Arena Negotiation Discussion v2

[Jay Random]

Originally Posted by Regorium

Amusing thought considering the Saddledome is half a generation old and already considered "obsolete".

A new arena would not provide us with a great facility for "generations to come."

First off, since when is 35 years ‘half a generation’? You must come from a very long-lived species.

Now to our muttons:

The Saddledome was badly designed from the get-go. That's the problem, not its age. They just completely rebuilt the interior of MSG (which is now 50 years old and going strong), which was possible because the shell is a free-standing structure. That kind of renovation (not, I hope, at that price tag) would make the Saddledome serviceable for decades to come – but it is physically impossible because of the engineering of that poured-concrete monstrosity. You can't change the bowl because it's needed to hold up the roof, and you can't change the size of the concourse because it's defined by load-bearing columns that hold up the bowl. And you can't tuck a practice rink or extra amenities into the wings of the building, because it hasn't got any wings.

A new arena properly designed, with forethought put into the need for eventual renovations, would provide us with a great facility for generations to come. So would an old arena properly designed, but we haven't got one of those.

[topfiverecords]

Originally Posted by The Boy Wonder

Also funding a stadium is different from a cash transfer to a private entity. The city will own the stadium and lease it to the flames, as the flagship tenant, unless I am entirely mistaken

Which is even worse. Let’s give you $250M, land and we won’t charge you property tax either. Just rent our building for a small lease so we can operate at a loss and be on the hook for all maintenance, improvements and eventually demolition when you choose to vacate in 30 years.

[Textcritic]

Originally Posted by Jay Random

First off, since when is 35 years ‘half a generation’? You must come from a very long-lived species.

Now to our muttons:

The Saddledome was badly designed from the get-go. That's the problem, not its age. They just completely rebuilt the interior of MSG (which is now 50 years old and going strong), which was possible because the shell is a free-standing structure. That kind of renovation (not, I hope, at that price tag) would make the Saddledome serviceable for decades to come – but it is physically impossible because of the engineering of that poured-concrete monstrosity. You can't change the bowl because it's needed to hold up the roof, and you can't change the size of the concourse because it's defined by load-bearing columns that hold up the bowl. And you can't tuck a practice rink or extra amenities into the wings of the building, because it hasn't got any wings.

A new arena properly designed, with forethought put into the need for eventual renovations, would provide us with a great facility for generations to come. So would an old arena properly designed, but we haven't got one of those.

I am curious to know how many NHL arenas besides MSG feature this same free-standing shell design concept.

[Macindoc]

Originally Posted by Regorium

Amusing thought considering the Saddledome is half a generation old and already considered "obsolete".

A new arena would not provide us with a great facility for "generations to come."

The Saddledome was built almost 1.5 generations ago, and before modern amenities such as luxury boxes, LED scoreboards, and multi-choice concessions (there are, for example, more than 30 kinds of beer on tap at MSG) were generally found in arenas, and before concerts started to travel with elaborate sets/lighting/electronics. With its closed-in design, limited concourse area and limited ability to hang additional loads from the saddle-shaped roof, the Saddledome can never become what every other NHL arena is, and it will always be a third-rate concert venue (even Elton John is skipping Calgary in favour of Edmonton on his farewell tour). The Flames will definitely not invest any more money in the Saddledome, because there isn't anything else they can do to it structurally to improve the fan experience or increase revenue. With new revenue streams and augmented reality customer experiences becoming available at other venues, the Flames' revenue will fall behind other franchises as ticket sales become a relatively smaller portion of total revenues and player salaries escalate in response to the new revenue streams. As the income structure of the NHL changes over time, even a full Saddledome can't keep the Flames in Calgary. In spite of the claims from many that the Flames are one of the NHL's most profitable franchises, the NHL has confirmed that the Flames are already receiving equalization payments from the league. A new arena could be built to maximize new revenue streams, and could be built with the flexibility to further add or update in the future, which is not an option with the current structure.

Now, the Flames may eventually decide that the opportunities for increased revenue warrant fronting the full price of a new arena in Calgary. But being a privately owned corporation, their primary responsibility is to their owners, not to the city of Calgary, so they will make decisions based primarily on maximizing profit. As a result, the Flames would likely pay the cost of a new arena only if there was a long-term guarantee that expenses such as taxes would not significantly reduce the profitability of the franchise in Calgary compared to another location. It would not surprise me if the team quietly moved to greener pastures in five years if a new arena wasn't built by then. The Saddledome would subsequently fall into disrepair with no anchor tenant and no major events, and eventually the city would have to pay the full price of building an entertainment complex if it wanted to have any significant cultural life. So choosing not to partner with the Flames may actually cost the city more money in the long term if it wants to maintain the quality of life that its citizens currently enjoy.

[Boreal]

I was thinking today, when is the Flames regional TV deal up? That might align with construction and thus payment of a new building. So what? 2020 or 2021? Opening 2022/23 at the latest.

