Arena negotiation discussion. UPD: Flames release their proposal

[Bingo]

Originally Posted by Bunk

He said "1/3, 1/3, 1/3 as reported is the basis, but there's a lot more to it than that".

Why don't we all just actually wait and see what the details of it, before we start calling things "big fat lies"?

Hey Bunk

Do private companies have to sign confidentiality agreements to negotiate/do business with the city?

[CorsiHockeyLeague]

Based on the present value of what is basically an interest free loan, the City's portion of the offer is worth somewhere around $75M. Which is actually closer to 1/7th.

[Barnes]

Originally Posted by Bingo

Hey Bunk

Do private companies have to sign confidentiality agreements to negotiate/do business with the city?

I was asking myself the same thing. Or rather, is Ken King dumb enough to try and pull this off without an NDA?

[Bunk]

Originally Posted by Bingo

Hey Bunk

Do private companies have to sign confidentiality agreements to negotiate/do business with the city?

In this kind of thing, very likely yes. In the Mayor's video he made last week he didn't touch on any of the financial details of a negotiation, because it would have run afoul of that agreement.

I'd imagine by the statement King/Bettman made, it ends the confidentiality agreement, and that's why Council voted today to allow the City to release the details of proposed financial details.

[Knut]

Originally Posted by GreenLantern2814

How are you arriving at 1/9th? I'm a history grad, math isn't my thing.

The city portion to the Flames is no interest loan. So essentially the City would be paying the interest. Which works out to approximately 1/9 of the cost

[EldrickOnIce]

Originally Posted by Regorium

I don't get your math. I get that you're trying to make Nenshi look as bad as possible, but I just don't see how you're doing it.

You're saying that only the financing portion is the part that's being given by the City. Using the same math, how much are the Flames putting in?

If the City is putting in 1/9th of the cost, as you suggest, who is putting in the other 8/9ths?

I am trying to make Nenshi look bad?

I'm saying be accurate.

I don't know if 1/9 is accurate. Whatever the interest cost is on 30 year loan is accurate.

My dad paid half the cost of the first vehicle I bought, after I saved the first half. I repaid the other half over the next two years. I could ask him, but I don't think he'd spin it as saying he paif half of that '78 Ford half ton.

[Locke]

Originally Posted by GullFoss

If there was no ticket tax, the flames would simply charge higher ticket prices. So, the ticket tax is being fully funded by the flames.

Also, its is misconception that the city is putting up the initial funding for a ticket tax. The way a ticket tax works is that the flames take out a loan for 1/3 of the arena cost ($200m). And the ticket tax funds the interest on that loan and the principal repayment over a 30 year period.

The flames might ask the city to guarantee the loan so the flames get a lower interest rate, but the flames are the ones paying the interest and repaying the principal

This is the 'Merry-Go-Round.'

The Flames take out a loan do they? From whom? Let me guess...it rhymes with 'the City of Galgary?'

Not a town in Scotland.

[transplant99]

Originally Posted by EldrickOnIce

I have no problem with that. Then call it what it is... an interest free 30 year loan. Don't say you are paying for 1/3 of the project.

One plays much better to the electorate than the other is my guess.

Im so confused on this stuff, but from what i understand it appears that the city EVENTUALLY wants the entire thing paid for by the CSEC.

Which is fine, but just say it as such.

[Bunk]

Originally Posted by Hes

The city portion to the Flames is no interest loan. So essentially the City would be paying the interest. Which works out to approximately 1/9 of the cost

It all depends on the source of the repayment. If it's a district's property tax earmarked to repayment (CRL) it's very much a public contribution, because its citizens tax dollars being earmarked. That's how the East Village worked, but no one would argue that's not a "publicly funded" or maybe more accurately "publicly financed" deal. There's opportunity cost to such an earmarking, financing, debt capacity.

I guess in the end, what would be wrong with a public financing deal like this? Seems to be good for the City, because there's a source of repayment, it seems good for the flames, because it gives them capital up front enabling a project which presumably has financial upside for them. Throw in all the other things the City wants to fund in Victoria Park and that seems a win-win-win.

[Bingo]

Originally Posted by Bunk

In this kind of thing, very likely yes. In the Mayor's video he made last week he didn't touch on any of the financial details of a negotiation, because it would have run afoul of that agreement.

