News Article: Flames Not-So-New Arena, The Saga Continues

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Johnny Hoxville

The Return of a Legend
Jul 15, 2006
37,549
9,343
Calgary
So the city is publicly saying they want to negotiate, but they're lying.

And the Flames are the ones who publicly walked away, but they're also lying.


:huh:

Why did King say the owners were done pursuing a new arena in the first place? It’s because the City balked at the idea of CalgaryNext, (which actually would have been a great idea for several reasons). So the Flames moved on their position and agreed to look at the Victoria Park model. The city requested that the Flames provide the details of the various ins and out of their proposal, which they have. To my knowledge, the city has come up with a single offer to the Flames which has them paying for the entire shabang and has been unwilling to move off of their position whatsoever, which is why the Flames “walked awayâ€. And if anyone truly believes that’s what the Flames did/are doing, they don’t know anything about negotiating. Again it’s abundantly clear to me that Nenshi has other priorities and yet used building a new arena in his campaign which is a complete farce.

The Flames should improve their offer, but I think they feel the City should be the ones to move the needle next and I fully support them in their stance.
 

Anglesmith

Setting up the play?
Sep 17, 2012
46,442
14,718
Victoria
To my knowledge, the city has come up with a single offer to the Flames which has them paying for the entire shabang

This is, dare I say, fake news.

The Flames would be paying for one third of the new arena in the city's proposal.

People buying the tickets would be paying for one third. The Flames have claimed that this is a cost incurred on the Flames' side, but that is pure spin. The way surcharges work, usually, is that if a ticket was $100 before, it's still going to be listed at that same price. Then, when you guy to buy it and the taxes and fees are added, you will see the surcharge. Whenever a product is taxed, that tax is basically always passed on to the consumer. In some businesses, a tax like this can drive away business and hurt the company. I don't think you or anyone believes that this is one of those cases. The Saddledome will be full. The Flames aren't going to lose a damn thing over this surcharge. So calling this a Flames cost is an outright lie.

The city would be paying for one third. This isn't a loan. It's not going to be paid back. There is zero justification for considering this a Flames cost. I don't think anything really needs to be said here.

Now, that's all the money you need to build an arena. Only a third of it came from the Flames. The arena is now built.

The Flames will be given all rights to make profit off the building, and they'll make a lot of profit. As a business operating in the city, they will be expected to pay taxes on what they earn. That is a cost of doing business in the city. It is not a cost of building the arena.

Everybody sees this. The mayor has explained it in simple terms. The fans all saw through it immediately. The media gets it. I have no idea why you would cling to this lie that the Flames are telling.
 

Tkachuk Norris

Registered User
Jun 22, 2012
15,602
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1989

Registered User
Aug 3, 2010
10,361
3,865
Harvey, I have to wonder at this point why you're still so vehemently on CSEC's side. I'm not saying either side have been absolved of blame in their role, but I'm beginning to doubt whether you're even a Calgarian if you believe any of CSEC's proposals have been fair beyond the concept of constructing a new facility for their own profit.
 

Johnny Hoxville

The Return of a Legend
Jul 15, 2006
37,549
9,343
Calgary
This is, dare I say, fake news.

The Flames would be paying for one third of the new arena in the city's proposal.

People buying the tickets would be paying for one third. The Flames have claimed that this is a cost incurred on the Flames' side, but that is pure spin. The way surcharges work, usually, is that if a ticket was $100 before, it's still going to be listed at that same price. Then, when you guy to buy it and the taxes and fees are added, you will see the surcharge. Whenever a product is taxed, that tax is basically always passed on to the consumer. In some businesses, a tax like this can drive away business and hurt the company. I don't think you or anyone believes that this is one of those cases. The Saddledome will be full. The Flames aren't going to lose a damn thing over this surcharge. So calling this a Flames cost is an outright lie.

The city would be paying for one third. This isn't a loan. It's not going to be paid back. There is zero justification for considering this a Flames cost. I don't think anything really needs to be said here.

