Arena negotiation discussion. UPD: Flames release their proposal

[RM14]

Originally Posted by rubecube

There's no way in hell you actually believe that's a fair equivalent, do you?

Not saying it's equivalent, and I agree they are very different. I was just comparing the use of profits in that they reinvest into the operations of the Calgary Flames and not their personal gain.

[transplant99]

Originally Posted by longsuffering

Not my finest moment and I offered an immediate apology. Have you ever apologized for your abusive tone?

What apology? To me? Where? Are you seriously going to claim a two word "mea culpa" post is an apology for attacking my medical condition? BS.

As for the rest of your post. It's just as I thought. You don't want to put a stake in the ground.
You don't want to go on the record.

WTF man? I have said, CLEARLY AND NUMEROUS TIMES, I have no problem with the city picking up a portion of the tab. What that is and how it should be administered is what I am waiting for to decide if its a deal i am able to get behind or not. I mean how absolutely crazy of me to want actual numbersand see/hear actual proposals vs conjecture of all kinds eh?

If you did you couldn't criticize and mock posters you disagree with. It allows you to keep saying Nenshi's the problem, the City needs to do more, give more, but you won't put a limit on that. If you did, you might find common ground with some posters - just as New Era and I did. If people can agree on a principle funding limit then the discussion is only about negotiation tactics.

Who am I criticizing? Who am I mocking? Now you are just making stuff up. I have never ever said the city needs to do more or give more because I dont know what that is yet. LOL

As for Nenshi, you bet I believe he is a part of the problem because I have seen his act before in negotiations with businesses. That is, IMO, why King dropped the bomb he did on Tuesday...I have seen no other explanation for it that would make sense.

Do you have a bottom line or would you be fine with the whole project being financed by the City and a ticket tax - no cash contribution from Flames owners?

Or are you just here to mock and belittle?

No I do not believe that the city should finance the whole thing...good thing I never said that huh? Nor has anyone else that I have seen. Again, much to your chagrin after making that claim earlier.

Again stop with the belittling/mocking stuff, you are just making that up for some reason.

[Enoch Root]

Originally Posted by Locke

Absolutely, I just dont know what more the CSEC wants. The City will front the money but it has to be repaid from the profits of the asset that the money is being used to create.

I do see some complaint in there from the CSEC that the City is basically profiting without paying. I'm kind of coming around to that notion because they're fronting the cash and then getting it paid back, maybe with interest, maybe not, but theres details in there that are missing.

Heres where I'm at:

The City fronts 2/3s of the cash. Their third and the ticket tax.

The Ticket Tax is repaid in the form of a user fee from people who buy tickets. Fair enough.

But then the City is asking CSEC to repay the third of the cost that the City paid for?

Here is where I think the Devil is in the Details.

Whose building is it?

If the City stumps up 2/3s of the cash but is repaid it then it should be the CSEC's building. Is it? Do they want it? Owning a declining asset isnt normally a great thing.

This is where I'm at. The City wants to be 'Made Whole' over time through a business' ventures. This is a problem. Because at the end of the day what you're doing is making the CSEC pay for the whole thing on their own, just over time. They're acting as a brokering agent.

And I'm not sure where I'm at with that. I'm not sure I have enough information to really solidify this yet.

Theres lots of problems here.

If the CSEC are paying their third and then repaying the City's 2/3s through their profits and its not their building then I can see an issue with that. Even if it is their building I can see an issue with that.

If the City are just acting as a lender and then owning the asset I can see issues with that as well.

You have said this more than once, even though it has been explained more than once not to be the case. And are you not an accountant? This should be pretty straight forward...

The city would not be 'fronting' the ticket tax third. They (more accurately, the province) would simply be guaranteeing the loan.

The city would front 1/3.

[Bingo]

Man what is it about arena talk that brings the absolute worst out of people? It's pretty ugly.

I have never had a problem with people having a different view than me, but I just shake my head at those that won't accept there in another side to things.

Come on guys, you're better than that.

[cal_guy]

Another question I like to ask is does this project need to be in the $500-600 million range after all most of the NHL arenas built during the late 90s early 00s have been in the $250-450 million range when adjusted for inflation and currency rate. I know those arena didn't surpass every existing NHL arena in every way, but they address the issues with the Saddledome (not old, you can hang stuff from the roof, bigger concession area, more luxury boxes).

