[News Roundup] CSEC/City arena deal UPDATED: Third Party Facilitator

[powderjunkie]

Originally Posted by jayswin

If you're the Flames? Maybe strike any number of good deals in the last 15 ****ing years instead of trying to hardball into the ultimate deal?

This really undermines any argument that there is now urgency.

Originally Posted by Jordan!

The Coyotes are heading to Texas if they move. Zero chance Quebec City gets a team. Team owners want no part of a no growth location.

I have heard there are 3 U.S. locations the NHL is considering before any Canadian option

Oh...you're serious?

It's pretty clear the NHL/owners will tolerate a no-growth scenario if it aligns with broader goals (or if doing otherwise would interfere with those goals).

Market demographics are a bit less important than:
- how much a prospective owner is willing to pay (including relo fee)
- who that owner is (nice try, Mr. Balsillie)
- impact to wider league revenues (TV*, sponsorships/partnerships, etc.)

* we know which TV deals are next...both English and French rights for Canada. I doubt QC would significantly move the needle on either of these deals, but it would certainly be a consideration.


I'll also just leave this here:
https://venuesnow.com/ovg-to-partner...adian-project/

Hamilton pumping $500M into the Coliseum area, including a $50M reno to Copps involving Oak View Group. Probably no immediate relevance to the NHL (aside from a future World Cup venue), but there are some interesting puzzle pieces that could eventually start to fit together for a second team in GTA.

[DJones]

Originally Posted by Strange Brew

Is this true? Hotels, mixed use, stadiums, concert venues...

I feel like most large scale projects have a significant "entertainment" or leisure component, no?

Stadiums and concert venues are rare compared to infrastructure is what I am saying.

Only other Arena for the NHL even proposed right now is Arizona which is a mess.

[The Fisher Account]

Originally Posted by Flames1217

At some point in time Quebec will get a team back just depends on when Bettman steps down.

QC will never get an NHL team.

They are a minor league city with a great arena. The economics, language and realities of NHL in the 21st century are factors that they will never overcome.

[powderjunkie]

https://livewirecalgary.com/2022/05/...calgary-arena/

3rd parties announced. Not in the Oak View Group realm as many imagined, but just some guys to 'help' negotiations...seems like it might just be guys who can help CSEC exploit the real-estate side of things.

[Hack&Lube]

Originally Posted by powderjunkie

https://livewirecalgary.com/2022/05/...calgary-arena/

3rd parties announced. Not in the Oak View Group realm as many imagined, but just some guys to 'help' negotiations...seems like it might just be guys who can help CSEC exploit the real-estate side of things.

I heard on the radio that a lot of this is because of bad blood in negotiations between CSEC and Council. They don't see eye to eye and there are too many negative feelings for them to work together so this third party is supposed to help facilitate.

[Locke]

Originally Posted by Hack&Lube

I heard on the radio that a lot of this is because of bad blood in negotiations between CSEC and Council. They don't see eye too eye and there are too many negative feelings for them to work together so this third party is supposed to help facilitate.

That would not surprise me in the least.

For whatever reasons both sides seem to act like children when they're around each other.

[topfiverecords]

Originally Posted by Hack&Lube

I heard on the radio that a lot of this is because of bad blood in negotiations between CSEC and Council. They don't see eye too eye and there are too many negative feelings for them to work together so this third party is supposed to help facilitate.

Now the city can pay expensive hourly rates for someone to tell them the other side still and won’t ever see eye to eye.

[Hack&Lube]

Originally Posted by topfiverecords

Now the city can pay expensive hourly rates for someone to tell them the other side still and won’t ever see eye to eye.

Correction, your taxes are paying.

It's basically marriage counselling between two spouses who hate each other and won't speak to each other anymore.

[AFireInside]

The offer from the City was far too generous to start with. Outside of Edmonton, most arenas are built with more private money. I can at least understand why the city of Edmonton wanted to get the deal done, it changes their downtown, and moves the arena from the middle of nowhere, to a more central area that needed revitalization.



