Arena negotiation discussion. UPD: Flames release their proposal

[nik-]

Originally Posted by CampbellsTransgressions

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.

I guess he thinks being repaid via ticket tax doesn't count.

[djsFlames]

Originally Posted by sureLoss

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

Fair to who? The billionaires that have enough pocket change laying around for a few arenas?

In this economic climate, one party is at a pretty large advantage. And they're the ones poised to reap the benefits of the new arena for years to come, as it will also increase the value of the club.

52% from the city is steep. And one third from the city could be viewed as a touch lean as well. Somewhere in the middle is probably the what's actually "fair". And that includes the city slowly recouping some of that over a number of years. But these rich ass owners should be fronting at least half. They won't suffer either way, whether they pay half of the entire thing.

[SmoggyFlamesFan]

Best. Listing. Ever. https://www.kijiji.ca/v-art-collecti...ary/1297368979

[Bunk]

Fair ball. It's not a model or notion I'm that familiar with - but it has some surface appeal. Thanks for the insight.

More than anything just trying to inject some thought of innovation or creativity into a conversation that will need those involved to think outside entrenched positions.

Originally Posted by Kjesse

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.

[Bunk]

It will be interesting to see if the 1/3 public share is actually structured as a loan - with a term of repayment (which implies interest/no interest and a prescribed timeline). Or, if it's straight cash & an expectation of the facility paying property taxes (assuming a CSEC owned and operated facility) like any private commercial building does in the city.

That is a distinction with a difference.

[heep223]

Originally Posted by Kjesse

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.

The Flames entity is a partnership, not a corporation. Which is governed by an LPA and much more flexible than a corp. Limited partners in a situation that Bunk is describing could absolutely have their rights significantly restricted and agree to such, which would alleviate the issues you're presenting.

Edit: I am wrong about this. It is a corp now. Carry on.

[Fire]

50/50 Sounds fair to me. The city wants a new arena for international events but doesn't want to pay for any of it. If the Flames leave they will be paying 100% of a new arena with no major tenant.

[Bunk]

Originally Posted by Fire

50/50 Sounds fair to me. The city wants a new arena for international events but doesn't want to pay for any of it. If the Flames leave they will be paying 100% of a new arena with no major tenant.

Looks like that want to pay 1/3, as well as all supporting infrastructure to serve the arena.

[Fire]

Originally Posted by Bunk

Looks like that want to pay 1/3.

No, they want to give a loan for 1/3.

[Snuffleupagus]

I wonder how the Flames owners like the Detroit deal

-Private financing: $538.8 million
-Public financing: $324.1 million
-Previously captured taxes: $34.75 million
-Original public bonds: $250 million
-New public bonds: $34.5 million
-Estimated net closing costs and debt service new bonds: $4.85 million
-Project total cost: $862.9 million

http://www.crainsdetroit.com/article...-862-9-million

[Bunk]

Originally Posted by Fire

No, they want to give a loan for 1/3.

You know for certain it's a loan? Direct cash injection to help create a privately owned, tax producing building in perpetuity would not by any definition of the word be a loan.

[RM14]

Originally Posted by heep223

The Flames entity is a partnership, not a corporation. Which is governed by an LPA and much more flexible than a corp. Limited partners in a situation that Bunk is describing could absolutely have their rights significantly restricted and agree to such, which would alleviate the issues you're presenting.

It used to be a partnership. It is now a Corp. "CSEC", is Calgary Sports and Entertainment Corporation.

[heep223]

Originally Posted by RM14

It used to be a partnership. It is now a Corp. "CSEC", is Calgary Sports and Entertainment Corporation.

I stand corrected. Thx

[getbak]

Originally Posted by Fire

50/50 Sounds fair to me. The city wants a new arena for international events but doesn't want to pay for any of it. If the Flames leave they will be paying 100% of a new arena with no major tenant.

They would also be getting all the revenue from the events held in the arena, and would be collecting rent from the Hitmen and Roughnecks (assuming they'd stay in Calgary and play in the new building).


What's worse, 100% of the cost and 100% of the revenue, or 50% of the cost and 0% of the revenue?

[GGG]

I like how king somehow thinks cnext was 50/50. It was 850/400 plus no tax.

Per this article it appears the flames want 50/50 plus another 11 million per year in tax subsidy plus they don't address who will contribute land/infrastructure or if it's included in the price. (I bet it's the city)

So presuming land is included the flames offer as best I can tell is 300 million plus 8-11 million per year in tax breaks. At that price I am out.

Also funny King whining that the city is releasing its offer to embarrass him after he brought Gary in to try to Russia the Civic Election.

If Kings math is as good here as it was CNext the end result is likely 66/33 or worse.

[Remember1989]

Originally Posted by SmoggyFlamesFan

Best. Listing. Ever. https://www.kijiji.ca/v-art-collecti...ary/1297368979

Humour for dullards.

[Manhattanboy]

Originally Posted by heep223

I stand corrected. Thx

The Flames are a limited partnership. The LP owns CSEC.

[getbak]

Originally Posted by GGG

I like how king somehow thinks cnext was 50/50. It was 850/400 plus no tax.

Which included $200 million for a public-use field house that would be available for all but 10 or 11 days out of the year (and even then, with a Stamps night game, they promised the field house would be open most of the day).

The stand-alone arena will likely include a practice/community rink that will have some public hours, but it will be a significantly smaller piece of the overall project.

[Manhattanboy]

If Nenshi and/or certain councillors are defeated I wonder if CalgaryNEXT might be back on the table. Or when Jason Kenney becomes premier. Wow look at the time. I'll show myself out...

[RM14]

Originally Posted by Manhattanboy

The Flames are a limited partnership. The LP owns CSEC.

Now I stand corrected. Thx.

So the partnership created the Corp. And now the Corp is running the arena show?