New Downtown Calgary Arena

[MalcolmTucker]

Originally Posted by YYCguys

No matter where the new arena is sited, roads will have to be upgraded, for those choosing cars over transit. The Bow/Crow/14th mess needs to be addressed regardless, but it doesn't seem to be a high priority for the City right now. If a site in West Village is picked, then the City will be forced to do something about the transportation network there. Will the City still be eligible for grant money that is not for arenas, but is indirectly related to the arena project (ie: road upgrades)?

Edmonton used/is using MSI money directly for the arena. Provincially it was 'no extra special money' for the arena, similar to the airport tunnel in Calgary. Associated projects that fit into various programs are entirely eligible from the federal and provincial governments.

In the end it doesn't matter, since extra money from other levels of government going to the arena or going to a sewer project in the deep SE is no different to the financial situation of the city, as long as the city has agreed to fund both and isn't leaving money on the table. Lining up all the ducks behind a project has a political purpose, but there isn't any accounting purpose.

[Riise]

Originally Posted by tomthumb2

When I first saw the article I was optimistic but by the end I got the feeling that politicians will drag this out forever (as usual).

Ken King and Co. are free to go about building a new arena on their own. The only thing that has held them back from building a privately-financed arena in the last six years is their search for a handout.

[MalcolmTucker]

Originally Posted by joe498

This kind of discussion really frustrates me and here is why:

Aside from the city providing ideas on land and providing permits, the city is not responsible for subsidizing private profits.

The city does not own the Flames, the city wouldn't receive any significant return on investment in the form of tv profits, ticket sales & any other private profits. Unless the City had majority ownership of the Flames and received the majority share of the profits, it should have no part in building a new arena.

If a pro sports team owner can't afford to maintain or build a new arena then maybe they shouldn't be the owner. Billionaires don't need subsidization, some individual billionaires have more money than Calgary's entire city budget, not to mention investment firms, private equity, hedge funds, banks and any other billion dollar company of which Alberta has plenty of due to oil.

In summary, unless the Flames owners are prepared to offer the City a significant portion of the profit they should not expect subsidization. Our city is broke as it stands and cannot provide us the basics without having to raise taxes yearly. Our city and our province is booming and we need all the city revenue possible to keep up.

Our city has many future billion dollar projects of which Provincial dollars will be needed. Considering oil is set to go to $60 as per the OPEC summit, don't expect much provincial money.

The problem with this argument is the assumption that arenas make a huge profit, and so do the Flames. That owners have lots of money doesn't mean it makes sense to put that money into an arena. Their money did not come from owning the sports team.

The way I see it is this: if we didn't have the Saddledome and the Flames, the city would likely build a facility to host large concert events and the occasional Briar and Memorial Cup. Now the incremental costs between that theoretical facility (or renovated Saddledome) and what the Flames want makes sense for the Flames to cover, while paying what would be fair rent on the theoretical facility that is paid for with public dollars.

Does anyone believe Calgary should not have a large event facility? Or that the Saddledome can operate indefinitely without a large infusion of capital?

[The Fisher Account]

The probably with Calgary is that's its full of transient money-sucking mooches who want to pay low taxes and not contribute anything to the social fabric of this city.

[suburbia]

Originally Posted by Coldrsx

^not 'downtown', but for a 'west village' idea.

In my books, West Village IS downtown. There is plenty of built up interest in getting a development stake in West Village already, especially as by that time East Village will have almost certainly be spoken for in entirety. The Edmonton situation and Calgary's situation are quite different.

The urbanites, while wanting this stuff smack in the middle of downtown, also have to reconcile that this project will displace a massive amount of potential added density. I think it is the right thing to do, but just highlighting this dilemma.

http://calgaryherald.com/news/local-news/nenshi-plays-defence-flames-arena

“If they proposed West Village, they’d be nuts,” policy analyst Josh White wrote to his colleagues in January 2013. “We told them two years ago the challenge with this site … The business case only makes sense if you can fully build it out at very high density. An arena sucks up a huge (piece) of land, leaving a lot less to pay back a CRL (community revitalization levy).”

Assuming this mega-project takes up most of West Village, the next phase of intensification will likely need to include the sunalta triangle, and everything south of Kensington road all the way through to Crowchild. Inglewood would also be attractive. Reason I'm pointing this out is that in effect, it will cause a sprawl of a different sort. I'm worried a pinch about infrastructure in some of these areas.

