[News Roundup] CSEC/City arena deal UPDATED: Third Party Facilitator

[dino7c]

20-30 events a year is a lot...there would be a handful more in a modern building and they would all be 10 bellers

City will build something eventually Flames or no Flames

[Mr.Coffee]

Originally Posted by dino7c

20-30 events a year is a lot...there would be a handful more in a modern building and they would all be 10 bellers

City will build something eventually Flames or no Flames

Now this I agree with. The city will build something. But some big differences. First of all, control over design and planning and implementation. Total autonomy, which is big.

Second, profits go to, who? That’s right, city. So you can recover on costs you outlay now, rather than make a foreigner even more obscenely rich. I do actually think this situation is unique and some public money arguably should go to a project like this, especially in this context but I don’t necessarily think the city should bend over and should take an aggressive tactic in negotiations. The issue is Edwards throughout his business career isn’t used to actually negotiating things, he’s more of a bully and put others out of business kinda guy so this whole having to compromise on things just isn’t his flavour. To which it’s kinda like, tough ####?

Edwards best argument is that the Flames are a tourism draw and the city does receive economic benefit by having the team here, to that I have no doubt. But how much exactly is that worth? Have their been any studies done?

[jayswin]

Originally Posted by BoLevi

How much did Iginla make in his flames career? The second his Flames career was over he sold his house and spends all of his money in Boston and Kelowna.

Oh for sure, I wasn't meaning to really counter your point entirely, as I agree with it in a general sense. Was just offering up my own anecdotal experience that it also isn't zero that they contribute.

[Wormius]

Originally Posted by Strange Brew

Well exactly. The issue is how much, if any, should the city put in, and if they do, what should they get out of it. Don’t we agree there is some economic benefit to the City of Calgary to having a new well located, well designed arena? It’s very hard to quantify, that’s for sure.

I get the argument about subsidizing private business. I have made the argument myself. But most people that aren’t hard core ideologists would acknowledge that government can play a role in stimulating economic activity.

I guess you could look at what would be a better stimulus from the City. $300m + extra for arena / event or buy half the Bow Building and give it to any business that would relocate to Calgary.

I’d just like to see the CSEC and the City quantify the benefits of an arena / events centre to the City. It seems like neither can do that in a comparable fashion to how the benefits can be quantified for CSEC.

[dino7c]

Originally Posted by Wormius

I guess you could look at what would be a better stimulus from the City. $300m + extra for arena / event or buy half the Bow Building and give it to any business that would relocate to Calgary.

I’d just like to see the CSEC and the City quantify the benefits of an arena / events centre to the City. It seems like neither can do that in a comparable fashion to how the benefits can be quantified for CSEC.

So the city then maintains the dome until it falls down and then Calgary doesn't have a large venue?

City will build an event center and 50/50 is the best offer they will ever get IMO...I think history will prove me right, hopefully it doesn't cost us the Flames

[Strange Brew]

Originally Posted by Wormius

I guess you could look at what would be a better stimulus from the City. $300m + extra for arena / event or buy half the Bow Building and give it to any business that would relocate to Calgary.

I’d just like to see the CSEC and the City quantify the benefits of an arena / events centre to the City. It seems like neither can do that in a comparable fashion to how the benefits can be quantified for CSEC.

Would love to hear arguments like that. Instead it's all fear mongering that Flames will move blah blah blah which makes for a very binary alternative. Give them what they want or they leave.

I would much rather hear about the benefits and what is the right amount of civic investment vis a vis the long term benefits. And the benefits don't all have to be economic either IMO.

[BoLevi]

Originally Posted by dino7c

So the city then maintains the dome until it falls down and then Calgary doesn't have a large venue?

City will build an event center and 50/50 is the best offer they will ever get IMO...I think history will prove me right, hopefully it doesn't cost us the Flames

The Flames aren't going anywhere.

First - where would they go?

Second - why would the NHL let them do it? The league can make a fortune selling an expansion team to that market instead.

[Wormius]

Originally Posted by dino7c

So the city then maintains the dome until it falls down and then Calgary doesn't have a large venue?

City will build an event center and 50/50 is the best offer they will ever get IMO...I think history will prove me right, hopefully it doesn't cost us the Flames

I think what I’d like to see though, and I think there have been hints of, would we get a better value if the City built and ran it themselves. Maybe the City hasn’t built an NHL arena, but they’ve built and operate rinks, rec centres, libraries, etc. They have put into place systems to manage memberships for libraries, rec centres, events. So would we be better off going this alone and building it closer to the vision the City has. Is there a reason to believe the City couldn’t do it as well or better than the CSEC and reap more of the rewards.

[cral12]

Originally Posted by rage2

Toronto is the only success story, but that market is so huge naming rights alone are worth $800m.

Ottawa went bankrupt. Vancouver and Montreal continued to lose money and was forced to sell at losses to stop the bleeding.

Winnipeg started with $40m public money, but added another $100m 8 years later because True North was struggling with the debt. That adds up to more than the original cost of the building.

So yes, they were all privately funded but all failed except for Toronto.

Thanks for these specific examples!

Any American city breakdowns out there? (other than Detroit which I've seen posted previously)

[Cecil Terwilliger]

Originally Posted by cral12

Thanks for these specific examples!

Any American city breakdowns out there? (other than Detroit which I've seen posted previously)

Those aren’t specific. They’re vague and unsourced.

[GhostCookie]

My view on it is that is that with Nenshi gone, CSEC figured they could begin the death by a thousand cuts process on the new council, and start to force concessions on the agreement shifting costs back to the city. As mentioned earlier in the thread, CSEC basically bought the right to take over the role of project manager. The cost of this was owning the construction overruns.