None of that is happening in Calgary. An entertainment district just takes patrons from other areas of Calgary, it's not additional money. Would it be cool to have, sure, but it's not a big game changer for Calgary. People will still spend their money in the city if they don't go to games, etc. Most families are priced out of going to games, and they still spend their money on other forms of entertainment, or at other local businesses.



Obviously concerts are a bit of a boost, but it's not that many concerts. I'm over the owners trying to get us to pay for their great investment that they don't want to pay for, which obviously makes no sense, unless of course it's a terrible investment.

[topfiverecords]

Originally Posted by Hack&Lube

Correction, your taxes are paying.

It's basically marriage counselling between two spouses who hate each other and won't speak to each other anymore.

I don’t pay the property taxes, my wife does. Lol.

[DeluxeMoustache]

Third party facilitator can’t salvage the deal

The NHL gets the last word on this night


Bettman even stopped by in round 1
Should’ve agreed to build the damn arena

Lol

[browna]

Originally Posted by powderjunkie

https://livewirecalgary.com/2022/05/...calgary-arena/

3rd parties announced. Not in the Oak View Group realm as many imagined, but just some guys to 'help' negotiations...seems like it might just be guys who can help CSEC exploit the real-estate side of things.

Oak View group was simply a name drop by some excited councillor with Google skills, grabbed by the rest of council and juiced up by dropping city names to sound like some white knight that could happen to save things here, and be fit both sides…and both as a shot against the CSEC that they can handle things without the CSEC and because they have an overinflated view of what the situation is.
Oak View is a company deals with major event centres where the buildings are filled 250 days a year, and they are in it not as a charity, but to make their cut from the management arrangement as well.

That cut isn’t coming from the situation here; one pro team that nearly sells out for 43 games, three minor league teams (Roughnecks Hitmen and throw in Heat) for another 100 dates that draw 5-7 k on average another and 10 (at most) sold out concerts per year and a handful of other events that get 8k people.

I’m sure the city reached out and either got the brush off entirely or ignored by them.

This ad hoc committee is basically admittance that some third party saviour wants nothing to do with things here and the CSEC and City have to figure it out, or else.

[dino7c]

who cares, league is fixed...fold the franchise

[powderjunkie]

Continuing from the Huby/Weegar thread because I like my horses well beaten.

Originally Posted by Jay Random

They're not going to be land barons. CalgaryNext was DOA. CSEC was not going to own or develop any land in Victoria Park under the agreement that was actually made. If they were trying to follow the Oilers way, they have already failed.

Bolded is not true - CSEC had first option to buy the bus barns land (and I think another parcel nearby) at 'market value'. Of course, there is plenty of room for shenanigans in determining FMV without open bidding.

My sense has always been that CSEC never knew exactly how they'd be able to exploit the real estate side of things, just that it was something that should be possible. The profiles of the 3rd party facilitators hint to me that they are largely there to help CSEC figure that part out.

[Cleveland Steam Whistle]

Originally Posted by AFireInside

The offer from the City was far too generous to start with. Outside of Edmonton, most arenas are built with more private money. I can at least understand why the city of Edmonton wanted to get the deal done, it changes their downtown, and moves the arena from the middle of nowhere, to a more central area that needed revitalization.



None of that is happening in Calgary. An entertainment district just takes patrons from other areas of Calgary, it's not additional money. Would it be cool to have, sure, but it's not a big game changer for Calgary. People will still spend their money in the city if they don't go to games, etc. Most families are priced out of going to games, and they still spend their money on other forms of entertainment, or at other local businesses.



Obviously concerts are a bit of a boost, but it's not that many concerts. I'm over the owners trying to get us to pay for their great investment that they don't want to pay for, which obviously makes no sense, unless of course it's a terrible investment.

It is a terrible investment. It's a money losing venture for all involved. The City has to decide if it wants an event centre and an NHL franchise long term and if they see benefit in that or not.

