Quote:
Originally Posted by mattgrande
Wow, so in order to save "as much as $26.2 million," all we have to do is spend $85 million??? What a fantastic deal!
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You're not including the at least $50M of deferred maintenance that needs to go into FOC as well as the annual operating maintenance. That would be eliminated as part of an $85M city contribution to a new build, as the operator(not the city would be responsible for maintenance).
Also not included is what proceeds the City would fetch if it sold the land FOC is currently sitting on as part of its funding source towards a new arena.
I believe that $26.2M savings number already includes the cost of the new build.
For example
New build
City Contribution = $85M up front
Land Sale proceeds of current arena= ($10M)
Net cost to City= $75M
Maintenance cost covered by the operator of the arena
Existing Arena
City Contribution = $50M for deferred maintenance with 5 years
City Contribution = $2M a year for annual maintenance over the next 25 years(based on current maintenance)
Total City Contribution = $100M
Difference between two scenarios = $25M
I think thats how they got their numbers. It really is a tough decision as you lose that psychological impact of having a "big league" arena if you go to 10,000 seats. But the prime tenant wants something smaller and is willing to put up a good chunk of the cost. I see this being quite a big debate as it is an important decision the City will be making.