CSEC never wanted to accept anything less than Edmonton's deal. Nenshi's ambivalence to their scare tactics basically broke their leverage which forced them back to the table to accept the agreed upon 50/50 deal. As others have pointed out, none of these increased costs were "foisted" on CSEC in bad faith, rather it was all part of the agreement and now those line items were getting price tags. The previous renegotiating cost CSEC the right to get those increases subsidized by the city, which means CSEC's best option is to call up the new inexperienced mayor, and hold her feet to the flame. At best she panics, gets council involved and they all pony up a new agreement benefitting the Flames. At worst, the deal is dead and they can begin the process anew.

My guess is they pretty much told her something along the lines of we get a better deal or we walk, and rather than wait for them to go through the process she got out in front and basically threw it out there. Whether that play works out to the city's benefit won't be realized for a while, however as a taxpayer, I would be pretty frustrated to find out that council called an emergency session and now we are on the hook for another 100mil. And if they get it once, they will do it again and again, and eventually you end up in the position of a sunk cost fallacy where you just keep upping the contribution since you've already invested so much.

I think at the end of the day, the mayor has read "If You Give a Mouse a Cookie" and knew exactly what would happen if she ceded more money to the Flames. At the end of the day, we are all Flames fans and want a new arena, but it can't be "at any cost".

One question to anyone more familiar with the deal (with the blowup of news pieces about the cancellation my google search is struggling to get the exact details of the deal), was the final signed deal they made including a bunch of land being given (or optioned for cheap) to the flames for this deal?

[powderjunkie]

Originally Posted by GhostCookie

One question to anyone more familiar with the deal (with the blowup of news pieces about the cancellation my google search is struggling to get the exact details of the deal), was the final signed deal they made including a bunch of land being given (or optioned for cheap) to the flames for this deal?

I don't have any details (b/c they may never have become public), but I remember in the July 2019 council meeting/vote that Woolley and Chahal had serious questions about this and wanted more details

[CliffFletcher]

Originally Posted by BoLevi

The Flames aren't going anywhere.

First - where would they go?

Second - why would the NHL let them do it? The league can make a fortune selling an expansion team to that market instead.

The NHL isn’t expanding beyond 32 teams any time soon. So the league will be happy to use the threat of relocation to extort arena better deals from municipalities (not that I think Calgary is a serious candidate for relocation).

[GhostCookie]

Originally Posted by CliffFletcher

The NHL isn’t expanding beyond 32 teams any time soon. So the league will be happy to use the threat of relocation to extort arena better deals from municipalities (not that I think Calgary is a serious candidate for relocation).

Lets face it, the economics of actually relocating to another city make it a very last ditch action to take. Much more likely to be staring that down as the Dome hits it's last years. That being said, its as much a deadline for the Flames as the city, and if you are a city hoping to land a franchise, if you are talking a franchise with literally no home in the future, you are in the drivers seat for those negotiations (unless whatever city that is has hired Holland to be in charge) and are unlikely to agree to a deal involving a billion in private funds anyways, so still not a slam dunk for the flames.

Now, you are spot on with the threats. CSEC hasn't started them yet because they are trying to make the city look like the bad guys here so they are counting on the shills to raise the alarm for them. But once that dies down, it will be full steam ahead with vague statements about the future, Bettman saying the league supports its teams playing in world class arenas, and lots of very public dinners and tours of flames brass and stars through KC, Portland, Houston, etcetera to make flames fans put pressure on the city.

[Manhattanboy]

Originally Posted by GhostCookie

Now, you are spot on with the threats. CSEC hasn't started them yet because they are trying to make the city look like the bad guys here so they are counting on the shills to raise the alarm for them. But once that dies down, it will be full steam ahead with vague statements about the future, Bettman saying the league supports its teams playing in world class arenas, and lots of very public dinners and tours of flames brass and stars through KC, Portland, Houston, etcetera to make flames fans put pressure on the city.

Maybe you could also tell us what the DOW and TSX will be six months from now.

[nik-]

Originally Posted by Manhattanboy

Maybe you could also tell us what the DOW and TSX will be six months from now.

It's the "we need a new arena" playbook and has basically unfolded that way in city after city. It's not a bold prediction.

[GranteedEV]

Originally Posted by GhostCookie

I think at the end of the day, the mayor has read "If You Give a Mouse a Cookie" and knew exactly what would happen if she ceded more money to the Flames.

[corporatejay]

Originally Posted by Ducay

buT tHInK OF ALL thE CONcErtS ThAt CuRreNtLY Pass uS up to PLAy in EdmoNton

This actually happens and it sucks. Wanting fun things in a city I live in is not stupid.

[BoLevi]

Originally Posted by corporatejay

This actually happens and it sucks. Wanting fun things in a city I live in is not stupid.

True.

But suggesting the taxpayers foot the bill actually is stupid.

[BoLevi]

Originally Posted by Wormius

I think what I’d like to see though, and I think there have been hints of, would we get a better value if the City built and ran it themselves. Maybe the City hasn’t built an NHL arena, but they’ve built and operate rinks, rec centres, libraries, etc. They have put into place systems to manage memberships for libraries, rec centres, events. So would we be better off going this alone and building it closer to the vision the City has. Is there a reason to believe the City couldn’t do it as well or better than the CSEC and reap more of the rewards.

The construction of a hockey arena and events centre is precisely the type of project that private industry is very well equipped to accomplish.

The Flames or some other private entity can find the financing, build the thing, and collect fees from concerts and rent from sports teams for the next 30 years.

There is no reason the city should be involved at all.