Arena Negotiation Discussion v2

[tkflames]

Originally Posted by tkflames

Thank you for putting together this post!!

To summarize: from acity nvestment standpoint:
If all of the below expressed in today's dollars is a value greater than 0 then the city is better off then it would have been had it not invested.
$82M from parking revenue
+$231M from net increase in taxes in the area over X years
+ profit generated from 28 public days per year
-delta loss from not operating Rexal
-delta rent of city office space from before vs now

Obviously opportunity cost is excluded here, but while I dont think the city of Edmonton made a great deal, it is not difficult to imagine that with full office towers and soft improvements that the city is better off now than if they had done nothing at all.

I should add that as you point out the performance on parking revenues is under performing.

I would love to see a performance score card on all public investments 3-5 years after the fact. E.G. expected vs actual cars crossing a bridge, or expected tax revenue vs acual tax revenue on an arena.

[Mazrim]

Originally Posted by tkflames

If all of the below expressed in today's dollars is a value greater than 0 then the city is better off then it would have been had it not invested.
$82M from parking revenue
+$231M from net increase in taxes in the area over X years
+ profit generated from 28 public days per year
-delta loss from not operating Rexal
-delta rent of city office space from before vs now

I'm not sure I follow your numbers:
- If they can't reach the expected parking revenues annually, they need to pay for the loan another way. The article mentioned using more CRL dollars, which means less money for other developments, and more long term infrastructure debt.
- For the next 20 years, they won't receive any tax dollars from the district.
- The agreement states that the 28 public days are for community events, and not commercial purposes. They won't be making any money on them.

Overall, you can argue that they would have wanted an arena district there all along and this got a somewhat useful bump from Katz. But, could they have developed the area themselves, without chaining themselves to Katz and competing against his own developments in the same space? They aren't doing themselves any favours right now. The city pays for the development now, the fans pay more for tickets now, on the hopes that in 20 years they start reaping the benefits. Would they have generated more value now by developing it themselves?

[ynwa03]

Originally Posted by Monahammer

The entire point of elected office is so they can make the tough decisions rather than having to poll the entire city. If you dont like it then vote and campaign in the next election.
Plebiscite are terrible unless you can guarantee (impossible) that a special interest group on either end wont commandeer a large portion of the population in a mob mentality and scare off dissent. You can't actually get a representative sample because only those motivated to vote will go out and vote, and dislike or hatred of a project is far more motivating than liking it but not understanding the financial complexities.

This is completely true if you are talking about a public project. If you're not, then it's not unreasonable to think the public should be involved in a bigger capacity in the decision.

[tkflames]

Originally Posted by Mazrim

I'm not sure I follow your numbers:
- If they can't reach the expected parking revenues annually, they need to pay for the loan another way. The article mentioned using more CRL dollars, which means less money for other developments, and more long term infrastructure debt.
- For the next 20 years, they won't receive any tax dollars from the district.
- The agreement states that the 28 public days are for community events, and not commercial purposes. They won't be making any money on them.

Overall, you can argue that they would have wanted an arena district there all along and this got a somewhat useful bump from Katz. But, could they have developed the area themselves, without chaining themselves to Katz and competing against his own developments in the same space? They aren't doing themselves any favours right now. The city pays for the development now, the fans pay more for tickets now, on the hopes that in 20 years they start reaping the benefits. Would they have generated more value now by developing it themselves?

Fair enough. To me I would expect an increase in tax revenue not from the building itself but from the surrounding area (new towers) and increased values of the existing buildings to the tune of $230M+. If that is not the case, then I agree with you. This has not been a good investment by the city.

[GGG]

One key to remember is that these types of projects don’t necessarily create new investment in the city as much as move investment from one are of the city to another. So if the 231 million funded by the CRL a large portion of that money would have been realized in other areas of the city. The arena does not change office building demand for example.

[Matty81]

Originally Posted by ynwa03

This is completely true if you are talking about a public project. If you're not, then it's not unreasonable to think the public should be involved in a bigger capacity in the decision.