Now, that's all the money you need to build an arena. Only a third of it came from the Flames. The arena is now built.

The Flames will be given all rights to make profit off the building, and they'll make a lot of profit. As a business operating in the city, they will be expected to pay taxes on what they earn. That is a cost of doing business in the city. It is not a cost of building the arena.

Everybody sees this. The mayor has explained it in simple terms. The fans all saw through it immediately. The media gets it. I have no idea why you would cling to this lie that the Flames are telling.

AS, you are technically right about the ticket tax. As someone who manages a business, I see this a lot like when you pay GST. We obviously charge all of our customers GST, but when our bill comes along it is a large chunk of money to have to pay out but providing your business has a good accountant this shouldn’t be an issue.

The part I disagree with you on is that you are saying the Flames do not have to pay the city back. To me it’s pretty clear the city is asking that the Flames pay it back by the form of a property tax or other means, and it’s pretty ambiguous at this point. Thats a huge number and a difference from the 52% in the Flames proposal and the owners obviously feel uneasy with how they would be paying these annual operating costs. You talk about how the Flames will make all this revenue back which I agree with, but totally ignore all the benefits the city will reap from this project.

I haven’t liked how the city has handled this from the outset of CalgaryNext. It also irritates me how they’ve conducted themselves in the negotiating process.
 

Anglesmith

Setting up the play?
Sep 17, 2012
46,442
14,718
Victoria
AS, you are technically right about the ticket tax. As someone who manages a business, I see this a lot like when you pay GST. We obviously charge all of our customers GST, but when our bill comes along it is a large chunk of money to have to pay out but providing your business has a good accountant this shouldnÂ’t be an issue.

The part I disagree with you on is that you are saying the Flames do not have to pay the city back. To me itÂ’s pretty clear the city is asking that the Flames pay it back by the form of a property tax or other means, and itÂ’s pretty ambiguous at this point. Thats a huge number and a difference from the 52% in the Flames proposal and the owners obviously feel uneasy with how they would be paying these annual operating costs. You talk about how the Flames will make all this revenue back which I agree with, but totally ignore all the benefits the city will reap from this project.

I havenÂ’t liked how the city has handled this from the outset of CalgaryNext. It also irritates me how theyÂ’ve conducted themselves in the negotiating process.

The disagreement stems from the fact that paying property tax and paying for operating costs is the default for a business. It's not an added cost, and it has nothing to do with the actual construction of a new building. Think of it this way. For a normal business, if you want a new building, you pay for that building, and then you still pay the city property tax. What is that property tax "paying back?" Nothing. It's an operating cost. If it's something that exists in situation where there is no city subsidization, why would it be considered to be linked to it in this particular situation?

In reality, because paying property tax and paying for operating costs is the default situation, allowing the Flames to not pay property tax is a payment from the city to the Flames. But neither of those two scenarios should in any way be factored into the building of the arena.

The arena building cost, and how it is split, is one part of the deal. It's fine to have other things built into the deal. The team would be fine to suggest that they be tax-exempt as part of the deal. They could argue that in revitalizing the area, the property tax they create will cover what they are withholding. But pretending that property tax would be back-payment towards the construction of the arena is a dishonest way to present that proposal.
 

Johnny Hoxville

The Return of a Legend
Jul 15, 2006
37,549
9,343
Calgary
The disagreement stems from the fact that paying property tax and paying for operating costs is the default for a business. It's not an added cost, and it has nothing to do with the actual construction of a new building. Think of it this way. For a normal business, if you want a new building, you pay for that building, and then you still pay the city property tax. What is that property tax "paying back?" Nothing. It's an operating cost. If it's something that exists in situation where there is no city subsidization, why would it be considered to be linked to it in this particular situation?

In reality, because paying property tax and paying for operating costs is the default situation, allowing the Flames to not pay property tax is a payment from the city to the Flames. But neither of those two scenarios should in any way be factored into the building of the arena.

