Total cost: The final tab is almost $614 million which includes the arena, the land, a massive glass “Winter Garden” that stretches over the street in front, a community rink attached to the building and a connection to the city’s light-rail transit system.
Taxpayers: The city is paying almost $313 million with much of that coming from a so-called community revitalization levy, which will see a portion of downtown property taxes redirected to the project. The city will own the building, but will lease it back to the Oilers and the team’s owner, Daryl Katz.
The team: The team is paying $166 million. Some of that is in cash, but most of it comes from rent payments to the city. The team will retain all the revenue from the operation of the building. Katz, in turn, has promised to keep the Oilers in Edmonton for at least the next 35 years
Fans: Each person attending an event will have to pay a ticket surcharge. The deal calls for the proceeds to go to the city and be sufficient to cover the principal and interest payments, repaying $125 million over a 35-year term.
See....this is what people hate about Sports Arena deals.
They want everything for nothing.
A repayment of initial investment over 30 years? Over the context of overall operations that is completely insignificant.
If this is true I'm really disappointed in CSEC.
"We want what we want and we want it now and we dont want to pay for it! We dont even want our fans to indirectly pay for it over time! It should be free!"
Why would CSEC go for repaying the 1/3 to city? They can go get a loan for that 1/3 in a heart beat and then own the whole damn thing.
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"Fun must be always!" - Tomas Hertl
I'm never going to try and convince anyone on a funding model, I think people make valid points on rich owners, and public use, and the like. I get it.
However I do see the logic in the ownership group starting with the Edmonton model. I'd do the same it's logical.
Things are a bit more muddied in the Calgary situation as well because of a few elements.
1. Nenshi said he wants the Flames downtown in his presser today. That suggests city gains in my mind.
2. He talked about the arena in his vision of East Village, which also says city gain to me.
3. The group taxed with coming up with the olympic bid analysis had a new arena as a principal piece in the bid, and went further to talk about cost savings for security in having the old and new building close together.
So this isn't just an NHL issue and with that I see city having to kick in more than if this building was going next door to Cross Iron Mills without the olympics on the horizon.
Now go ahead and rip me one!
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If I never attend a Flames game, what would it cost me as a taxpayer?
The city has an operating budget of $3.5 billion/year right now. From what I can tell, 20% of the budget is received in the form of residential property taxes ($700 million). So, if assuming that the only money used to repay the city's involvement comes from property taxes, what's my added expense to float a new arena.
These are really simplified calculations, but hypothetically if the total investment and carrying costs is $400 million over 25 years, that means $16 million per year needs to be raised from property taxes. $16m/$700m (with no inflation) is about a 2.3% increase over that time frame. For me, that's about $40/year and I'm paying $1,000 over 25 years.
Is having a new arena worth that amount to individual taxpayers? It seems reasonable. $40 per year is definitely a lot cheaper than having to travel some place to watch NHL hockey or attend a concert that won't come here.
If you had a referendum asking everyone if they'd be willing to pay a $50 fee once a year that would go getting the Flames a new arena every thirty years, would it pass? Even in a good hockey market like Calgary, I have to think that at least half the people never watch a game in person or TV in a year. You'd have a hard time convincing that group to pay that fee. I'd expect the half that are at least moderate Flames fans would be somewhat split into wanting to help ensure they stay, and thinking these billionaire owners/millionaire players should not get our subsidies.
I'd guess it wouldn't come close to passing. Nor would a 2.3% increase in property taxes to pay it.
Has anyone floated the idea of some sort of bond issue to fund a portion of the cost to interested fans/investors with things attached like seat rights, ROFR's etc. to all events?
Has anyone floated the idea of some sort of bond issue to fund a portion of the cost to interested fans/investors with things attached like seat rights, ROFR's etc. to all events?
I believe municipal bonds are not a thing in Canada
If the figures in this thread are accurate, I'm struggling to understand Ken King's demeanour yesterday. The gap isn't big, certainly not insurmountable.
, Katz is paying $132.5-million in rent over 35 years($19.7-million up front) for a $483.5-million arena.
