Arena negotiation discussion. UPD: Flames release their proposal

[kermitology]

Originally Posted by GioforPM

http://www.canoe.ca/HockeyCalgaryArchive/apr14_fla.html

This was one, even after they met the ticket goal:

https://www.theglobeandmail.com/spor...ticle18424260/

Think about the tone that Hotchkiss has with his comments here:

"We're not guaranteeing that," said Hotchkiss when asked if the Flames had officially put away their for-sale sign. "We feel we're going down a road that's going to get us there [toward stability]. . . There is no move to sell the team. I don't believe that will happen. I don't think [the lease and lottery negotiations]will be a deal breaker but I can't prejudge that."

"The fan support had to be first," Hotchkiss said. "If that wasn't there we had nothing to talk about. We made it clear from the start that the 14,000 season tickets were important to us but that there were other things we have to solve."

The point being made is that Hotchkiss was realistic in his message to fans: please show us you want to us to stay, if you don't, we won't have any choice but to sell. And after that commitment was made there were other pieces of the puzzle that needed to be worked on, but first and foremost - the fan commitment needed to be there.

That's a lot different than the tone taken by King and co. Who flat out refuse to talk about it, basically just idly threatening through Bettman or Francis that if the city doesn't bend the knee they're going to pull up stakes. To which my response, is what are you waiting for? What's the difference between putting the team up for sale tomorrow versus 2 - 5 years from now? Why even bother saying you'll play out your string here? Just go or don't.

Not to mention the lackadaisical effort put forth by the team this season not helping their cause for sympathy. It's like a spoiled child asking for a new toy - throwing a tantrum when the parents say no because they have a used one they treat like garbage.

[GioforPM]

Originally Posted by kermitology

Think about the tone that Hotchkiss has with his comments here:



The point being made is that Hotchkiss was realistic in his message to fans: please show us you want to us to stay, if you don't, we won't have any choice but to sell. And after that commitment was made there were other pieces of the puzzle that needed to be worked on, but first and foremost - the fan commitment needed to be there.

That's a lot different than the tone taken by King and co. Who flat out refuse to talk about it, basically just idly threatening through Bettman or Francis that if the city doesn't bend the knee they're going to pull up stakes. To which my response, is what are you waiting for? What's the difference between putting the team up for sale tomorrow versus 2 - 5 years from now? Why even bother saying you'll play out your string here? Just go or don't.

Not to mention the lackadaisical effort put forth by the team this season not helping their cause for sympathy. It's like a spoiled child asking for a new toy - throwing a tantrum when the parents say no because they have a used one they treat like garbage.

The statement was, I thought, a lot like what Burke said and what King said. If they can't get to a solution, they will have little choice.

Hotchkiss' statements were designed to put pressure on the fans and the government as well (since he squeezed the latter on the lease deal). you could make exactly the same arguments about his statements that you are making about the present people involved. You just like Hotchkiss and don't like Edwards/King/Bettman (who was also in on the earlier stuff).

[jayswin]

Everything about the way the Calgary Flames have gone about trying to get a new arena has been an unmitigated disaster. Every. Single. Aspect.

[kermitology]

Originally Posted by GioforPM

The statement was, I thought, a lot like what Burke said and what King said. If they can't get to a solution, they will have little choice.

Hotchkiss' statements were designed to put pressure on the fans and the government as well (since he squeezed the latter on the lease deal). you could make exactly the same arguments about his statements that you are making about the present people involved. You just like Hotchkiss and don't like Edwards/King/Bettman (who was also in on the earlier stuff).

Like I said it's in the tone: Hotchkiss was presenting a rational case, and doing so saying - look we don't want to move, so please prove to us you're willing to keep us here.

The Flames today want a building. The offers have been made, but there's no negotiation. The Flames have made it clear, give us what we want - we're not interested in talking. It's a take it or leave it approach. That's not the same. Hotchkiss asked for 5000 additional season ticket holders, and then needed to present a business case to the province and city for help.

Today - there's nothing going on.

[monkeyman]

Originally Posted by GordonBlue

he's also an owner who has moved his team because Edmonton didn't bend over for him. fringe sport with an owner who had oiler sized asks.

