Should Calgary Bid on the 2026 Olympics

[Joborule]

Originally Posted by Erick Estrada

The benefit is that it's a new facility for the ground up built to today's standards and conveniences as opposed to the 1960's standards McMahon was built to. If the city spends $135 renovating how many years are they going to get out of extending the life of this old dinosaur vs a new facility? There's a long term big picture here in that you can pay now to get a new stadium or pay now to renovate and pay again to build a new one down the road. The city has got over 50 years out of this old stadium as it's served its purpose well but it's simply poor management of taxpayer to continue to invest in such an old structure.

The $135M figure has the roof accounting for 1/3 of the cost, and I honestly don't see the need for a roof at all, especially at that price. So this is a price difference of ~$90M for full renovation (without roof) vs. $150-250M for a new stadium.

We see Regina, Winnipeg, and Hamilton get brand new CFL stadiums, and we want the same thing, which would be nice, but we're not in the same boat as those cities were when it comes to this. There's a competing interest in a new hockey arena, which takes higher priority in this city since Flames are a more popular team, from the premier league in it's sport, and it's an entertainment complex as a whole since the intention is to draw in more non-sporting events as well. Not to mention that the city is also committing to getting a fieldhouse built that's been on the backburner forever.

There's a lot of money that the city may have to invest here as it is, that they may not have the appetite to put in a fair chunk of change into a brand new football stadium that'll likely not really change anything from McMahon aside from simply being a brand new home for at least 10 Stamps games a season. And CSEC is sure as hell not going to be forking over the majority share in the costs themselves either. There's a reason they wanted the city to pay for all of the fieldhouse in the CalgaryNEXT proposal; they don't want to put much, if any money into a football stadium since they don't see the value/ROI in it.

And getting funding from the province and/or federally is not gonna happen. So I don't see there being any financial interest from anyone to invest the money that would be needed into a brand new football stadium. In the cities that are similar to Calgary in having NHL teams themselves, Vancouver, Edmonton, and Toronto all took the approach of renovating their stadiums that were present, rather than build a new one for the CFL team. So when Calgary needs to put money into a new arena, plus fieldhouse, I think the cheaper option for dealing with the football venue is the only option at this point.

This is why at least with the Olympics, you can get other levels of funding outside of just the city and CSEC to chip in, and it can allow to get things that need money, to get the funding, all at once. If the Olympics were to go forth, it's most likely that funding from all levels of government would go towards McMahon renovation, and CSEC would get what they want - a better football stadium without having to pay for it (or little if so), along with a new arena that should have the process pushed moreso. It's also an opportunity for the city to get funding for projects that have been hard to comeby such as the Fieldhouse and Olympic Oval renovations, since you want to do as much as you can all at once while the pocketbooks are open. Without the Olympics, and funding is more challenging. So things are gonna be the same at McMahon for quite some time still if the plebiscite fails.

[Bunk]

Some useful context to the bus barns leak from Councillor Keating (thread):

He argues they cherry picked information in a way that was misleading. And if they were trying for transparency, rather than to manipulate and support a narrative, they would have leaked the whole thing, which tells a different story.

https://twitter.com/CouncillorKeats/...76313742708736

[GordonBlue]

Originally Posted by DiracSpike

My problem with 5.2B though is a lot of it is spent on externalities like security and operating costs, it doesn't really leave us with anything permanent. I'm a bit dubious on the capital efficiency of the Olympics, it doesn't seem like it compares with just investing the money in infrastructure straight up, even with Ottawa and Edmonton chipping in.

my problem with the 5.2B is when people in their arguments take it as the final all in cost.
has an Olympics, or any sporting event of similar size ever been on budget?

is it clear who pays for cost overruns? the IOC won't. the sponsors won't.
so I'm wondering if all levels of government split the overspend or does it all fall to Calgary? the answer to that might sway the votes of some people on the fence.

[DiracSpike]

Originally Posted by GordonBlue

my problem with the 5.2B is when people in their arguments take it as the final all in cost.
has an Olympics, or any sporting event of similar size ever been on budget?

is it clear who pays for cost overruns? the IOC won't. the sponsors won't.
so I'm wondering if all levels of government split the overspend or does it all fall to Calgary? the answer to that might sway the votes of some people on the fence.

Definitely a major consideration as well. I'm hoping to hear from the bidco on this before the plebiscite because if (when) there a cost overruns I'd bet we as city of Calgary taxpayers will be on the hook for it.

[Senator Clay Davis]

No need to bet the city covers any overruns, it's a guarantee. Feds and Province never would (especially considering their existing budget issues), and the IOC, well, that's a rather hilarious thought. But if the IOC really wants to prove things are different, that'd be a pretty good place to start (or have the IOC cover security would also be wonderful).

[Parallex]

Originally Posted by GordonBlue

is it clear who pays for cost overruns? the IOC won't. the sponsors won't. so I'm wondering if all levels of government split the overspend or does it all fall to Calgary?