I think that’s an acceptable & realistic timeline for a new building. Northlands Coliseum was/is 9 years older than the Dome. That means it would be 2025 before we’re at a similar age.

This may be a irrelevant point with respect to event & revenue capability of the Dome, but... regardless of structural limitations of the Dome acts/promoters will always prefer & rave about a newer venue before it generates more revenue.

That being said... Calgary has had a vastly superior facility for 33 years and so we wait for 5-6 years to let acts/promoters see what exquisite refineries Ed’Mutton has to compliment a superior faculty before the tables are leveled and turned for the next 3-4 decades.

[Jay Random]

Originally Posted by Textcritic

I am curious to know how many NHL arenas besides MSG feature this same free-standing shell design concept.

So am I. Unfortunately, that would require an extensive session of google-fu, as I do not offhand know of any central repository for that kind of information.

So far, I have found out that the former ACC has a brain-hurtingly clever design that allows the outer walls to support the roof without any heavy lateral bracing, and that roof is so strong that MLSE were able to hang two banks of luxury boxes from the trusses as an afterthought when the building was redesigned whilst still under construction. So I think that counts as one. I shall have to look at the others over time.

[Nuje]

Originally Posted by Regorium

The Flames' offer was that they pay zero property taxes, zero lease/rent, zero operational costs, and zero maintenance/upgrade costs, but take 100% of the revenue.

Oh and the City has to front the ticket tax too.

And people still wonder why some of us aren't liking CSEC these days. Incredible.

[powderjunkie]

Originally Posted by Macindoc

The Saddledome was built almost 1.5 generations ago, and before modern amenities such as luxury boxes, LED scoreboards, and multi-choice concessions [long post outlining the challenges faced by any business to stay current and competitive]

There is nothing wrong with your post, but the Flames, and NHL's unwillingness/inability to independently meet their business needs should not the tax payer's problem. A few years after the cup run when both the team and economy were booming was the time to start planning for this, by slapping a transparent ticket tax on that would start building the kitty for this inevitable need. At least 10 years of missed opportunities to add 1-3% per ticket (doesn't get anywhere close to paying for it, but it would have been a start).

It is undeniable that the Flames provide economic and cultural benefit to the city that is hard to replicate. Placing a value on that is the big question - in the current context, I'm willing to go somewhere into 8 figures, but certainly not 9 figures.


It is a de-railment to a barely realistic fantasyland, but what I would actually see as a fair balance is to treat the Flames like a church. From my [cynical, atheist] perspective, I don't see much difference in people paying their $$ to worship red laundry or some perpendicular pieces of wood, etc.

While I'd ideally opt for no preferential treatment for either cult, I'd be happy enough with a separation of 'puck' and state, where the Flames can run their operation with fewer tax burdens, but also without any direct government subsidy. This means they've still got to own their land, build their own 'church', and operate within employment standards, etc. Sounds like a sweetheart deal that any other business owner in this city would take in a heartbeat.

[FlamesAddiction]

Something I wondered about, but I don't think the stats or facts are there, is if the demographic that would pay to use a new arena are also paying a larger share of taxes to the City that fund other things like libraries, etc...

[Aleks]

Originally Posted by cam_wmh

MSG seems similar to the inverted bowl.

MSG has the chase bridges which are almost over ice level. I watched a game seated up there, front row at the glass and it read really awesome

[Macindoc]

Originally Posted by powderjunkie

There is nothing wrong with your post, but the Flames, and NHL's unwillingness/inability to independently meet their business needs should not the tax payer's problem. A few years after the cup run when both the team and economy were booming was the time to start planning for this, by slapping a transparent ticket tax on that would start building the kitty for this inevitable need. At least 10 years of missed opportunities to add 1-3% per ticket (doesn't get anywhere close to paying for it, but it would have been a start).

It is undeniable that the Flames provide economic and cultural benefit to the city that is hard to replicate. Placing a value on that is the big question - in the current context, I'm willing to go somewhere into 8 figures, but certainly not 9 figures.


It is a de-railment to a barely realistic fantasyland, but what I would actually see as a fair balance is to treat the Flames like a church. From my [cynical, atheist] perspective, I don't see much difference in people paying their $$ to worship red laundry or some perpendicular pieces of wood, etc.

While I'd ideally opt for no preferential treatment for either cult, I'd be happy enough with a separation of 'puck' and state, where the Flames can run their operation with fewer tax burdens, but also without any direct government subsidy. This means they've still got to own their land, build their own 'church', and operate within employment standards, etc. Sounds like a sweetheart deal that any other business owner in this city would take in a heartbeat.

While it's absolutely true that the city owes nothing to a private business like the Flames, it's also true that the Flames as a private business owe nothing to the city (other than the thanks to the individual fans who support the team). The business will make business decisions, and the best business case doesn't involve staying in the city, the team won't stay, regardless of what some claim about how this is one of the best markets (as I pointed out in my previous post, they are thinking too traditionally, and not taking into account the future direction of hockey as a spectator sport). So you are absolutely correct, but the people of Calgary do need to decide if they are willing to work together with the team to find a mutually beneficial cost-sharing agreement. And the cost of having a modern entertainment facility will likely be borne by the city eventually, even if the city and the team part ways. The blind belief that the team will never leave the city because it's such a "great market" fails to take into account the changes that are coming in spectator sports.