The arena building cost, and how it is split, is one part of the deal. It's fine to have other things built into the deal. The team would be fine to suggest that they be tax-exempt as part of the deal. They could argue that in revitalizing the area, the property tax they create will cover what they are withholding. But pretending that property tax would be back-payment towards the construction of the arena is a dishonest way to present that proposal.

I know what you’re saying but the way it’s being portrayed in the proposal is that the taxes would be paid as essentially a loan.

King said that staying where they are in the Dome right now is a better deal than what the city offered. I feel confident in speculating that based on those comments, they have pretty good overhead with taxes and operating costs now. It’s pretty clear to me this is the biggest sticking point between the city and Flames.
 

Tkachuk Norris

Registered User
Jun 22, 2012
15,602
6,639
Yeah the main way cities get money is through property tax. And running a city ain't cheap.

The revenue the Flames make is more then ample to pay their share of the taxes.

I do agree with Hox that it needs to be clearer how much tax the City wants. But that's part of a negotiation process and the Flames aren't willing to do that
 

Johnny Hoxville

The Return of a Legend
Jul 15, 2006
37,549
9,343
Calgary
You know a big reason I didn’t change my name a long time ago was because I liked the nickname Hox. I hope that doesn’t go away. :laugh:
 

Anglesmith

Setting up the play?
Sep 17, 2012
46,442
14,718
Victoria
I know what youÂ’re saying but the way itÂ’s being portrayed in the proposal is that the taxes would be paid as essentially a loan.

Yes, it is by the Flames. And this is a dishonest way to present the proposal. Property tax is being included by the city because it's the normal thing to do. In their pie chart, they don't present it as part of the arena cost, because it isn't. They just show it as part of what the city stands to gain from the arrangement, which it is. However, Nenshi clearly said that the amount of tax that would be paid would be negotiable as part of the deal. It's something they can talk about.

King said that staying where they are in the Dome right now is a better deal than what the city offered. I feel confident in speculating that based on those comments, they have pretty good overhead with taxes and operating costs now. ItÂ’s pretty clear to me this is the biggest sticking point between the city and Flames.

Of course staying in the Dome is a better deal for the Flames. And, from a profit perspective, for the city, too. For an arena to be build, hundreds of millions of dollars need to somehow go from some combination of those two parties into the pockets of contractors and construction materials providers. There's no way the arena gets built without an upfront loss of money relative to staying in the Saddledome. But there is financial incentive to building a new arena such that even where the team fully finances the arena, it's worth it. If they don't get a new arena, they have to stomach the cost of relocation, and accept reduced profits in their new town. If they stay in Calgary, they get to make a better profit than currently thanks to new luxury boxes. So I don't buy that claim one bit.
 

Rangediddy

The puck was in
Oct 28, 2011
3,710
809
Elliott Friedman made a couple good points this morning about the city needing to find a way to get a deal done now because it will be more expensive for them in the future.

He mentioned a couple cities which lost their NHL teams (Minnesota & Quebec City) and down the road when they wanted to bring another NHL team back to town, they were forced to pay for a new arena entirely on their own. Both St. Paul and Quebec City's arenas were either paid for by the city, the state/province, or both.

I think this is what some people aren't realizing. That a new arena may not be profitable to the city, but not having one would more likely cost the city more.
 

BertCorbeau

F*ck cancer - RIP Fugu and Buffaloed
Jan 6, 2012
55,037
35,304
Simcoe County
Two things I haven't seen mentioned here from that release yesterday is that CSEC, in addition to the extra security costs covered and free ridership on game nights, wanted full veto power on any developments in the Vic Park area around the area and a cut of the Stampede parking revenue

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

.....

I haven’t liked how the city has handled this from the outset of CalgaryNext. It also irritates me how they’ve conducted themselves in the negotiating process.

