Arena negotiation discussion. UPD: Flames release their proposal

[nik-]

Originally Posted by Flame On

You do realize that if the Flames magically didn't exist in our reality, that space is going to be developed anyway. The city wants the LRT Green line station, the 17th ave. extensions, the entertainment district, which probably means a new stadium, maybe the destruction of the Dome etc. etc.

In no world is public money not going to be spent.

With the Flames on the deal it should be mitigated for the city, not entirely but somewhat. But they are trying to tie all the costs of the project to the Flames and get the money back for it its crazy.

Why is it crazy? The Flames are getting all the revenue from the arena.

[Lanny_McDonald]

Originally Posted by Bingo

Yeah that had me curious too.

I thought the land was a swap with the Stampede board for the land under the Saddledome. That wouldn't be an expenditure if so.

Yet that gets muddied because of the olympic bid where the city has the Dome and the Corral still in use meaning they can't knock it down because the city needs to use it.

Either way not sure those two costs should be considered part of the city's contribution if the above is correct.

There's a lot of stuff in there that's a head scratcher. There are more than enough questions surrounding the City's offer that should be scrutinized a lot more than they are.

The City is including costs for things already on the books or unrelated to the project. This is fluffing the numbers. Not unexpected, but still something you don't want to see at this point in negotiations.

The City also tosses in there a property tax assessment. By that, they are saying the Flames own the building. The Flames have stated they don't want ownership of the building, for many reasons, including the property tax issue.

The City then goes on to say they would have access to the building for events during Stampede. Kind of strange thing to add when they don't own the building. I could see this being a major sticking point for the guys who "own" the building.

I can see why the City would like this deal. I can see why the fans would see this and immediately like it too. I can see why the Flames would not like this deal and be somewhat choked over it. Especially when you dig into the Edmonton deal and what the Katz Group got out of it.

Consider for a second that the Oilers got a building by putting up $26.5M, and have a long term lease (~$3.5M a year) that is less than the property taxes on the proposed Calgary building ($550M building with a standard non-residential mill rate of 0.0177445 comes out to $9.76M a year). The Flames have to put up almost seven times the money ($185M versus $26.5M), pay a larger surtax ($185M versus $125M), have to pay almost three times what the Oilers do for occupancy, and then have to give up the building for 10 days when the highest traffic volumes of visitors hit the city. What could possibly make the Flames walk away from the table?

I think there is still a possible deal here, even though the Flames are going to get roiled compared to what their provincial neighbors got. The Flames will have to get over this. I would propose the following.

Rule of Thirds Financing

City of Calgary pays $185M. Period. All other slushed costs outlined in their slide are on the City. Flames pay $185M. Period. Ticket Surcharge is $185M, and stays in place until that amount is recovered. City owns the building. Flames have exclusive use of the building and receive all revenues. City can recover their contribution through the imposition of a 1% entertainment tax, like they do in many of the US cities. This tax stays in place until that $185M is recovered. All revenues are recovered through use taxes and surcharges. Everyone gets what they want and what they need.

This is a win-win for everyone. City gets a recovery scheme for their investment. They also get a helluva deal on the "rent" the Flames are paying upfront in the tune of that $185M. If the City was forced to pay for the whole building, and then lease it out based on competitive rates ($3.5M per year in Edmonton) it would take the City 52.8 years to recoup that money. There is something in there for everyone to love, and something in there for everyone to hate.

[Par]

Originally Posted by Backlunds_socks

It does not matter who owns the Saddle Dome its demolition is required for the new Arena, so therefore its part of the cost of the Arena.

Even if the land needs to be redeveloped it carries a $30million value, that does not change.

The city collects property taxes anyways, thats how the city is funded, generally.

I really wish the idiots in Edmonton did not do the deal they did for their arena, now the Flames want a similar deal. What they can do with the property taxes is give the Flames a break on it. If you look at the deal as a whole it is a bad deal for the Flames.

[JFK]

Originally Posted by Bingo

Man what is it about arena talk that brings the absolute worst out of people? It's pretty ugly.

I have never had a problem with people having a different view than me, but I just shake my head at those that won't accept there in another side to things.

Come on guys, you're better than that.

Originally Posted by Bingo

You guys don't think they saw all this coming?

Back away from negotiations in a splashy way by walking the commissioner out (their biggest mistake in my mind) and then what? They expected a megalomaniac mayor to bite his tongue and not come out with details?

Nenshi loves to talk, they knew he's be shooting back in a variety of ways. King et al have been frustrated for months at the slow pace of the negotiations, this gets it right out in the open which had to have been their plan.

To each their own on what public money should be included but regardless of the landing point I think the CSEC wants to see this moving and not being snail paced through endless private meetings.