From what I understand, the oilers wanted to buy the team and when he refused, the oilers made it very difficult for him to stay in Edmonton. They were trying to force him out, and instead of caving and selling, he moved the team.

[RM14]

Originally Posted by GioforPM

The statement was, I thought, a lot like what Burke said and what King said. If they can't get to a solution, they will have little choice.

Hotchkiss' statements were designed to put pressure on the fans and the government as well (since he squeezed the latter on the lease deal). you could make exactly the same arguments about his statements that you are making about the present people involved. You just like Hotchkiss and don't like Edwards/King/Bettman (who was also in on the earlier stuff).

The situation at that time was completely different. The team only had 9000 season ticket holders, at some of the lowest prices in the league. Hotchkiss provided actual figures of projected losses and at nearly 100 million over the coming 4-5 years.

The Flames are well supported here these days and are unable to make the same claims as Hotchkiss. Given, the Flames recent message is that they are doing ok for now, but it could get bad in the long run at which time they will need to evaluate options.

[ah123]

Originally Posted by jayswin

Everything about the way the Calgary Flames have gone about trying to get a new arena has been an unmitigated disaster. Every. Single. Aspect.

Agreed. As pointed out elsewhere in this thread (and the G&M article below), this is about increasing revenues and not just the arena.

The partnership that owns the Calgary Flames proposed a deal for a new arena that would give the private company a chance to transform into the real estate developer for a potentially lucrative new community, according to documents obtained by The Globe and Mail.

https://www.theglobeandmail.com/news...ticle36521316/

Flames ownership and the city have different end-goals, which is, in my mind, the biggest issue

[kermitology]

Originally Posted by ah123

Agreed. As pointed out elsewhere in this thread (and the G&M article below), this is about increasing revenues and not just the arena.



https://www.theglobeandmail.com/news...ticle36521316/

Flames ownership and the city have different end-goals, which is, in my mind, the biggest issue

Ding ding ding ding.. this is why they want the Katz deal. This is why they bullied forward with a CalgaryNext proposal that the mayors office had already told them wasn't going to be a good idea, and why they offered an outrageous plan for Victoria Park.

It's West Village or death for them because this isn't about CSEC, it's about being a developer.

[GioforPM]

Originally Posted by RM14

The situation at that time was completely different. The team only had 9000 season ticket holders, at some of the lowest prices in the league. Hotchkiss provided actual figures of projected losses and at nearly 100 million over the coming 4-5 years.

The Flames are well supported here these days and are unable to make the same claims as Hotchkiss. Given, the Flames recent message is that they are doing ok for now, but it could get bad in the long run at which time they will need to evaluate options.

You are ignoring the other part - the arena deal he got. But other than that, I agree.

[RM14]

Originally Posted by GioforPM

You are ignoring the other part - the arena deal he got. But other than that, I agree.

So, prior to the year 2000, the Flames Partnership had to pay annual lease payments?

Anyone know how much those would have been?

[Robbob]

Originally Posted by kermitology

Ding ding ding ding.. this is why they want the Katz deal. This is why they bullied forward with a CalgaryNext proposal that the mayors office had already told them wasn't going to be a good idea, and why they offered an outrageous plan for Victoria Park.

It's West Village or death for them because this isn't about CSEC, it's about being a developer.

Except earlier it was mentioned that a deal was on the verge of being done in the East Village and then suddenly imploded and snowballed into this Hatfield and McCoy feud because of the egos.

[Flash Walken]

Originally Posted by Robbob

Except earlier it was mentioned that a deal was on the verge of being done in the East Village and then suddenly imploded and snowballed into this Hatfield and McCoy feud because of the egos.

that sounds like a bunch of bull to me, quite frankly.

I've heard the exact opposite.

[Parallex]

Originally Posted by Flash Walken

I've heard the exact opposite.

What did you hear? (And from whom did you hear it).

[GioforPM]

Originally Posted by RM14

So, prior to the year 2000, the Flames Partnership had to pay annual lease payments?

Anyone know how much those would have been?

They didn't make lease payments but IIRC they wanted provincial money from lotteries and a tax break (which they got). Earlier, in 1994 they got cut of other revenues (maybe 100%) from the city.

