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Old 09-13-2017, 12:57 PM   #1
sureLoss
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Default Arena negotiation discussion. UPD: Flames release their proposal

Since it likely will get buried in the other thread

Calgary arena deal scuttled over tax exemption, recouping city investment: Sources

http://www.metronews.ca/news/calgary...g-sources.html

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Sources have told Metro the latest deal on the table involved a 1/3, 1/3, 1/3 model, where the City of Calgary would provide 1/3 of the upfront cost for the new arena, 1/3 would be recouped through a ticket surcharge and 1/3 would come from the Calgary Flames ownership.

Early cost estimates for a new arena were $500 million, but those familiar with the situation said some city officials believed the final tab would be higher - in the range of $600 million.

Where talks broke down, according to sources, was in how the city might recoup its initial investment, either through property taxes or a revenue sharing model. It was hoped the city could get back its initial investment over the next 30 years through a lease or rental arrangement with the Flames.

Information provided to Metro indicated those were the areas the two sides couldn’t agree upon.

CSEC was apparently looking for property tax exemption and wouldn’t flex on models for the city to recoup its investment, including possible revenue sharing options.

News Update


Last edited by sureLoss; 09-15-2017 at 10:13 AM.
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Old 09-13-2017, 12:59 PM   #2
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Sounds like this was/is pretty close before things went public. Hopefully that means negotiations can resume and get concluded quickly after a little bit of a cooling off period.
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Old 09-13-2017, 01:00 PM   #3
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So the flames are basically shutting down the city because they want to get their money back? Get out of here
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Old 09-13-2017, 01:03 PM   #4
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That sounds perfectly reasonable. Whats the problem with that?
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Old 09-13-2017, 01:05 PM   #5
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has there been a comment from Nenshi/Council yet?
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Old 09-13-2017, 01:06 PM   #6
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Originally Posted by MacDaddy77 View Post
has there been a comment from Nenshi/Council yet?
They will be releasing info shortly...
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Old 09-13-2017, 01:08 PM   #7
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Nenshi is scrumming with the media right now
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Old 09-13-2017, 01:08 PM   #8
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So assuming a $200M City contribution, the City would need to recoup $6.66 million per year through some means.
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Old 09-13-2017, 01:09 PM   #9
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This reminds me of collective bargaining negotiations between Bettman and PA. Close but far.

I'm sure in the end this well get done. The threats are funny.
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Old 09-13-2017, 01:11 PM   #10
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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!"

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Old 09-13-2017, 01:13 PM   #11
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This is really embarrassing for the Flames tbh. They're coming off as the children in the room.
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Old 09-13-2017, 01:13 PM   #12
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I wonder if revenue sharing was scuttled because of how hockey related revenue is defined in the CBA vs how the City would view revenue. Even discounting non-hockey events and their revenue, this kind of exploration of revenue sharing might shed some unwanted light in how revenue in the NHL is accounted for.

Just thinking out loud.
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Old 09-13-2017, 01:13 PM   #13
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I am pretty sure that CSEC's position is that the city's contribution should be a CRL and paid back via the incremental property taxes for the this new entertainment district and not be paid back by CSEC.
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Old 09-13-2017, 01:14 PM   #14
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So CSEC wants the $200 million field house money from the CalgaryNext proposal that the city was going to pay for to go to the arena instead and not pay the city back - does that sum things up essentially?
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Old 09-13-2017, 01:17 PM   #15
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Quote:
Originally Posted by Locke View Post
"We want what we want and we want it now and we dont want to pay for it! We dont even want our fans AND OTHER TAXPAYERS WHO DON'T GIVE A F*** ABOUT THE SPORT to indirectly pay for it over time! It should be free!"

Fixed for You
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Old 09-13-2017, 01:17 PM   #16
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Quote:
Originally Posted by sureLoss View Post
I am pretty sure that CSEC's position is that the city's contribution should be a CRL and paid back via the incremental property taxes for the this new entertainment district and not be paid back by CSEC.
Just to add on here...using my financial wizardry skills:

The city has offered a loan $150-200m with full recoupment of costs. The value of what the city is proposing is worth between C$50-75m based on whether the size of the loan is $150-200m. That works out to a funding ratio of 11-12% based on an arena cost of $450-600m.

The CSEC has asked for 1/3 of arena cost with no recoupment, equating to $150-200m. So the flames are asking for a funding ratio of 33%.

The two sides are off by C$100-125m
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Old 09-13-2017, 01:17 PM   #17
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well they're closer than I thought they were

now it comes down to recouping the loan.

City wants tangible repayment somehow
CSEC says by building the building, businesses will come and create a new tax base, = repayment.

TBH I think CSEC is wrong and it's just 'displaced tax revenue', businesses moving from one area to another. But what do I know?



At least we're discussing a new arena, not CalgaryNEXT. Rather have them 150ish million apart, than the 1.*Billion we were discussing earlier....
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Old 09-13-2017, 01:18 PM   #18
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Quote:
Originally Posted by The Hendog View Post
So CSEC wants the $200 million field house money from the CalgaryNext proposal that the city was going to pay for to go to the arena instead and not pay the city back - does that sum things up essentially?
Except I think they want more than that $200M aaaaand they wont provide a Fieldhouse.

Something for nothing.

I'm actually surprised that the CSEC and the NDP dont get along, they share very similar views.
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Old 09-13-2017, 01:19 PM   #19
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CSEC:

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Old 09-13-2017, 01:26 PM   #20
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Shawn Logan‏Verified account @ShawnLogan403
Mayor @nenshi expressed puzzlement over Flames ditching arena quest. Says he'll release deets of both sides' proposals in days ahead #yyccc

Shawn Logan‏Verified account @ShawnLogan403
As far as @nenshi was concerned, he feels negotiations hadn't reached an impasse and were still ongoing.

Shawn Logan‏Verified account @ShawnLogan403
Arena price tag proposed to be about $550 million. Cost break down loosely split a third apiece for city/owners/ticket surcharge #yyccc
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