I'd imagine by the statement King/Bettman made, it ends the confidentiality agreement, and that's why Council voted today to allow the City to release the details of proposed financial details.

Made me wonder if this was the plan all along.

The CSEC can't take it public but the city can. They take the negotiation off line and then Nenshi releases the details to the public at large.

Good way to avoid breaking the NDA agreement themselves and get the process moving.

[Backlunds_socks]

Originally Posted by Locke

This is the 'Merry-Go-Round.'

The Flames take out a loan do they? From whom? Let me guess...it rhymes with 'the City of Galgary?'

Not a town in Scotland.

Thanks Locke, I honestly believe you are hitting the nail on the head - CSEC wants a free apparatus to generate revenue.

[Flash Walken]

Originally Posted by EldrickOnIce

I am trying to make Nenshi look bad?

I'm saying be accurate.

I don't know if 1/9 is accurate. Whatever the interest cost is on 30 year loan is accurate.

My dad paid half the cost of the first vehicle I bought, after I saved the first half. I repaid the other half over the next two years. I could ask him, but I don't think he'd spin it as saying he paif half of that '78 Ford half ton.

Part if the one third could be infrastructure investment on the part of the city.

75 million as interest free loan on a 30 year term and 100 million in city infrastructure like roads, sewage, utilities etc.

An interest free loan and a free LRT terminal.

[Flame On]

I'm so dumb on these things.
If the flames are offering 1/3, and through a ticket tax another 1/3 and will get a loan from the city of 1/3, but have to pay it back, how is that not the Flames paying all the amount and the city eventually having paid nothing?

[Geeoff]

This whole thing has really put a damper on my excitement for the season 😕

[Hack&Lube]

Originally Posted by Locke

Sure. Show me the component that benefits the public.

I'm absolutely on the side of the city and taxpayers on this but for a smaller scale example:

The $14 million overpass across MacLeod Trail to Chinook mall was funded 50% by Cadillac Fairview and 50% by the City of Calgary (and taxpayers). I'm not aware of any arrangement for any sort of payback. There's obviously benefit to the city (fix pedestrian crossing issues across MacLeod) and a commercial benefit to the mall (funnel warm bodies directly into the food court).

Having a new arena facility and the resulting effect of redevelopment in the area does provide some tangible public benefit even if you remove the NHL games component.

[Firebot]

The city isn't paying 1/3 of the costs if the city is treating it as a loan. That's like saying the bank is paying 80% of the cost of your house.

Call a spade a spade.

[Bring_Back_Shantz]

Originally Posted by EldrickOnIce

And if that's their offer, so be it. I'm not saying it should be 1/3 or any amount.
But for Nenshi to say city offered to pay 1/3 of the cost is disingenuous at least, and more accurately a big fat lie.

Are you saying that the city saying it's offer to pay 1/3 is disingenuous because the city wants to recoup it's cost?

Because if that's the case then you need to apply the same logic to the Flames.
They are going to recoup their costs too right? So they aren't paying anywhere near 2/3 or even 90%.

If the criteria for "Paying" is that you don't get any of your money back, then neither side is being very genuine with what they are proposing to pay.

[transplant99]

Originally Posted by Flame On

I'm so dumb on these things.
If the flames are offering 1/3, and through a ticket tax another 1/3 and will get a loan from the city of 1/3, but have to pay it back, how is that not the Flames paying all the amount and the city eventually having paid nothing?

Yeah that's how I am understanding it as well.

Again, that's fine but just label it that way.

[longsuffering]

Originally Posted by EldrickOnIce

And if that's their offer, so be it. I'm not saying it should be 1/3 or any amount.
But for Nenshi to say city offered to pay 1/3 of the cost is disingenuous at least, and more accurately a big fat lie.

How is it any different from the Flames ownership claiming to fund $200 million? They intend to recoup their investment don't they?

[topfiverecords]

Originally Posted by Flame On

I'm so dumb on these things.
If the flames are offering 1/3, and through a ticket tax another 1/3 and will get a loan from the city of 1/3, but have to pay it back, how is that not the Flames paying all the amount and the city eventually having paid nothing?

Well, the Flames are the ones receiving profits from the building. We could reverse it. How about the City runs the building and earns the profit and pays CSEC their 1/3 back over 30 years.