Anyway - looking for the proposal to include some elements of high density development, and maybe the possibilities of a cultural institution or two. The planetarium conversion could be one piece.

[tomthumb2]

Amazing to me that Edmonton and puny little Regina can figure this out but we can't???

[suburbia]

Originally Posted by MalcolmTucker

The problem with this argument is the assumption that arenas make a huge profit, and so do the Flames. That owners have lots of money doesn't mean it makes sense to put that money into an arena. Their money did not come from owning the sports team.

Their ROI has been massive, because the valuation of the team is through the roof. Additionally, all of the owners leverage the network a sports team facilitates, and they work with those other companies and side deals in an on-going fashion. I think the full true value of a team is not completely understood.

[suburbia]

Originally Posted by tomthumb2

Amazing to me that Edmonton and puny little Regina can figure this out but we can't???

Without wanting to be offensive, the reality is that Edmonton and Regina need this for revitalization, whereas in Calgary, this project will actually displace on-going revitalization.

[Calgarian]

Originally Posted by Riise

Ken King and Co. are free to go about building a new arena on their own. The only thing that has held them back from building a privately-financed arena in the last six years is their search for a handout.

Agreed!

[Bigtime]

Originally Posted by suburbia

Without wanting to be offensive, the reality is that Edmonton and Regina need this for revitalization, whereas in Calgary, this project will actually displace on-going revitalization.

Exactly.

[H.E.Pennypacker]

I applaud Nenshi's strong stance on not using public dollars on this matter .. Ultimately though I believe that the City will have to bend a bit to get something done .. The Flames/Stamps owners do have that option of going outside of downtown (hell even outside of the City if they wanted - like Balzac) .. I doubt the City would want to lose that opportunity

They key will be to ensure that there is a great public benefit (outside of the stadium) that will help justify using public dollars .. In the West Village's case, I think it goes beyond just reconfiguring the roads

[artvandelay]

Originally Posted by suburbia

Without wanting to be offensive, the reality is that Edmonton and Regina need this for revitalization, whereas in Calgary, this project will actually displace on-going revitalization.

Except, as I stated in my earlier post, development in the West Village won't be anywhere near "ongoing" for over 20 years. There are just too many challenges that the site faces and it will require massive public investment to bring that area to a development ready state. A project like this will actually spur revitalization rather than displace it.

The only thing up for discussion is to what extent we as a city need that area redeveloped. We already have a vibrant downtown that continues to improve - is West Village revitalization really a priority for us?

[Allan83]

Originally Posted by MalcolmTucker

Depends, if the Flames have assembled enough land, the city through non-dollar means could transfer hundreds of millions of land value to the Flames via upzoning. The city could then do a CRL for the public realm components, environmental remediation, upgrade of Sunalta Station if needed, 20th Street Pedestrian Bridge. The CRL might take longer to pay off, might need to dip down into the already upzoned Sunalta, and the density might need to be higher to generate the necessary dollars.

I would be ok with this kind of arrangement.

Perhaps other people have better imaginations than I do, but I don’t really see West Village as a great place for future residential developments. It’s more than a short walk from downtown. Depending on how it would be configured there would be either one or two high speed roads going through it. The river bank isn’t all that nice there, although that could probably be changed. It’s an old industrial site with lots of contamination issues. It seems to me that there are lots of better places to build residential. East Village, West End, Railtown, Westbrook, along the Green Line in Ramsay, Bridgeland. How about Firepark for a dense condo development? Think of the views from there.

[suburbia]

Originally Posted by artvandelay

Except, as I stated in my earlier post, development in the West Village won't be anywhere near "ongoing" for over 20 years. There are just too many challenges that the site faces and it will require massive public investment to bring that area to a development ready state. A project like this will actually spur revitalization rather than displace it.

I don't agree. There are more challenges in context of roads for a large-scale project like an arena development were that to go forward, as opposed to modest adjustments for more dense smaller projects.

Don't get me wrong, I don't mind an arena going in there, but need to fully understand the value proposition. After that is understood, the final assessment will need to strongly consider the opportunity cost. Most people don't consider opportunity cost, and in this case, opportunity cost is massive.