The Feds letter (IIRC) spelled out their financial commitment in percentages it was no more then 50% of the public costs and no more then 35% of the total cost. So the Feds are out in terms of covering any cost overruns unless they can squirrel up more IOC/Sponsership $$.

I dunno about the Province. It's 8 years away and it's a fools errand to try and imagine what a provincial government will have the appetite for 8 years hence.

[Senator Clay Davis]

Since a new/renovated stadium is under discussion, the province of Manitoba has now written off almost the entire stadium debt, because of course stadiums and arena's are definitely financial winners (like the Olympics...)

The Manitoba government is writing off the second of two loan segments that helped finance a new stadium for the Winnipeg Blue Bombers of the Canadian Football League.

Premier Brian Pallister said Wednesday there is no reasonable chance that the Bombers and others in the consortium that owns Investors Group Field can repay the $82 million.

"Despite the best efforts of the team on the field last year, where they profited to the tune ... of over $2 million, that wouldn't even come halfway towards the obligations the [former NDP government] set up for them," Pallister said.

The province has already written off another $118-million loan portion that helped get the stadium built in 2013.

Finance Minister Scott Fielding said the new loan writeoff will affect the final deficit figure for the last fiscal year, which is to be revealed later this week.

Investors Group Field has faced challenges since the beginning. There were cost overruns and repairs needed soon after it opened. Commercial development on the old stadium site, which was to help pay for the new facility, stalled.

The Bombers were given a break on loan interest until this year, and the interest payments at current rates would work out to an extra $4 million in annual costs for a facility that hosts 10 regular season games each year and a handful of other events such as concerts.

https://www.cbc.ca/news/canada/manit...839478?cmp=rss

[craigwd]

Originally Posted by Northendzone

Here is a curveball - what happens if the city moves ahead with the games, and then in 2022 there is a terroist attack at the games - the security costs would increase massively, but then it is too late to back out.

On the same point what if the 2020 Tokyo security tech works so well that the 2026 bill comes in well below $600M?

During the bid presentations Moran gave the example that the G7 summit pricetag in La Malbaie was lower than the cost to hold it in Kananaskis 16 years earlier.

[Table 5]

Maybe we should just wing it with security. Spend some money on propaganda to make everyone believe everything will be top notch, then go bare bones with the actual security. Hand out some police uniforms to existing volunteers, free whistles for everyone, and hire a few mall cops, park rangers, and seniors with flashlights to round things out.

Security is mostly about perception anyway. If they brits could fool the germans with cardboard tanks in WW2, surely we could fool a few terrorists.

[GaiJin]

Originally Posted by Table 5

Maybe we should just wing it with security. Spend some money on propaganda to make everyone believe everything will be top notch, then go bare bones with the actual security. Hand out some police uniforms to existing volunteers, free whistles for everyone, and hire a few mall cops, park rangers, and seniors with flashlights to round things out.

Security is mostly about perception anyway. If they brits could fool the germans with cardboard tanks in WW2, surely we could fool a few terrorists.

And that'd be a departure from security in this country now?

[sureLoss]

https://www.cbc.ca/news/canada/calga...isks-1.4848251

A document obtained by CBC News reveals some of the details of the financial risks that Calgary would face if its 2026 Olympic bid were to succeed.

Among the key risks: Olympic revenue projections assume NHL players will be on the ice.

The details were presented to city council at a closed door meeting on Sept. 11 but the document was withheld by the city.

Revenue projections
The report states these risks need to be closely monitored and potential mitigation strategies should be developed.

The key risks include the assumption that:

NHL players will participate in the 2026 Games.
Increased domestic partnership revenues will materialize under deals currently being negotiated with the International Olympic Committee (IOC).
Mitigation of foreign exchange risk, as IOC contributions are in U.S. dollars.
Broadcast revenues materialize as planned.
Ticket sales materialize as planned.


Expense projections
The key risks identified in the report include these assumptions:

The incorporation of the IOC New Norms resulting in cost savings.
Learnings from Vancouver Olympics producing efficiencies in venue management.
Technology needs being met within budget.
Certain discretionary expenses like ceremonies and a torch relay staying within budget.


Capital budget projections
The report states close monitoring and mitigation strategies are needed in the following areas:

Venue finalization.
Design work and cost estimates must be reasonable and include contingencies.
Athletes' village delivery as schedule and cost estimates may be impacted by complexities in preparing the site.
Housing demand materializing as planning for the market housing sites.
Inflation being realized at amounts higher than that included in the budgets.
Overall project management and procurement being implemented soon after a successful bid.


Guarantees
The report says the city is evaluating the financial impact of the required guarantees and that there are four ways to mitigate the risks:

Negotiate the wording to make the guarantees acceptable to the city.
Obtain insurance to mitigate the potential financial risks.
Assign the risk to another party through negotiation.
Utilize active management to contain the risks associated with cost overruns.