[Robbob]

Originally Posted by Nuje

And people still wonder why some of us aren't liking CSEC these days. Incredible.

How much of that is true though. There was so much crap thrown around when things went public considering there was a NDA. Everything from free ctrain to not paying for police. The lease and property tax thing I heard, the loan for property tax was a prefance, but the operational costs one is a new one which I do not recall.

In any event that last time hot ugly because half truths or just plain bat poop was flying around.

[Senator Clay Davis]

It's basically all true, the Flames refused to comment on any of the claims. If the claims were false, the Flames would have commented, but seeing as the reporter who published the articles clearly had backup to her claims, going on the record as saying it's not true and then having her produce to goods would have been a debacle for them. Now to be fair, the Flames are not different than any other team in this situation, they wanted to spend as close to $0 on this as possible. But let's not act like their goal here is a fair deal, their goal is to rape the taxpayer as hard as possible. It's basically their fiduciary duty to do so, whether we like it or not.

[oldschoolcalgary]

Originally Posted by Robbob

How much of that is true though. There was so much crap thrown around when things went public considering there was a NDA. Everything from free ctrain to not paying for police. The lease and property tax thing I heard, the loan for property tax was a prefance, but the operational costs one is a new one which I do not recall.

In any event that last time hot ugly because half truths or just plain bat poop was flying around.

100% that the Flames didn't want to pay any property period. They called it "loan repayment"

Fact is the City was ok with paying 33% for the arena - the CESC's miserable attempt to label property tax as "loan repayment" was flat out sickening.

property taxes is something everyone one of us has to pay, and we are not billionaires. Property goes into things like infrastructure maintenance, snow clearing... all things that a new building would hoover up like a vaccuum...

the gall of the CESC to call that 'loan repayment' while their billionaire owner skips off for UK citizenship to save 1% on all the money he made in Calgary still makes me angry as i write this.

[indes]

Originally Posted by oldschoolcalgary

100% that the Flames didn't want to pay any property period. They called it "loan repayment"

Fact is the City was ok with paying 33% for the arena - the CESC's miserable attempt to label property tax as "loan repayment" was flat out sickening.

property taxes is something everyone one of us has to pay, and we are not billionaires. Property goes into things like infrastructure maintenance, snow clearing... all things that a new building would hoover up like a vaccuum...

the gall of the CESC to call that 'loan repayment' while their billionaire owner skips off for UK citizenship to save 1% on all the money he made in Calgary still makes me angry as i write this.

The City was willing to front the money, but have it all paid back IIRC.

[oldschoolcalgary]

Originally Posted by indes

The City was willing to front the money, but have it all paid back IIRC.

no

In the city's proposal, it said it would supply $185 million in funding — which includes $130 million in up-front funding, land worth $30 million and $25 million to demolish the Saddledome — with the team providing $185 million and an additional $185 million coming from a ticket tax.

The city estimated the total project cost at $555 million.

But King contended the proposal amounted to the team paying the entire cost, or more, because the team considers a ticket surcharge revenue that belongs to them and because they say they'd pay property tax.

https://www.cbc.ca/news/canada/calga...osal-1.4300015

[Major Major]

So, is the obvious compromise not 1 of 2 scenarios?

1. Cost is split 50/50, flames own and maintain building and pay property taxes on it.

2. Flames pay 67%. City owns building and no property taxes?

Both sides probably hate both deals, which is why they probably make sense.

[DiracSpike]

Originally Posted by oldschoolcalgary

the gall of the CESC to call that 'loan repayment' while their billionaire owner skips off for UK citizenship to save 1% on all the money he made in Calgary still makes me angry as i write this.

Edwards lived in Calgary from the late 80s until just recently so it's safe to say the vast vast vast majority of his fortune he paid taxes on. So relax and give the blood pressure a break.

Additionally the corporation he founded employs 10,000 people who all pay taxes.

[powderjunkie]

Originally Posted by Major Major

1. Cost is split 50/50, flames own and maintain building and pay property taxes on it.

2. Flames pay 67%. City owns building and no property taxes?

How about:

3. City pays 33%, Flames pay 33%, users pay 33% (ticket tax), flames own and maintain building and pay property taxes on it.


The only way this would ever look unreasonable is in comparison to the debacle to our north.

[oldschoolcalgary]

Originally Posted by DiracSpike

Edwards lived in Calgary from the late 80s until just recently so it's safe to say the vast vast vast majority of his fortune he paid taxes on. So relax and give the blood pressure a break.

Additionally the corporation he founded employs 10,000 people who all pay taxes.

nah.

you have your opinion, i have mine.

i'll leave it at that