Between us here, I think the zoo getting flooded should have resulted in a more comprehensive re-think. I would argue that a land-starved zoo in the middle of the city maybe doesn't make sense, and it could have been an opportunity to consider something larger and better for animals on the Western outskirts more connected with our own wilderness. Had that happened, zoo island could have been a massive clean-slate opportunity, and the zoo more of an international catch for those flying in for the mountains and Banff.

I think the problem with most in the city (other than perhaps Nenshi) is they think too small and too short-term. We really need to step back and have a 50+ year view of how we move forward. The zoo damage was a major opportunity for us. 25 years from now, we'll be wondering about how we got there.

[suburbia]

Originally Posted by Allan83

Perhaps other people have better imaginations than I do, but I don’t really see West Village as a great place for future residential developments. It’s more than a short walk from downtown. Depending on how it would be configured there would be either one or two high speed roads going through it. The river bank isn’t all that nice there, although that could probably be changed.

I'd encourage you to review the west village plan. It would be a good read to understand the opportunity cost of land there being instead given to Calgary's billionaires. Your comment about the river bank is all short-term thinking. The plan deals with things like this, creating a riverbank asset for many decades to come, instead of saying the riverbank is not perfect so let's instead give it away.

[tomthumb2]

Originally Posted by H.E.Pennypacker

I applaud Nenshi's strong stance on not using public dollars on this matter .. Ultimately though I believe that the City will have to bend a bit to get something done .. The Flames/Stamps owners do have that option of going outside of downtown (hell even outside of the City if they wanted - like Balzac) .. I doubt the City would want to lose that opportunity

They key will be to ensure that there is a great public benefit (outside of the stadium) that will help justify using public dollars .. In the West Village's case, I think it goes beyond just reconfiguring the roads

I agree H.E.

And while I respect everyones opinions here and agree with most, the selfish side of me would love a world class facility with all the bells and whistles. I guess we'd better just accept the Dome as is or move to Balzac.

[Riise]

Originally Posted by MalcolmTucker

The problem with this argument is the assumption that arenas make a huge profit, and so do the Flames. That owners have lots of money doesn't mean it makes sense to put that money into an arena. Their money did not come from owning the sports team.

Dividends aren't the only way business folk can make money off of sports clubs. Share value is another source of profits and an arena would deffo add value to a team's shares.

[ByeByeBaby]

Originally Posted by MalcolmTucker

The problem with this argument is the assumption that arenas make a huge profit, and so do the Flames. That owners have lots of money doesn't mean it makes sense to put that money into an arena. Their money did not come from owning the sports team.

The way I see it is this: if we didn't have the Saddledome and the Flames, the city would likely build a facility to host large concert events and the occasional Briar and Memorial Cup. Now the incremental costs between that theoretical facility (or renovated Saddledome) and what the Flames want makes sense for the Flames to cover, while paying what would be fair rent on the theoretical facility that is paid for with public dollars.

Does anyone believe Calgary should not have a large event facility? Or that the Saddledome can operate indefinitely without a large infusion of capital?

If the Flames made $22M in profit last year, and the value of the franchise has risen from $135M in 2006 to $450M today, as per Forbes, then there's no assumption about it. Sports franchises are incredibly profitable as investments, even if they provide no present cash flow (and the Flames provide both).

The Pacific Coliseum is still open for hockey and concerts; it's 46 years old. Sure, it had a renovation before the games; for $25 million. That's 4% what the new Edmonton arena is going to cost.

[MalcolmTucker]

Originally Posted by ByeByeBaby

If the Flames made $22M in profit last year, and the value of the franchise has risen from $135M in 2006 to $450M today, as per Forbes, then there's no assumption about it. Sports franchises are incredibly profitable as investments, even if they provide no present cash flow (and the Flames provide both).

The Pacific Coliseum is still open for hockey and concerts; it's 46 years old. Sure, it had a renovation before the games; for $25 million. That's 4% what the new Edmonton arena is going to cost.

On the Northlands renovation:

The study was released to city council Wednesday and met with predictable negative reaction. The cost of renovation, in 2008 dollars it should be noted, came in at something between $220 million and $250 million

As for the $22 million in profit, spending all of the profit on loan repayment would raise $400 million dollars if the province provided low interest financing, or they could raise the money at sub 3.4%.

$22 million sounds like a lot, but it is not. And share value is like being house poor, it doesn't mean you're rich.

[Full Mountain]

I'm sure the Flames would be more likely to come to an agreement with the UofC for the McMahon land than they ever would with the city regarding the West Village