Thursday Bingo meet Friday Bingo

[Roughneck]

Originally Posted by New Era

ity can recover their contribution through the imposition of a 1% entertainment tax, like they do in many of the US cities. This tax stays in place until that $185M is recovered. All revenues are recovered through use taxes and surcharges. Everyone gets what they want and what they need.

Not a power Canadian cities have.

[Locke]

Originally Posted by Bingo

You guys don't think they saw all this coming?

Back away from negotiations in a splashy way by walking the commissioner out (their biggest mistake in my mind) and then what? They expected a megalomaniac mayor to bite his tongue and not come out with details?

Nenshi loves to talk, they knew he's be shooting back in a variety of ways. King et al have been frustrated for months at the slow pace of the negotiations, this gets it right out in the open which had to have been their plan.

To each their own on what public money should be included but regardless of the landing point I think the CSEC wants to see this moving and not being snail paced through endless private meetings.

I would say that even if they saw this coming they should likely have been aware of the fact that a looming Election was going to have a negative impact on the pace of negotiations.

Now it looks more like Political Grandstanding against what is a virtual slam-dunk Mayor.

[Backlunds_socks]

Originally Posted by Par

I really wish the idiots in Edmonton did not do the deal they did for their arena, now the Flames want a similar deal. What they can do with the property taxes is give the Flames a break on it. If you look at the deal as a whole it is a bad deal for the Flames.

How? Pay less then 100% of costs but keep 100% of revenue? How is that a bad deal?

[GGG]

Originally Posted by New Era

There's a lot of stuff in there that's a head scratcher. There are more than enough questions surrounding the City's offer that should be scrutinized a lot more than they are.

The City is including costs for things already on the books or unrelated to the project. This is fluffing the numbers. Not unexpected, but still something you don't want to see at this point in negotiations.

The City also tosses in there a property tax assessment. By that, they are saying the Flames own the building. The Flames have stated they don't want ownership of the building, for many reasons, including the property tax issue.

The City then goes on to say they would have access to the building for events during Stampede. Kind of strange thing to add when they don't own the building. I could see this being a major sticking point for the guys who "own" the building.

I can see why the City would like this deal. I can see why the fans would see this and immediately like it too. I can see why the Flames would not like this deal and be somewhat choked over it. Especially when you dig into the Edmonton deal and what the Katz Group got out of it.

Consider for a second that the Oilers got a building by putting up $26.5M, and have a long term lease (~$3.5M a year) that is less than the property taxes on the proposed Calgary building ($550M building with a standard non-residential mill rate of 0.0177445 comes out to $9.76M a year). The Flames have to put up almost seven times the money ($185M versus $26.5M), pay a larger surtax ($185M versus $125M), have to pay almost three times what the Oilers do for occupancy, and then have to give up the building for 10 days when the highest traffic volumes of visitors hit the city. What could possibly make the Flames walk away from the table?

I think there is still a possible deal here, even though the Flames are going to get roiled compared to what their provincial neighbors got. The Flames will have to get over this. I would propose the following.

Rule of Thirds Financing

City of Calgary pays $185M. Period. All other slushed costs outlined in their slide are on the City. Flames pay $185M. Period. Ticket Surcharge is $185M, and stays in place until that amount is recovered. City owns the building. Flames have exclusive use of the building and receive all revenues. City can recover their contribution through the imposition of a 1% entertainment tax, like they do in many of the US cities. This tax stays in place until that $185M is recovered. All revenues are recovered through use taxes and surcharges. Everyone gets what they want and what they need.

This is a win-win for everyone. City gets a recovery scheme for their investment. They also get a helluva deal on the "rent" the Flames are paying upfront in the tune of that $185M. If the City was forced to pay for the whole building, and then lease it out based on competitive rates ($3.5M per year in Edmonton) it would take the City 52.8 years to recoup that money. There is something in there for everyone to love, and something in there for everyone to hate.

That's a 200 million dollar tax subsidy and added 50 million in cash you just yadda yaddaed away and transferred to all Calgarians in a massive tax increase. If we are going to have a 1% sales tax there are a lot better items to spend it on than an arena. Not to mention that cities in Alberta can't impose a sales tax. There is no way that Calgary would accept a 1% sales tax to be tacked on. It would also further push business to parasite communities (Gas, groceries, shopping)

A quarter billion dollars is not close to the same deal.

Effectively you are back to 66% city 33% flames.

[Flame On]

Originally Posted by nik-

Why is it crazy? The Flames are getting all the revenue from the arena.

Well I guess disingenuous more than crazy.
They come out with a graphic pointing to all the cash they're prepared to contribute, when a substantial chunk of that cash is city costs they would have incurred in any eventuality.

[sureLoss]

King has called a press conference for 11:30 AM MT.

[Azure]

Lifetime free land rental, transportation development, infrastructure development plus the Flames get all revenues from the arena for ALL events including concerts, sporting events, etc.