[transplant99]

Originally Posted by Bingo

Man what is it about arena talk that brings the absolute worst out of people? It's pretty ugly.

I have never had a problem with people having a different view than me, but I just shake my head at those that won't accept there in another side to things.

Come on guys, you're better than that.

I hope this isnt directed at me, cause i have no problem with those who dont want city money used on this thing. None, and i certainly understand that position even if i disagree with it.

I just hope people taking that stance understand the real ramifications if that ends up being the case.

[transplant99]

Originally Posted by cal_guy

Another question I like to ask is does this project need to be in the $500-600 million range after all most of the NHL arenas built during the late 90s early 00s have been in the $250-450 million range when adjusted for inflation and currency rate. I know those arena didn't surpass every existing NHL arena in every way, but they address the issues with the Saddledome (not old, you can hang stuff from the roof, bigger concession area, more luxury boxes).

I dont think there has been any actual price tag suggested has there? A lot of speculation for sure, but nothing with real hard numbers attached...much like the breakdown of any proposal.

[dre]

Originally Posted by Bingo

Man what is it about arena talk that brings the absolute worst out of people? It's pretty ugly.

I have never had a problem with people having a different view than me, but I just shake my head at those that won't accept there in another side to things.

Come on guys, you're better than that.

I moved to Calgary in the early 80's. I remember going to the All Star game with my dad and buddies. It's great to be able to enjoy this with my young boy. Even visiting other cities and people ask you were you from and then they ask "you a flames fan?" Hell ya! Not sure if Nenshi realizes this but at the end of a long work day some of us look forward to go home and watch a flames game. In a way that is our art (my blue ring or skewer of rocks). It's my soap opera I guess. Back in the day I couldn't wait to hear "Hello hockey fans!". I wish both sides would play nice, but at the end of the day it would suck if the flames left. This team has given a lot to this city. Flames have been here for 37 years. I look forward to another 37. Hopefully in the west village cause my parents live there and I can park for free and walk to the game!

[Strange Brew]

Originally Posted by rubecube

Yeah, it's kind of an interesting bit of sports history how that all went down. In the end, the new stadium in Houston ended up being funded 43% by public, 57% by the Texans.

I think that's an oversimplification but maybe close to the ultimate breakdown. Nearly all of the public money comes from a bond funded by hotel occupancy and car rental taxes.

There is also a ticket tax and parking tax.

The price tag for the football stadium was around $450 million 15 years ago.

After hosting two Super Bowls, you don't find any Houstonians unhappy with the arrangement. Too bad the team has been lousy.

https://www.bizjournals.com/houston/...12/story1.html

[Kjesse]

Originally Posted by Bunk

I've been noodling this around in my brain.

.....
1/4 owners
1/4 ticket tax
1/4 city
1/4 citizen ownership


Citizen Ownership:

Flames sell the City 1/4 share in the franchise. The City in turn sells shares to citizens. For sake of argument, 1/4 share $150m (and a corresponding $150m share of the capital cost of the building).

If you'd like to discuss or PM over why partial citizenship ownership will never, ever be acceptable to the Flames, and that the Flames are totally correct in never, ever allowing it, let me know. I opine that it would become a complete disaster over time.

1/4 citizen ownership would come with minority shareholder rights that would eventually absolutely sink the governance of the Flames, and lead to an uncertain outcome for the majority's share. That 1/4 could rally and wreak havoc in court if they felt they weren't being treated fairly, and it would lead to a major dispute that could wind up the corporation entirely.

Its a really nice thought in principle. Have the citizens part owners, be partners! In reality it the minority rights would tend to drop the value of the team from a marketability point of view with lots of other problems. You could paper the deal as much as you want there would still be too much risk to the majority. Their ability to control a unique asset is part of the actual value of the franchise.

100% ownership by the city could work on the other hand, if one thinks the city should own such an asset. At least then the internal fights could be controlled.

[sureLoss]

http://calgaryherald.com/news/local-...-its-very-fair

News Update

The Calgary Flames wanted the city to pay 52 per cent of the total cost of a new $500-million to $600-million arena north of the Stampede grounds, say sources connected to city hall.

