Flames 'New' Arena II - 'No it's yours, I insist'

[Lunatik]

And if you think the City’s offer of:
- several hundred millions of dollars up front,
- a low interest rate loan for another several hundred millions of dollars
- providing additional transportation infrastructure (green line lrt) for another several hundreds of millions of dollars, and
- reclaiming the old Saddledome site for what will probably amount to another hundred million dollars,
Is the Flames paying for an arena alone, you’re delusional.

Actually the city's offer was to be 100% repaid, so yeah it is the Flames paying for the arena alone. That's like claiming you aren't paying for your house completely because you have a mortgage.

 

[Anglesmith]

Actually the city's offer was to be 100% repaid, so yeah it is the Flames paying for the arena alone. That's like claiming you aren't paying for your house completely because you have a mortgage.

That's not true, though. The city's offer was to pay 33%. Not as a loan, but outright for the construction of the arena.

This is not a loan, and it's important to realize the difference. Property tax is not related to construction of the arena. It is a cost of owning land in a city. At the same time as the city receives money through property tax, the Flames make a massive profit by owning the building and collecting money from every event they host there. If you want to suggest that the city eventually will receive all their money back in that proposal, that is definitely true. And it is also true of the Flames, which by the Flames' logic means that no one is paying for the arena. Or everyone is. Hard to say.

Regardless, one thing that the Flames' and Bettman's whining makes clear is that the Flames have a great deal of money to make in a new arena being built. They are apparently losing money hand over fist by not having a new arena. They want the city to contribute more because Calgary's citizens benefit. They get to watch the Flames in a better arena, and they get all these concerts they're currently missing out on. But they benefit by going to those events at the new building. For which they buy a ticket. On which the Flames owners make a great deal of money, and far greater because of the new arena and all of its glorious amenities. Thus the citizens will pay for that privilege just like they pay for the privilege of having any kind of business in town. There's no reason to do mathematical gymnastics to dodge that.

Imagine a circus coming to town and suggesting that the city should fund some of their setup costs because the citizens will now have the privilege to buy tickets and go see it. Doesn't make any sense.

The Flames have made it clear that they're going to make out like gangbusters by having a new arena compared to the old one, so the issue clearly is clearly not in whether it will improve their bottom line, but by how much. For the city, this will be a net loss compared to having a normal business in that space paying for their own premises like normal and paying the same property tax like normal. But it's one they're willing to take because of loyalty to the team.

 

[Ace Rimmer]

Actually the city's offer was to be 100% repaid, so yeah it is the Flames paying for the arena alone. That's like claiming you aren't paying for your house completely because you have a mortgage.

No, it wasn't.

The mortgage comparison is terrible. When you own your house (whether outright or financed via mortgage) you still have to pay property tax. Forever.

 

[Lunatik]

No, it wasn't.

The mortgage comparison is terrible. When you own your house (whether outright or financed via mortgage) you still have to pay property tax. Forever.

I never said a thing about the property tax, but every penny the city was "contributing" was a loan

 

[Lunatik]

That's not true, though. The city's offer was to pay 33%. Not as a loan, but outright for the construction of the arena.

Bullshit, every penny was to be repaid in some manner. Unless the city made some other proposal I am not aware of.

 

[1989]

Not trying to bring the topic too far off the rails, but I've always wondered why businesses like the Telus Sky building, or any other corporate entity is expected to build their downtown HQ out of pocket AND pay property taxes but CSEC isn't willing to follow suit.

I don't know about you guys but when Calgary was actively courting Amazon HQ2, I never heard about the city having to pay a third of their building costs up front, or having to negotiate property tax cuts.

What am I missing here? Not getting my facts straight??

 

[Anglesmith]

Bull****, every penny was to be repaid in some manner. Unless the city made some other proposal I am not aware of.

This article contains the proposal and the city's response to it: Calgary Flames CEO says city's arena proposal would leave team footing full bill

The Flames say that they'd be paying the Flames back through either property tax, rent or lease, but the city's offer involved property tax and neither rent nor lease. And property tax isn't a matter of "paying the city back" in the same way that citizens buying tickets isn't "paying the team back" for construction of the arena.

 

[Lunatik]

This article contains the proposal and the city's response to it: Calgary Flames CEO says city's arena proposal would leave team footing full bill

The Flames say that they'd be paying the Flames back through either property tax, rent or lease, but the city's offer involved property tax and neither rent nor lease. And property tax isn't a matter of "paying the city back" in the same way that citizens buying tickets isn't "paying the team back" for construction of the arena.

I did forget about this one, my mistake. There was one before where the city's "contribution" was done as a loan and they included the ticket surcharge as apart of the city contribution as well. This is definitely more realistic, but I think including the Saddledome demolition as apart of what they are paying is pretty dumb.

 

[Anglesmith]

I did forget about this one, my mistake. There was one before where the city's "contribution" was done as a loan and they included the ticket surcharge as apart of the city contribution as well. This is definitely more realistic, but I think including the Saddledome demolition as apart of what they are paying is pretty dumb.

