantee from him and call it a day.

[metallicat]

So 50 dollars per ticket, per game? My current tickets cost me 50 dollars each, per game. So my cost would double? Guess how fast I'd be cancelling my season tickets. And 37 years to pay the city back, good lord.

[Fire]

Originally Posted by oilers_fan

So 50 dollars per ticket, per game? My current tickets cost me 50 dollars each, per game. So my cost would double? Guess how fast I'd be cancelling my season tickets. And 37 years to pay the city back, good lord.

He's trolling you, just ignore him.

[Vulcan]

Originally Posted by Fire

He's trolling you, just ignore him.

Well IMO, he is giving some perspective of what the Oilers are asking the governments to do and the cost of subsidizing this project. Lets face it major league pro sports don't make financial sense to the public and without subsidies, don't make financial sense to the owners. They are expensive toys and while there is nothing wrong with toys, don't get misled by your zeal for pro sports as being financially sound.

[metallicat]

Well he started off by inflating the cost of this thing by nearly double. Not sure where he got 800 million dollars from. If he's giving perspective, at least get the numbers in the correct ballpark.

[The Voice of Reason]

Originally Posted by oilers_fan

Well he started off by inflating the cost of this thing by nearly double. Not sure where he got 800 million dollars from. If he's giving perspective, at least get the numbers in the correct ballpark.

The only way the proposed arena in Edmonton comes in on or below budget is if Katz pays for the entire thing himself. If the public is footing the bill, you can almost guarantee that it's going over budget.

[Fire]

Originally Posted by Vulcan

Well IMO, he is giving some perspective of what the Oilers are asking the governments to do and the cost of subsidizing this project. Lets face it major league pro sports don't make financial sense to the public and without subsidies, don't make financial sense to the owners. They are expensive toys and while there is nothing wrong with toys, don't get misled by your zeal for pro sports as being financially sound.

I have no problem with a ticket tax to help pay for the arena but he was purposely exaggerating to get a reaction out of people.

I rather see no public money go directly toward new arenas in Edmonton or Calgary. Though I would ok with the government improving the infrastructure around the arena.

[EddyBeers]

Originally Posted by oilers_fan

Well he started off by inflating the cost of this thing by nearly double. Not sure where he got 800 million dollars from. If he's giving perspective, at least get the numbers in the correct ballpark.

Do you think that the now 487 million dollar projected price tag (up almost 10 percent in one year) is going to be the final price tag? Do you think that they will not need to provide infrastructure improvements to the downtown core for the arena? Right now Katz is putting absolutely nothing into this thing, zero dollars, he is getting a mortgage from the taxpayer and paying that mortgage off at a projected 5.5 million dollars over 35 years. He then gets to use the arena for free and pay zero dollars in rent on the project. But he gets to keep all the profits.

Somehow the 478 million dollar price tag does not include the estimated 25 million dollar cost to acquire the land for the arena. If we assume that you cannot have an arena without land, and we know that the City paid for that land, then the costs for this 478 million dollar arena are at 503 million dollars.

Of course the costs of the arena and the land do not include the infrastructure costs that will be incurred by the taxpayer for the arena. Unless you think that the existing infrastructure in that part of the city can handle the increased traffic that will come from this new arena (I find that almost impossible to believe). A conservative estimate on the infrastructure costs would be 250 million dollars (given that one interchange at South Edmonton Common cost 261 million dollars). That gets you up to 753 million dollars. If you assume that there will be a further 10 percent cost over run on the project, the entire thing will cost about 800 million dollars.

Katz is contributing absolutely nothing, zero dollars up front for a 800 million dollar project. For that contribution, he gets 20 million dollars in the first 10 years from the City of Edmonton for advertising (presumably because he is may change the name to the North Alberta Oilers and the City would lose out on the "free" advertising that being called the Edmonton Oilers provides). Of course, even the mortgage is a hidden subsidy for Katz, as the government will be able to borrow money at at least 4% lower than private lending rates, so right there he is getting an additional 4 million dollar a year subsidy from the government. Eventually even governments lose their ability to borrow money at lower rates and lose their AAA rating potentially. Borrowing the 100 million that Katz is "supposedly" putting in under the government may restrict the government's ability in the future to borrow for other projects.

800 million is not an astronomically high number to project the entire cost of the project, but if you want we can just go with the arena costs and agree that Katz wants the taxpayer to fund 100% of the costs of a now 503 million dollar arena.

[VERVE]

Originally Posted by morgin

http://forum.calgarypuck.com/showpos...8&postcount=96

Read the rest of the thread.

I see I am given studies presenting conclusions in contrast to mine and to which I am told “I have no idea of what I am talking about”. Like all studies, there are research papers that provide views presenting all sides. It is easy to cherry pick data to fit your model and skew the curve to make it so. It happens all the time. This particular case it is not a control study meaning there are so many tangibles and variables that differ from one model to another that a slight change could make a huge difference.
__________________________________________________ ______

“One of the noted benefits associated with the construction of a new sport facility is the creation of jobs. Initially, there will be many construction jobs created. Once the construction is complete, individuals will be needed to run the facility, from ticket collectors to concession stand workers to maintenance personnel. Another benefit is when these supporters and employees spend money in the local community. The tourist attraction also serves as a benefit because these tourists bring in outside money and spend it within the community. It is argued that this new spending has a “multiplier effect.” In other words, as income within the community increases, there will continue to be more new spending and, as a result, more jobs created (Feng & Humphreys, 2008).