If they don't, likely time to tell the CSE and the NHL that when the Dome truly stops being a tolerable solutions for the Flames to look a selling the team.

If they do, the city should do their diligence and understand exactly how much they will be willing to pay for, and try to get the private partners in this endeavor to put up as much as they possibly can.

But people need to understand, there is NO business case in the city of Calgary (or Edmonton, which is why that deal required public funds) where it makes sense for any private investor to put up close to a billion dollars investment to build an Event Centre here. I said it in another thread, but the return on investment from a basic savings account is a better business case than the capital outlay required for this new rink.

Not wanting public funds to go to an event center is 100% a viable position. But thinking this is some savvy play by Edwards or any private company to get someone else to give them a handout on an amazing business opportunity that they should just pay for themselves is completely off on the economics on this project.

[powderjunkie]

Originally Posted by Cleveland Steam Whistle

It is a terrible investment. It's a money losing venture for all involved. The City has to decide if it wants an event centre and an NHL franchise long term and if they see benefit in that or not.

If they don't, likely time to tell the CSE and the NHL that when the Dome truly stops being a tolerable solutions for the Flames to look a selling the team.

If they do, the city should do their diligence and understand exactly how much they will be willing to pay for, and try to get the private partners in this endeavor to put up as much as they possibly can.

But people need to understand, there is NO business case in the city of Calgary (or Edmonton, which is why that deal required public funds) where it makes sense for any private investor to put up close to a billion dollars investment to build an Event Centre here. I said it in another thread, but the return on investment from a basic savings account is a better business case than the capital outlay required for this new rink.

Not wanting public funds to go to an event center is 100% a viable position. But thinking this is some savvy play by Edwards or any private company to get someone else to give them a handout on an amazing business opportunity that they should just pay for themselves is completely off on the economics on this project.

This is all fair an reasonable, but the 640 million dollar question is what makes a hockey team so special?

Pretty much every single business in the world has capital requirements that aren't directly profitable investments, but are necessary for overall profitability.

Certainly many businesses lobby their way to major gov't subsidy/support, but there are a few key differences:

- rarely is it municipal support (and if so we certainly aren't dealing in the millions, let alone 100 millions)...
- even at provincial/federal level this scale is way out of whack...any company benefiting to the tune of 100s of millions is going to be waaaaay bigger (and more economic impact) than this itsy-bitsy little corporation that is so helpless it can't even afford its own 4 walls + roof...
- other subsidies tend to have far more tangible and reiterative benefits (moreso than a few PT jobs and civic pride)

The answer has always been simple...any 'investment' to the degree of what we'll see from the city would warrant equity in any other case. I'm fine with the city ponying up, but we should be getting a 10-20% stake in the franchise. Presumably the NHL does not want that kind of [real-life business] arrangement...ergo having their cake and eating it, too.

[Cleveland Steam Whistle]

Originally Posted by powderjunkie

This is all fair an reasonable, but the 640 million dollar question is what makes a hockey team so special?

Pretty much every single business in the world has capital requirements that aren't directly profitable investments, but are necessary for overall profitability.

Certainly many businesses lobby their way to major gov't subsidy/support, but there are a few key differences:

- rarely is it municipal support (and if so we certainly aren't dealing in the millions, let alone 100 millions)...
- even at provincial/federal level this scale is way out of whack...any company benefiting to the tune of 100s of millions is going to be waaaaay bigger (and more economic impact) than this itsy-bitsy little corporation that is so helpless it can't even afford its own 4 walls + roof...
- other subsidies tend to have far more tangible and reiterative benefits (moreso than a few PT jobs and civic pride)

The answer has always been simple...any 'investment' to the degree of what we'll see from the city would warrant equity in any other case. I'm fine with the city ponying up, but we should be getting a 10-20% stake in the franchise. Presumably the NHL does not want that kind of [real-life business] arrangement...ergo having their cake and eating it, too.

