Arena negotiation discussion. UPD: Flames release their proposal

[longsuffering]

Originally Posted by Demzy84

If city was offering to just pay 1/3 of the cost with no strings attached, this arena deal would be done.

How can you possibly make this claim?

CSEC's 'final' offer demanded $225 million (no repayment) plus a practice facility plus a public celebration area plus indemnity from any provincial land taxes plus all parking revenues plus a share of casino revenues plus free transit for their patrons plus a beefed up CPS presence. They also want options on land in VicPark and possibly veto power over other area developments (had been mentioned).

And of course ALL revenues generated by the building.

Seems reasonable.

Sent from my Pixel XL using Tapatalk

[You Need a Thneed]

Originally Posted by Demzy84

Incorrect, the city is not putting 1/3 of the cost to the arena. The money the city is putting in will be paid back.

If city was offering to just pay 1/3 of the cost with no strings attached, this arena deal would be done.

The city has not requested that any of the money they put in be paid back.

It’s property tax payments, not loan repayments.

[GioforPM]

Originally Posted by You Need a Thneed

The city has not requested that any of the money they put in be paid back.

It’s property tax payments, not loan repayments.

The Flames would say "Property tax on land and building owned by the City."

Counter: OK, pay rent.

Counter: so it's a loan against future rent.

[You Need a Thneed]

Originally Posted by GioforPM

The Flames would say "Property tax on land and building owned by the City."

Counter: OK, pay rent.

Counter: so it's a loan against future rent.

The city has already said that they don’t care who owns the building, they can make both work.

If the Flames own the building, they pay (subsidized) property tax.

If the city “technically” owns the building, the Flames pay rent.

Either way, the value of the subsidy the Flames receive from the city essentially stays the same as it is now - in fact, it’s better, because it’s fronted, not spread out over 30 years.

What the Flames are asking for is the current subsidy to continue AND have the city put in hundreds of millions of dollars towards a new arena.

[PeteMoss]

Originally Posted by Demzy84

I agree. If someone paid $500M for an expansion team, whose not to say Fertitta (Texas born, has had a hand in all teams in Texas at some point) would offer to buy the Flames for ~$600M? Calgary ownership might see this (Make close to $200M based on team value in 2016) as a way to wash their hands of the team seeing as they aren't getting their new arena.

Then you have the Seattle SuperSonics drama all over again in Calgary. Houston owner wants new arena, him and city can't make it work, then he moves team to Houston and his home state (which is even easier since he owns the arena the team will play in)

Seattle I wasn't too concerned with, but with Fertitta's interest in getting an NHL team, the Flames playing in the oldest arena in the NHL and missing out on new revenue streams, could be a recipe for relocation in 5 years.

If you're an NHL owner of every non-Flames team - do you want
1) a $500 million expansion fee that you get 1/31st of
2) a team sold for more money, but you get 1/31st of the relocation fee which will be way less than $500 million (unless you think the Houston guy is going to pay $600m for the Flames and then $500m as a relocation fee - which he isn't)

Originally Posted by Table 5

At the next CBA negotiations, the NHL really needs to link its infrastructure costs to the salary cap. A $70 million cap is not realistic if your revenues can't support the very building you do business out of.

I'm no business surgeon, but if you can't afford rent, you can't afford to pay your employees an exorbitant salary.

We have no idea if they can or cannot pay rent. Or if they can or cannot pay for new arenas. If the players percentage was 20% the owners would still be begging for money from governments for new buildings. The players aren't asking for a new building - why should they take a big hit to pay for it.

[Jason14h]

Originally Posted by PeteMoss

If you're an NHL owner of every non-Flames team - do you want
1) a $500 million expansion fee that you get 1/31st of
2) a team sold for more money, but you get 1/31st of the relocation fee which will be way less than $500 million (unless you think the Houston guy is going to pay $600m for the Flames and then $500m as a relocation fee - which he isn't)



We have no idea if they can or cannot pay rent. Or if they can or cannot pay for new arenas. If the players percentage was 20% the owners would still be begging for money from governments for new buildings. The players aren't asking for a new building - why should they take a big hit to pay for it.