Flames decide what the ticket surcharge will be based on expected revenues/usage of the arena.

City contributes nothing else and sure as hell no 'loan.'

How is that a bad deal?

[Lanny_McDonald]

Originally Posted by Roughneck

Not a power Canadian cities have.

Why is that? Municipalities are not allowed to institute their own taxes? Isn't that what a ticket surcharge would be considered? Wouldn't that be considered a use tax?

[corporatejay]

Originally Posted by New Era

There's a lot of stuff in there that's a head scratcher. There are more than enough questions surrounding the City's offer that should be scrutinized a lot more than they are.

The City is including costs for things already on the books or unrelated to the project. This is fluffing the numbers. Not unexpected, but still something you don't want to see at this point in negotiations.

The City also tosses in there a property tax assessment. By that, they are saying the Flames own the building. The Flames have stated they don't want ownership of the building, for many reasons, including the property tax issue.

The City then goes on to say they would have access to the building for events during Stampede. Kind of strange thing to add when they don't own the building. I could see this being a major sticking point for the guys who "own" the building.

I can see why the City would like this deal. I can see why the fans would see this and immediately like it too. I can see why the Flames would not like this deal and be somewhat choked over it. Especially when you dig into the Edmonton deal and what the Katz Group got out of it.

Consider for a second that the Oilers got a building by putting up $26.5M, and have a long term lease (~$3.5M a year) that is less than the property taxes on the proposed Calgary building ($550M building with a standard non-residential mill rate of 0.0177445 comes out to $9.76M a year). The Flames have to put up almost seven times the money ($185M versus $26.5M), pay a larger surtax ($185M versus $125M), have to pay almost three times what the Oilers do for occupancy, and then have to give up the building for 10 days when the highest traffic volumes of visitors hit the city. What could possibly make the Flames walk away from the table?

I think there is still a possible deal here, even though the Flames are going to get roiled compared to what their provincial neighbors got. The Flames will have to get over this. I would propose the following.

Rule of Thirds Financing

City of Calgary pays $185M. Period. All other slushed costs outlined in their slide are on the City. Flames pay $185M. Period. Ticket Surcharge is $185M, and stays in place until that amount is recovered. City owns the building. Flames have exclusive use of the building and receive all revenues. City can recover their contribution through the imposition of a 1% entertainment tax, like they do in many of the US cities. This tax stays in place until that $185M is recovered. All revenues are recovered through use taxes and surcharges. Everyone gets what they want and what they need.

This is a win-win for everyone. City gets a recovery scheme for their investment. They also get a helluva deal on the "rent" the Flames are paying upfront in the tune of that $185M. If the City was forced to pay for the whole building, and then lease it out based on competitive rates ($3.5M per year in Edmonton) it would take the City 52.8 years to recoup that money. There is something in there for everyone to love, and something in there for everyone to hate.

You are an incredible shill.

[Roughneck]

Originally Posted by New Era

Why is that? Municipalities are not allowed to institute their own taxes?

They can institute property taxes, not sales taxes. Not without the province's say so.

Just the way it is.

Isn't that what a ticket surcharge would be considered? Wouldn't that be considered a use tax?

Can't force a use tax onto all the other businesses in the city or an area. The arena/operator can charge whatever they want to use the building and a ticket surcharge tied to repaying a loan can be separated from HRR.

[Ozy_Flame]

Originally Posted by sureLoss

King has called a press conference for 11:30 AM MT.

This is turning into a bad drama playing out in public. Like a dysfunctional couple yelling at each other over money issues in a restaurant.

[Bingo]

Originally Posted by JFK

Thursday Bingo meet Friday Bingo

At least you've been consistent.

Sorry ... suggesting the mayor has an ego isn't insulting fellow posters on this site and name calling.

I've suggested both King and Nenshi have been terrible figure heads in this from the start, very consistent.

If you can't see the difference no version of Bingo can help you.

[Flame On]

Originally Posted by corporatejay

You are an incredible shill.

What a productive counter point you raise. You are an incredible drive-byer.

[Flash Walken]

Originally Posted by Ozy_Flame

This is turning into a bad drama playing out in public. Like a dysfunctional couple yelling at each other over money issues in a restaurant.

Reminds more of a parent/child relationship than a peer relationship

[djsFlames]

This had better not be more feet stomping / pouting or threats.

They should suck up their pride have their response today lead to something productive. Embarrassed enough for the organization already, don't need more drama queen tactics.

[Bingo]

Originally Posted by corporatejay

You are an incredible shill.

This is the stuff that I don't like.

Shill?

There are 1000s of pro city comments in this section, 1000s, are they city shills? The guy has a difference of opinion, let that stand on merit and discuss what you do or don't agree with.

Labeling him as a shill is the weakest form of argument existing.