Very fair, and maybe that needs to be part of the deal. This is where I try not to venture into what makes sense, because IMO I don't know enough of the key details to know what makes a fair deal for all parties involved. I just get frustrated when people act like CSE are crooks trying to milk the city for funds on an amazing investment for them that they should be willing to pay for. That's not the case at all.

The only thing I'll say, is your thoughts, while valid, also create a bit of a circular argument. A bit of what end do you pay for it on.

- If the city gets a stake in profits... then theoretically that make the "investment" opportunity worse for any private investor. So in theory, that just pushes the amount they'd expect the city to contribute up front higher..........which in turn would push up what the city should expect to get out of the stake in the franchise........and so on until it doesn't make sense for either side.


Really for the city it comes down to a few items I think:
- How much would they invest in an Event Centre (if anything) if the Flames weren't around and they weren't going to have an anchor tenant of the Flame caliber in it.

- How much is having an NHL franchise and a potentially upgraded Event Centre for other events worth to them in regards to attracting and retaining major corporations to set up shop here (so create tax dollars for them) and how much does it help keep other businesses viable (create tax dollars for them).

The answer to the two questions above certainly isn't the full cost of the project I'm sure, and it may very well be 0. But if it's 0, or it's too far apart from what the CSE needs to make it worth while for them to invest their portion, then likely time for the city to divorce from the idea having a major league sports team in Calgary, and accept we won't be a destination for major league arena concerts. Again that's a totally viable position, it's a lot of public funds that could go elsewhere, but we just need to be honest about what it means.

[dissentowner]

Originally Posted by AFireInside

The offer from the City was far too generous to start with. Outside of Edmonton, most arenas are built with more private money. I can at least understand why the city of Edmonton wanted to get the deal done, it changes their downtown, and moves the arena from the middle of nowhere, to a more central area that needed revitalization.



None of that is happening in Calgary. An entertainment district just takes patrons from other areas of Calgary, it's not additional money. Would it be cool to have, sure, but it's not a big game changer for Calgary. People will still spend their money in the city if they don't go to games, etc. Most families are priced out of going to games, and they still spend their money on other forms of entertainment, or at other local businesses.



Obviously concerts are a bit of a boost, but it's not that many concerts. I'm over the owners trying to get us to pay for their great investment that they don't want to pay for, which obviously makes no sense, unless of course it's a terrible investment.

Hey, if you don't appreciate having an NHL franchise right in your city we will gladly take the Flames in Southwestern Ontario. I would gladly pay more tax dollars in London for the city to renovate the arena here or even build a new one and so would everybody else here. Be damn thankful you have an NHL team that is local and competitive and stop whining about public funding.

[Makarov]

Originally Posted by Cleveland Steam Whistle

It is a terrible investment. It's a money losing venture for all involved. The City has to decide if it wants an event centre and an NHL franchise long term and if they see benefit in that or not.

If they don't, likely time to tell the CSE and the NHL that when the Dome truly stops being a tolerable solutions for the Flames to look a selling the team.

If they do, the city should do their diligence and understand exactly how much they will be willing to pay for, and try to get the private partners in this endeavor to put up as much as they possibly can.

But people need to understand, there is NO business case in the city of Calgary (or Edmonton, which is why that deal required public funds) where it makes sense for any private investor to put up close to a billion dollars investment to build an Event Centre here. I said it in another thread, but the return on investment from a basic savings account is a better business case than the capital outlay required for this new rink.

Not wanting public funds to go to an event center is 100% a viable position. But thinking this is some savvy play by Edwards or any private company to get someone else to give them a handout on an amazing business opportunity that they should just pay for themselves is completely off on the economics on this project.

Genuine question: do you have a source for this conclusion?

[Snuffleupagus]

Tax payers pay for stupid things all the time, it’s part of living in a big city, I can’t stand CFL football but I think we need a new stadium even more than a new arena for the Flames. People need to realize whether there’s new stadiums, arenas or not, your taxes are going up anyway.