That’s sharply at variance with the city proposal, to be unveiled Friday, which called for one-third from the city, one-third from Calgary Sports and Entertainment Corp., and one-third from a ticket surcharge.

Mayor Naheed Nenshi has already indicated the Flames wanted a higher than one-third percentage from the city, without giving details.

He called the Flames’ position “eminently unreasonable,” apparently in reference to the 52 per cent.

But Flames CEO Ken King says nobody should be surprised the Flames want both parties to pay roughly equal share. “That’s basically what we proposed with CalgaryNEXT — 50-50. It’s very fair.

“So, it should come as no surprise that any model we could put forward in Victoria Park is similar to the one put forward in CalgaryNEXT.”

CalgaryNEXT was the grand multi-facility proposal for the west end, no longer in negotiation but still technically on the table.

King also says the city’s proposal — one-third each from the Flames, the city and a ticket surcharge — “means that we actually pay three-thirds. Calgary Sports and Entertainment would ultimately pay the whole thing.”

He says the city wants to be repaid its share of the cash and also capture the ticket surcharge revenue.

[Freeway]

It's not a great look.

[GullFoss]

This is embarrassing... nenshi says his position is the city takes 1/3 of costs, when it's actually closer to 11%. King said their position is 50/50 on total cost + share in development + no property taxes. Which is just as unreasonable

The only explanation is that they both read trump's art of deal cover to cover twenty times over.

Oddly enuf the midpoint btwn the two offers (11% and 52%) is the city pays roughly one-third

[CampbellsTransgressions]

Originally Posted by GullFoss

This is embarrassing... nenshi says his position is the city takes 1/3 of costs, when it's actually closer to 11%. King said their position is 50/50 on total cost + share in development + no property taxes. Which is just as unreasonable

The only explanation is that they both read trump's art of deal cover to cover twenty times over.

Oddly enuf the midpoint btwn the two offers (11% and 52%) is the city pays roughly one-third

Yeah even Ken King isn't arguing that the city will effectively be paying 11%. Nice try.

[Jay Random]

Originally Posted by CampbellsTransgressions

Yeah even Ken King isn't arguing that the city will effectively be paying 11%. Nice try.

Ken King is arguing that the city will effectively be paying 0%.

[GullFoss]

Originally Posted by CampbellsTransgressions

Yeah even Ken King isn't arguing that the city will effectively be paying 11%. Nice try.

Actually...king said city proposed 0% as per quote below

"King also says the city’s proposal — one-third each from the Flames, the city and a ticket surcharge — “means that we actually pay three-thirds. Calgary Sports and Entertainment would ultimately pay the whole thing.”"

[cal_guy]

Originally Posted by GullFoss

This is embarrassing... nenshi says his position is the city takes 1/3 of costs, when it's actually closer to 11%. King said their position is 50/50 on total cost + share in development + no property taxes. Which is just as unreasonable

The only explanation is that they both read trump's art of deal cover to cover twenty times over.

Oddly enuf the midpoint btwn the two offers (11% and 52%) is the city pays roughly one-third

At a 10% discount rate for the city's share the subsidy is about 22%. At in the cost of the infrastructure improvements and the land 1/3 seems right.

[Backlunds_socks]

Originally Posted by CampbellsTransgressions

Yeah even Ken King isn't arguing that the city will effectively be paying 11%. Nice try.

Where is this 11% coming from? You do realize the loan will be interest free and the city will be losing ( the flames gaining) on the time value of money?

[Backlunds_socks]

Originally Posted by cal_guy

At a 10% discount rate for the city's share the subsidy is about 22%. At in the cost of the infrastructure improvements and the land 1/3 seems right.

And that doesn’t even include the fact that the CSEC could invest their 200mil else where, rather they will be.

[CampbellsTransgressions]

Originally Posted by GullFoss

Actually...king said city proposed 0% as per quote below

"King also says the city’s proposal — one-third each from the Flames, the city and a ticket surcharge — “means that we actually pay three-thirds. Calgary Sports and Entertainment would ultimately pay the whole thing.”"

My bad on the misread! Though someone should really explain how King sees it as the Flames paying the whole thing when it's very clear that they will only be paying 2/3 as a worse case.