Contingencies and inflation adjustments
The report suggests strong capital program management is needed once the Games are awarded, "Additional insurance can also be explored to cover cost escalation or cost overruns resulting from extraordinary conditions."

[Senator Clay Davis]

Yeah this has debacle written all over it. Unless you can get the IOC to guarantee any overruns/revenue shortfalls (LOL at that), this is 95% likely to be a financial loser, with a good 35% chance of being a total catastrophe.

[GordonBlue]

surprised there was nothing about security costs. you'd that that would be a risk in the expense projection.

also to note

"Administration added information that states that "the athletes' village is not required to be in Victoria Park" and that further analysis is needed on the location and other locations should be explored."

[RM14]

Will Trinity Hills become a Calgary Alpine village?

[cam_wmh]

Anyone at the Calgary Economic Outlook today? A quote today relating to Calgary's 30% commercial real estate vacancy; dramatic, but effective -- same vacancy rate as Manhattan during the great depression.

My questions of the bid committee, and more so the health of this city.What are the forecasted property tax increases, both with and without the Olympics? (all things equal -- no pipeline etc; )
They're preparing the financial report for later this month, with just 2 weeks for the public to review in time for the plebiscite.

[Northendzone]

personally i think it is really cool that there is a social media campaign on both facebook and instagram from yesyyc (or something like that), while we still are not allowed to see the details.

for the purposes of my observation, i am assuming that yesyyc (or whomever is running the campaign) is connected with the official city bid folks.

[The Hendog]

Originally Posted by cam_wmh

Anyone at the Calgary Economic Outlook today? A quote today relating to Calgary's 30% commercial real estate vacancy; dramatic, but effective -- same vacancy rate as Manhattan during the great depression.

My questions of the bid committee, and more so the health of this city.What are the forecasted property tax increases, both with and without the Olympics? (all things equal -- no pipeline etc; )
They're preparing the financial report for later this month, with just 2 weeks for the public to review in time for the plebiscite.

I was there and work downtown, with 1 in 4 buildings downtown empty, that is a lot of missing property tax revenues for the city and Nenshi seemed genuinely worried about this - probable because the city has overspent on long-term capital project like the library and this is a double whammy for the city now.

This financial report could be pretty ugly and would also be pretty tough to forecast when you think vacancy rates would improve and help cash inflows at the city. At least Nenshi acknowledged you can't raise residential property tax rates forever but won't believe it until I see it.

The three speakers that touched on the Olympic bid (Nenshi, Steve Allen Calgary Ecomonic Development & Mary Moran CEO Calgary Bid) all sang the same tune of this being a "refurbished" Olympics and that would help keep costs under control etc. They echoed the biggest cost would be housing that would then add low income housing to the city after the games were over. This low income housing, in my opinion, is the only long-term benefit for the city from the games but is adding this low income house really worth the entire costs of hosting the Olympics?

Todd Hirsh did have an interesting take though when asked about the Olympics. Essentially Todd said he thinks Canadians value and enjoy the winter Olympics and because there is a physical limit on what cities can host the winter Olympics, Calgary and other viable cities have to take turns hosting or there might not be a winter Olympics. He thinks this would be regrettable for Canada as a country and for our people and I tend to agree.

Most of my colleagues that I talked with after all seem to agree if there is no new rink for the Flames associated with the bid = no to the Olympics. The plebiscite's results should be interesting and everyone should go vote!

[OMG!WTF!]

I was there and work downtown, with 1 in 4 buildings downtown empty, that is a lot of missing property tax revenues for the city and Nenshi seemed genuinely worried about this

Kind of a sidebar but wouldn't the city still be getting property tax from these empty spaces? They're still owned and operated as property. Is it the business tax we're missing?

[Parallex]

Originally Posted by OMG!WTF!

Kind of a sidebar but wouldn't the city still be getting property tax from these empty spaces?

Yes... but the high vacancy rate affects the assessed value no? So it's not that there isn't an owner to pay property tax but that the assessed value (and consequently the amount of tax gleaned from) is lower. If your building had an assessed value of say $10M but as a result of lower demand/over-supply the value drops to $6M... that's $4M dollars that the city won't be collecting tax on.

[The Hendog]

Originally Posted by OMG!WTF!

Kind of a sidebar but wouldn't the city still be getting property tax from these empty spaces? They're still owned and operated as property. Is it the business tax we're missing?

Sorry you are right business tax for now but soon to be non-residential property tax. Per the the City of Calgary's website "The City is phasing out the business tax through a gradual transfer of the business tax revenues to the non-residential property tax. Each year, business tax bills will go down and non-residential property taxes will increase. The business tax will be eliminated in 2019." As Nenshi was talking about the 4 year financial report perhaps this is why he refereed to them as property taxes and not business tax.