This is what I got from another forum:

1994 Herald

Quote:
TERMS OF THE DEALS

* $12 million in national infrastructure money from the city, province and federal government to go to renovations of the 'Dome, including luxury private boxes. The Saddledome Foundation pays the city's $4 million share.

* Flames and Foundation split the cost of 41 luxury boxes and more than 1,000 club seats.

* Flames pay the Stampede Board $20 million to get out of existing lease, which expires in 2002. The Flames then assume full management rights to the Saddledome.

* The Stampede Board agrees to use the $20 million to pay down its $34 million debt.

* The Flames now get revenue from areas such as parking and concessions.

* Flames also agree to contribute $14.5 million to amateur sport over the duration of the new 20-year lease.

* A ticket surcharge to help pay the municipal portion of the education levy has been talked about, but the Flames would prefer not to do it. As of now, there are no plans for surcharges in Calgary.

* Seating capacity: 20,230
and

Quote:
The Saddledome, and other publicly-owned facilities, had previously been exempt from the education portion of property taxes until a change was made to the Municipal Government Act in June.
The last point is that when a city asset is leased, the city is forced to pay the education property tax portion of the tax as a levy compared to the value of the lease.

From 2000:
Quote:
Calgary aldermen say the Flames are an important city tenant and they're willing to at least listen to changes team owners will seek in their arena agreement.

As reported in Saturday's Herald, team owners are looking for an agreement similar to the Edmonton Oilers' deal with the Skyreach Centre, which Flames governor Harley Hotchkiss said is up to $5 million less a year than his team's agreement with the Saddledome.

Hotchkiss pointed out the Oilers benefit from $1.3 million in lottery funding, pay $200,000 less in provincial education tax and are not responsible for building operations.

Six years ago, the Flames demanded and received control of Saddledome operations, including maintenance and capital improvement in the arena, in return for all revenues from renting out the facilities.

That agreement lasts until 2014.

The Flames are now talking to the Saddledome Foundation, a non- profit group that acts as leaseholder for the city-owned facility, about changing their arrangement.

2001:
Quote:
The Saddledome Foundation stickhandled its way Monday into an annual $1.3 million in funding after convincing city council to transfer capital maintenance costs from the Calgary Flames to taxpayers.

But the deal didn't pass without heated discussion, with one alderman calling it a "bailout."

Changes to the licence and management agreement between the foundation and the team were approved 9-5 following hours of debate by aldermen and a passionate speech by Mayor Al Duerr, who pleaded with his colleagues to deal with the issue from a fiscal point of view -- not an emotional one.

The agreement doesn't guarantee the National Hockey League team will remain in Calgary. It passes the issue back to the province, which has turned down a matching $1.3 million request from the Saddledome Foundation to cover operational costs that were previously the responsibility of the Flames.

That request is over and above the $1 million the Alberta government pledged to the team last week as part of a lottery program, said a Flames official.

"It's not for me to say," Michael Holditch, Flames vice- president of finance, said when asked if the new lease agreement secures the hockey team's future in Calgary.

"That's not to say we're not grateful. This is an encouraging sign."

The foundation, which will need to have its capital budget approved annually, first asked the city last week to approve changes to the lease agreement and relieve the Flames of their capital maintenance responsibilities.

The money will help offset a $3.9-million deficit the team incurs on the building each year. An additional $1.3 million will come from a surcharge on hockey and other event tickets and it's hoped the rest will come from the province.

The foundation presented a report Monday showing the money will go this year to expenses such as roof repairs, wiring upgrades and stairwell restoration.

However, the report did not provide a breakdown of where the dollars will be spent over the next five years, a point that troubled at least one alderman.

"I said last week -- and I'll say it again today -- we're not being asked for $1.3 million, we're being asked for $6.5 million over a five-year program," said Ald. Dave Bronconnier, adding that, like any other business, it should be up to the Flames to deal with their financial problems on their own.

Bronconnier said he is tired of threats the Flames will leave town.

"I'll be damned if I'll sit here and be brow-beaten," added Ald. John Schmal.

"It's a bailout and all I hear is the threat if you don't cough up, we might leave," said Schmal, adding this opens the door for the city's other lease agreements, as well as additional requests by the foundation.