Most studies have set out to prove the impact on jobs, income and tax revenues, while the intangible effects have been mostly ignored. Sports facilities and teams tend to have an impact on the community’s quality of life. This is an intangible benefit that is often related to civic duty and pride, community visibility and the enhancement of a city’s image. However, intangible benefits are extremely hard to measure and are, therefore, often omitted from these economic studies (Coates & Humphreys, 2004).

Does it make sense to use public funds to attract and retain sports franchises? Many studies say no if the only benefits are increases in economic activity and tax revenues. However, when considering the quality-of-life benefits, one can often justify the large public spending. These quality-of-life benefits are not always included in the debate on subsidizing sports facilities because it is so difficult to measure these types of benefits. It is hard to argue, though, that one main benefit of a new sports facility comes from the improved quality of life of the surrounding community. One thing for sure is that this debate will continue to be a hot topic of discussion worldwide, especially with the crisis facing our economy today.
http://thesportdigest.com/archive/ar...rts-facilities
__________________________________________________ _________________________
But new research done in the past decade by Rosentraub (a University of Michigan professor who consulted on downtown arena projects in San Diego and Los Angeles)and by other leading sports economists shows that arenas, if designed and financed correctly, can revitalize a downtown.
"I still agree that at the regional level, this (a pro sports arena) has almost no effect, but if you concentrate it in the downtown area, if you build a mix of commercial and retail, and you re-orient the planning around it, it can have a profound effect," Rosentraub says. "You can have some very positive outcomes."

His new report for city council, done with the University of Alberta's Dan Mason, looked at whether a downtown arena district will hurt other downtown businesses. Rosentraub studied property values in five U.S. cities (Kansas City, Cleveland, St. Paul, Columbus, Minneapolis) and found that the declines in those downtowns either stopped or were turned around after downtown arena projects were built.

http://www.canada.com/story_print.html?id=f218e5b5-da03-4a94-a24f-ba922b181e9a&sponsor
__________________________________________________ __________________
What happened with the NationWide Arena District:

The District has also emerged as desirable place to conduct business, as the over 1 million square feet of office space has a 95% occupancy rate. All of this activity has also made the District a desirable place to live. There are currently 6 apartment and condominium projects in the District, with at least two new projects in the planning stages. The synergies of entertainment, office space, and housing development provide an important economic stimulus to the central Ohio economy. In 2006 alone, we estimate that the District generated $1.6 billion in sales. The success of the project is manifest both in terms of the continued development around Arena District and in terms of the model of mixed use development around a sports arena becoming the new norm.

https://docs.google.com/viewer?a=v&q...2aiMApK8_5kW4w
__________________________________________________ ______________________________
“They’re accurate when they just talk about all the jobs and the taxes that are happening in the Arena District,” Greenbaum said of the city and county leaders who hold up his and Buser’s reports. “What is not accurate is if they are saying this is all new net jobs and economic activity.”
Having a vibrant district is a benefit in itself, Greenbaum said. “A lot of the people who have done cost-benefit analysis don’t find that the benefits exceed the costs,” he said. “But you could do that with a lot of the things the government spends money on, parks or other things that make a city a nice place to live. They’re difficult to quantify in terms of costs and benefits.”

Robert T. Greenbaum, a professor at Ohio State University’s Glenn School of Public Policy, was hired by the Franklin County Convention Facilities Authority
http://www.dispatch.com/content/stor...renaboost.html
__________________________________________________ ____________________
Measuring the True Costs + Benefits:
Deciding whether or not a city should subsidize sports stadiums can be a difficult decision for both voters and policy makers. It becomes increasingly difficult to decide these matters when lobbyists from both sides produce statistical data that is so seemingly contradictory. In order to filter through this information it is important to understand the geographic scale considered, the considerations taken in measuring opportunity costs, and the ways in which employment data is compiled. In general, it is important to commission, or study the works produced by entities that are as thorough and unbiased as possible.

Stadium Design: Site Selection, Mixing Uses, and Integrating Interests
No two cities or sites are the same. That being the case, it is critical to realize that the stadium being proposed in any given community will undoubtedly produce a different set of results than any case study that will influence your decision-making. In negotiating whether or not to subsidize construction of a new stadium, it is important to consider whether or not the proposed stadium is sited and designed in a fashion that integrates the interest of the team, the neighbors, and the city at large. It is also important to ask whether or not this facility might be able to share in some of the infrastructure costs that the city might be ready to spend on projects, and how expenditures on stadium subsidies might integrate with other public interests. With these issues properly addressed, one will be better equipped at deciding whether or not subsidizing sports stadium construction in your locale fits within the greater interests of the constituents at play.

http://www.umich.edu/~econdev/stadium_subsidy/

[VERVE]

Originally Posted by flamesaresmokin

Next time you head on vacation be sure to let us all know how much fun you had at the Columbus arena district.

I don't get it but it sounds like a nice place to visit.