Respect your opinion but personally I totally disagree, politicians are elected to govern and if there are no clear laws regulations or policies stating that a specific type of decision requires a vote - it's within their mandate to make the decision from my perspective. Accountability in a democracy is supposed to be the next election (and the laws/guidelines in place).

Maybe there is a law in Calgary stating that if a project is with a private partner it requires a vote? I don't believe we have anything like that in Kelowna, the only time a vote is needed is where they plan to spend a significant chunk of money that needs to be borrowed, otherwise they are free to govern within their scope.

[ynwa03]

Originally Posted by Matty81

Respect your opinion but personally I totally disagree, politicians are elected to govern and if there are no clear laws regulations or policies stating that a specific type of decision requires a vote - it's within their mandate to make the decision from my perspective. Accountability in a democracy is supposed to be the next election (and the laws/guidelines in place).

Maybe there is a law in Calgary stating that if a project is with a private partner it requires a vote? I don't believe we have anything like that in Kelowna, the only time a vote is needed is where they plan to spend a significant chunk of money that needs to be borrowed, otherwise they are free to govern within their scope.

See, I agree with everything you are saying except this part. Politicians are free to campaign on whatever they like, but are not bound by any laws to follow through. Example: Nenshi was elected with the notion he doesn't support public dollars for private use without tangible benefit to the City. He can do a 180 tomorrow and decide to give the Flames the Katz deal or worse. It's really not accountability if you can spend someone else's money with the idea that they won't be able to spend it again in the future because you will vote them out.

That's why I think for things like this, public input makes sense. Spending public money on public things - by all means politicians are elected to make decisions yada yada.

[powderjunkie]

For perhaps the first time in history, the comments section of a news story was interesting:

Jeff Davision worked at CNRL for 10 years. Although it appears it was from his time in university, he might have climbed to a reasonably sr. position by the end; his next role was as a VP at a company that doesn't appear to be super tiny...

Unlikely that he was/is very closely connected to Murray Edwards, but at the very least it's a noteworthy coincidence.

[Roughneck]

Originally Posted by GGG

One key to remember is that these types of projects don’t necessarily create new investment in the city as much as move investment from one are of the city to another. So if the 231 million funded by the CRL a large portion of that money would have been realized in other areas of the city. The arena does not change office building demand for example.

In the case of the Rivers District CRL, this was one of the main reasons CalgaryNEXT was a complete non-starter for the city. They didn't want anything in the West Village cannibalizing development in the EV. So in this case, the arena directing investment in the area at the expense of others would be a feature, not a bug.

[GC91]

City council just approved funding for a new arena!

https://twitter.com/user/status/1102778034342420480


http://https://twitter.com/mpotkins/status/1102778034342420480?s=19

[KootenayFlamesFan]

Well about time. Good to see!

[GC91]

Sounds like that tweet was actually incorrect. They are still considering a proposal to fund the 4 major project's

[KootenayFlamesFan]

Oh. Well............that's something?

[MacDaddy77]

Are they still debating this? Or just having a closed session party

[Joborule]

It's undergoing a vote right now on how to proceed.

[calgaryred]

Originally Posted by GC91

City council just approved funding for a new arena!

https://twitter.com/user/status/1102778034342420480


http://https://twitter.com/mpotkins/status/1102778034342420480?s=19

Page says it doesnt exist

Sent from my SM-G930W8 using Tapatalk

[Otto-matic]

https://twitter.com/user/status/1102795710175604738

[GC91]

Originally Posted by calgaryred

Page says it doesnt exist

Sent from my SM-G930W8 using Tapatalk

It was tweeted out by Calgary Herald reporter Meghan Potkins but then she deleted the tweet and corrected herself.

[Manhattanboy]

nm

[Manhattanboy]

Meghan Potkins
@mpotkins
·
56s
Council has approved a framework for a new round of negotiations for an arena. #yyccc