1. There is only 1 expansion fee / franchise left . If the Flames move you can still get that fee
2. Flames moving proves to every other owner the league isn't bluffing and will move a team of no new arena . That's worth 100"s of millions as we've seen in this battle

I think the Flames moving is very slim. BUT some of the arguments ignored the fact an NHL team is a limited quantity asset

[EldrickOnIce]

Originally Posted by PeteMoss

If you're an NHL owner of every non-Flames team - do you want
1) a $500 million expansion fee that you get 1/31st of
2) a team sold for more money, but you get 1/31st of the relocation fee which will be way less than $500 million (unless you think the Houston guy is going to pay $600m for the Flames and then $500m as a relocation fee - which he isn't)

An absolute no brainer.
Definitely 2, assuming it helps guarantee free government money when I need a new building. That 10M expansion fee (difference between relocation) is pocket change compared to a good chunk of 500M public funds for a new barn, because the threat of moving is real.



Unless the following hapoens

Originally Posted by PeteMoss

We have no idea if they can or cannot pay rent. Or if they can or cannot pay for new arenas. If the players percentage was 20% the owners would still be begging for money from governments for new buildings. The players aren't asking for a new building - why should they take a big hit to pay for it.

There is no simple can they or can they not pay answer. But as part of the significant rollback you now have a league mandate that no public funds are used in new arena construction, and you have public support on your side during the lockout (which is sure to follow that kind of rollback).

[Roughneck]

Originally Posted by Demzy84

Incorrect, the city is not putting 1/3 of the cost to the arena. The money the city is putting in will be paid back.

Is the money the Flames owners are putting in expected to be paid back?



If so, doesn't that mean they're not putting up any of the cost either?

[GioforPM]

Originally Posted by Roughneck

Is the money the Flames owners are putting in expected to be paid back?

No.

Unless you mean through profits from goods and services they sell inside the building.

[Roughneck]

Originally Posted by GioforPM

No.

Unless you mean through profits from goods and services they sell inside the building.

That'd be a yes, then.

[GioforPM]

Originally Posted by Roughneck

That'd be a yes, then.

No, that'd be a no. It's not an apt analogy.

[nik-]

Businesses invest in their business in order to be able to make more money.

Is that ever considering being paid back?

What a silly angle.

[GioforPM]

Originally Posted by nik-

Businesses invest in their business in order to be able to make more money.

Is that ever considering being paid back?

What a silly angle.

Exactly. If I sell something I'm not being "paid back". I'm being compensated for what I did.

Now, the City might argue it's being compensated and not being "paid back" by getting rent (or property tax imbedded in the rent). However, in that case, it's also not contributing capital. It is making an advance against future payment.

[nik-]

Which is prudent, they're a lender.

[kermitology]

The money goes into general revenue for the city, not specifically towards repaying the money given by the city.

Unless it goes specifically to the money given by the city and payments stop after that maximum, it’s not a loan.

Rent/property tax is just revenue.

[EldrickOnIce]

And round and round we go...
I guess we need GGG to post (for the 100th time in the thread) that the Flames do not currently pay property tax, so it essentially offers only up front money for a loan.
And round we go again.

[TurdFerguson]

Caught a pretty good segment on the CBC One - The Current on the way in to work that was talking about public arena financing with a big focus on Calgary and how the negotiations have played out here (tactics, election issue, NHL etc). Nothing really new but a good listen. I'm sure they will have on the website later in the day.

[GioforPM]

Originally Posted by kermitology

The money goes into general revenue for the city, not specifically towards repaying the money given by the city.

Unless it goes specifically to the money given by the city and payments stop after that maximum, it’s not a loan.

Rent/property tax is just revenue.

On a pure definitional basis, yes. But the advancing of the money up front is what makes it more like a loan, combined with the fact that there is no property tax/rent currently. Based on the present deal, it's a payment back.

Also, the City fronting the money and specifically getting in back in rent/tax is different than the owners getting "paid back" through net revenues after the building is done. The owners may or may not make money (they haven't in lots of years through the history of the team). Property tax/rent gets paid no matter what.

[Hot_Flatus]

Originally Posted by PeteMoss

If you're an NHL owner of every non-Flames team - do you want
1) a $500 million expansion fee that you get 1/31st of
2) a team sold for more money, but you get 1/31st of the relocation fee which will be way less than $500 million (unless you think the Houston guy is going to pay $600m for the Flames and then $500m as a relocation fee - which he isn't)

I get the feeling this Houston guy is probably a friend of Murray Edwards or Gary Bettman who has agreed to "step up" and apply pressure with no real interest in a team at all.

[stone hands]

Originally Posted by Enoch Root

I that unreasonable? Should STHers pay $50 per night, every game and event for 20 years, while everyone else pays nothing?

if thats the model the flames take, 100% yes

From this thread, i really dont think you grasp that some people genuinely do not care about hockey or the flames. this is a luxury entertainment item people like you and me voluntarily pay for to consume