I don't think so. If you compare to, say, a regular business buying the land and wanting to put up a building and do business there, that is one of the costs they have to pay for. If you buy a property and want to replace the house with a new one, you have to demolish the current house first, and pay a price to do so. The city offering to pay for that is certainly a direct contribution to the construction.

Also, that previous offer you're talking about wasn't officially disclosed, I don't think. But it's probably what King was referring to when he said "property tax, rent or lease." Of course, it's disingenuous to lump those things together as the same.

 

[Lunatik]

I don't think so. If you compare to, say, a regular business buying the land and wanting to put up a building and do business there, that is one of the costs they have to pay for. If you buy a property and want to replace the house with a new one, you have to demolish the current house first, and pay a price to do so. The city offering to pay for that is certainly a direct contribution to the construction.

The city would be paying to demolish a building they currently own though, the Flames are tenants in the Saddledome and not the owners.

 

[Anglesmith]

The city would be paying to demolish a building they currently own though, the Flames are tenants in the Saddledome and not the owners.

Yes. And that's a cost that only arises when a new building is being sought. If it weren't for the new building, the Saddledome wouldn't be getting demolished. So it's definitely part of the cost of the new arena project.

 

[Lunatik]

Yes. And that's a cost that only arises when a new building is being sought. If it weren't for the new building, the Saddledome wouldn't be getting demolished. So it's definitely part of the cost of the new arena project.

We'll have to agree to disagree, but in the end 25m for demolition is just a small drop in the bucket

 

[Ace Rimmer]

Not trying to bring the topic too far off the rails, but I've always wondered why businesses like the Telus Sky building, or any other corporate entity is expected to build their downtown HQ out of pocket AND pay property taxes but CSEC isn't willing to follow suit.

I don't know about you guys but when Calgary was actively courting Amazon HQ2, I never heard about the city having to pay a third of their building costs up front, or having to negotiate property tax cuts.

What am I missing here? Not getting my facts straight??

Mostly because there is (at the very least) a perception that the arena has a public benefit that private entities do not. Which I believe might actually have a basis in fact but can’t recall seeing where.

 

[Anglesmith]

Mostly because there is (at the very least) a perception that the arena has a public benefit that private entities do not. Which I believe might actually have a basis in fact but can’t recall seeing where.

Things like "civic pride" and such. But there is definitely the factor that, to a certain extent, it is a privilege to have a professional sports team in your own city. The question is whether this is a privilege that is felt even if you never buy tickets or add to broadcast ratings by watching games of that team. Because if you do, that privilege is already being paid for.

The extra bump must be attributed to "intangible" benefits of having a world-class arena and a professional team.

 

[Ace Rimmer]

It is also currently not legally possible to give a corporation a tax break / relief in Alberta - so that's why the Flames group doesn't want to own the building, just have all of the benefits and pay rent - not sure if that includes the full operations/maintenance expenses or not.

Why are these deals not extended to other corporations? Most often they (the corporation) require outright ownership of their office / building / facilities for a variety of reasons.

 

[Anglesmith]

City of Calgary hoping to revive arena talks with Flames

After talks between the city and the Calgary Flames on a new arena project went sideways in September, some councillors have begun efforts to renew negotiations with the hockey club.
Led by councillor Jeff Davison, and sponsored by a strong majority of Calgary council, a motion will be filed in hopes of renewing talks with the Flames. The motion does not require the support of Calgary Mayor Naheed Nenshi, one of the loudest voices in the last round of failed negotiations.

 

[InfinityIggy]

It'll be interesting but probably very predictable as to how the Flames respond.

 

[Mobiandi]

They already did, as you would expect

 

[Anglesmith]

That's such a weird statement to make. What could the intent of that message possibly be?

 

[InfinityIggy]

That's such a weird statement to make. What could the intent of that message possibly be?

I can't help but picture a child with arms folded, stomping his feet. Staring at the ground with a pouty lip.

 

[Mobiandi]

That's such a weird statement to make. What could the intent of that message possibly be?

"Only come back to us with the offer we want"

 

[Anglesmith]

I feel like the Flames are overplaying their hand, though I guess they've been doing that the whole time. This would have been a nice time to try to recapture the public trust by at least indicating that they were excited with the thought of the city coming back to the table.

I know that negotiation 101 is keeping an appearance that you don't really want/need the deal, but I feel like in this situation that's a really bad strategy to use. The citizens of Calgary want to feel like the team is part of the city that would hate to leave, not just a business that happens to have HQ there and that they have to beg to stay.

 

[Ace Rimmer]

Really the Flames can play a waiting game here.

The Flames know full well that despite the IOC's statement that the Saddledome (just one arena) would be satisfactory to host an Olympic Games, two would be ideal.

Especially one that's shiny and new.

Especially especially one that's got an attached stadium capable of hosting opening/closing ceremonies.

Especially especially especially one that cleans up a major environmental issue as a result.

They're going full hardball, and probably holding out for their original Calgary Next proposal, where they get the land for free, get all levels of government to participate in cleanup, and get to develop the remainder too.

 

[Johnny Hoxville]

Good on King.

 

[InfinityIggy]

Good on King.

LOL.