"The team can come back in another two years and ask for an adjustment, and any other business can now come forward and ask for compensation."

However, other aldermen, including Joanne Kerr, argued the city has an obligation to maintain the Saddledome like it does any other city-owned facility, including the convention centre and Performing Arts Centre. Kerr pointed out the millions of dollars the city spent on the Max Bell Arena after former Stampeders owner Larry Ryckman reneged on promises to make structural upgrades.

"This is not an attempt by the City of Calgary to bail out the Flames," said Kerr. "The Flames haven't asked us for a nickel."

She pointed out the city would lose $250,000 in tax revenues and the $750,000 the team puts back into amateur sport, while Stampede Park would lose thousands more in parking revenue if its largest Saddledome tenant is lost.

Yet another alderman argued the city has no legal recourse if the team pulls up stakes and breaks its lease.

City lawyers say a loophole in the original deal allows the Flames to break the contract without penalty because of changes the province made to the Municipal Government Act as it relates to the payment of education taxes.

The changes were made after the agreement was signed.

Saddledome Foundation chairman Rick Smith said Monday's decision sends a message to the Flames that Calgarians are grateful to have an NHL franchise and recognize the difficulties they experience in operating a team in this market.

"We (the city) own the building and I think it sends a message that we are interested in maintaining that building at a world- class level," said Smith, adding he's unsure whether the deal will keep the team in Calgary.

"This is just one piece to a big puzzle, and it's all we could do as custodians of the building. But certainly I think it does go a long way to show we as a city support having a major tenant in the building."

A clawback provision was also approved as part of the "temporary" changes to the lease agreement that will see 20 per cent of any profits from Saddledome operations given to the city.

The changes are also contingent on an Aug. 1 deadline on the conclusion of funding arrangements between the Flames and the province.

[Robbob]

Originally Posted by Flash Walken

that sounds like a bunch of bull to me, quite frankly.

I've heard the exact opposite.

...and that is the problem. This entire situation is something out of the US current events. There is so much crap going around that very few people I think know enough of what is going on. It has been a pretty heated debate where people are entrenched with so much rhetoric flying around.

[Lord Carnage]

Originally Posted by kermitology

Like I said it's in the tone: Hotchkiss was presenting a rational case, and doing so saying - look we don't want to move, so please prove to us you're willing to keep us here.

The Flames today want a building. The offers have been made, but there's no negotiation. The Flames have made it clear, give us what we want - we're not interested in talking. It's a take it or leave it approach. That's not the same. Hotchkiss asked for 5000 additional season ticket holders, and then needed to present a business case to the province and city for help.

Today - there's nothing going on.

That's not a fair assessment. We do know there was considerable negotiations on a new arena between CSEC and the city... the point we are at now is that the Flames have walked away from the table (thrown their hands in the air, given up, taken their ball and gone home, whatever someone wants to call it) as they believe the two sides are too far apart to continue negotiating.

[Parallex]

Originally Posted by Lord Carnage

That's not a fair assessment. We do know there was considerable negotiations on a new arena between CSEC and the city...

No, it was a fair assessment. The Flames last offer (the one they walk away from the table over) had the exact same funding ratio as their first one. They didn't move an inch on costing and then walked away when their demands weren't accepted.

I don't think it's at all unfair to characterize that as a "take it or leave it" approach.

[Flash Walken]

The idea of King and Nenshi sitting there at a table, shirt sleeves rolled up, beads of sweat pouring down their faces. Ashtrays full of cigarette butts, dried coffee rings dotting pages and pages of financial, architectural and environmental records. The room stagnant from 12 intense hours of blow by blow negotiation. A lone fan in the corner of the room casts a rotating shadow upon the two men. With a furry, they explode and nearly come to blows, all their hard fought for negotiation out the window. A deal within a hairs-breath of completion scuttled by two monstrous egos. A good deal torn asunder. If only it weren't for those monstrous egos!

It reads like bad movie.

[Erick Estrada]

Bad movie? Who doesn't love a great disaster movie?

[CliffFletcher]

It is a pretty hilarious narrative. Have Nenshi and King even been in a room together? This thing is being assessed and negotiated by dozens of people. It's not about personalities, its about money.