I find that interesting to be honest and only because I feel that the City's response has been a great retort to the tactics CSEC are using to try and get the public on their side.
 
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Johnny Hoxville

The Return of a Legend
Jul 15, 2006
37,549
9,343
Calgary
Two things I haven't seen mentioned here from that release yesterday is that CSEC, in addition to the extra security costs covered and free ridership on game nights, wanted full veto power on any developments in the Vic Park area around the area and a cut of the Stampede parking revenue

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



I find that interesting to be honest and only because I feel that the City's response has been a great retort to the tactics CSEC are using to try and get the public on their side.

I’ve already commented on this. Why did the Flames say they were done pursuing a new Arena? It’s becsuse there was zero dialogue coming from the City. The Flames have been advocating CalgaryNext and then Victoria Park with little to no movement on negotiations from the City.

The tactic the Flames are now using (like them or not), is to get things moving again although they cannot publically state that.
 

BertCorbeau

F*ck cancer - RIP Fugu and Buffaloed
Jan 6, 2012
55,037
35,304
Simcoe County
I’ve already commented on this. Why did the Flames say they were done pursuing a new Arena? It’s becsuse there was zero dialogue coming from the City. The Flames have been advocating CalgaryNext and then Victoria Park with little to no movement on negotiations from the City.

The tactic the Flames are now using (like them or not), is to get things moving again although they cannot publically state that.

I disagree. I think they said that in the pursuit of getting public support particularly right before the election. This only pertains to the Vic Park option though

I don't think there was much dialogue on the CalgaryNEXT proposal because it was so half-assed and lacked details on relevant information. Not only on cost breakdown but a lack of details on the underlying issues with that area in general. Predominantly the creosote issue (how much will it cost to clean up, who is liable, etc) but also the major infrastructure work required with realigning Bow Trail. The City put as much time looking into it as CSEC did putting it together IMO.
 

Ace Rimmer

Stoke me a clipper.
I’ve already commented on this. Why did the Flames say they were done pursuing a new Arena? It’s becsuse there was zero dialogue coming from the City. The Flames have been advocating CalgaryNext and then Victoria Park with little to no movement on negotiations from the City.

The tactic the Flames are now using (like them or not), is to get things moving again although they cannot publically state that.
Weren't they negotiating as recently as a few weeks ago? And the City going from $0 contribution to $185 million cash contribution is pretty significant movement. (the indirect costs are irrelevant as they'll happen with or without Dome 2.0)

The Flames "took their ball and went home" because Nenshi and co. didn't bend over and capitulate to their every demand. If the Metro story is true, way too many stupid demands.

I also continue to maintain the position that the existing Saddledome didn't bring new development to Victoria Park, so I fail to see how a new arena would.
 

Anglesmith

Setting up the play?
Sep 17, 2012
46,442
14,718
Victoria
IÂ’ve already commented on this. Why did the Flames say they were done pursuing a new Arena? ItÂ’s becsuse there was zero dialogue coming from the City. The Flames have been advocating CalgaryNext and then Victoria Park with little to no movement on negotiations from the City.

The tactic the Flames are now using (like them or not), is to get things moving again although they cannot publically state that.

My understanding is that the Flames made that announcement specifically as a response to Nenshi having an arena as part of his re-election campaign. If they say that there is no chance of a new deal and he's saying it's part of his vision, it discredits him, and (if they're being naive) puts pressure on him to accept their terms to save face before the election.
 

tmurfin

That’s the joke
May 8, 2010
11,242
1,279
There's a middle ground to be found here, the biggest issue is who owns the arena. There's compromises that can be made either way. Whether the city owns and charges a capped rent, or the team owns and pays a capped tax.. There's ways to shape it to work for both sides, after the election, I think steam really picks up and they get something done.
 

herashak

Registered User
Mar 24, 2013
5,364
558
Salary caps keep rising, revenue keeps rising, everything is going great. Then the need for a new building comes up and the NHL loses their minds and becomes a charity case.
 
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