New Downtown Calgary Arena

[Big Sky]

Originally Posted by fusili

I am just providing the definition economists use to define public goods: https://en.wikipedia.org/wiki/Public_good

Fair enough. I don't disagree with the definition, just that not all things that benefit the public have to be publicly owned. If the plan was for the Flames owners to pay for the site cleanup, and be the owners of the building, I would be okay with a one time cost of public money going to the project.
In the end almost every one of us here on the forum has used the Saddledome or McMahon at least once in the past year. These facilities do get used by a broad number of people whether privately or publicly owned. I'm fine with the $245 million we gave to the new library, and the $25 million to the NMC. I would be okay with the same amount going to the sports complex.

[fusili]

Originally Posted by MalcolmTucker

The public has lots of reasons to provide private goods. I would argue that there is a market failure (whether in the case of the arena it is an incomplete market due to the merit nature of the good, a lack of information about the ability to attract tenants over time, or an equilibrium falling below the price of provision [ a form of adverse selection]) — and it doesn't matter why it exists, it just matters that it does.

I agree. The government should provide private goods when there is a market failure, but I don't see one here. What market failure is there with professional sports?

As for building a sports facility (field house or arena) for minor league sports or general recreation, I am all for that. 100%. To me a field house is just like building soccer fields or baseball diamonds or parks. But when we build an arena so it can hold 50K people, it isn't about physical activity anymore, it is about entertainment for profit. What separates this from subsidizing a monster truck show?

I don't watch sports very often. Instead I like to read, go snowboarding, drink coffee, drink wine, and go cycling. Why does a sports fan get a subsidy, but I don't?

[Big Sky]

Originally Posted by fusili

I agree. The government should provide private goods when there is a market failure, but I don't see one here. What market failure is there with professional sports?

As for building a sports facility (field house or arena) for minor league sports or general recreation, I am all for that. 100%. To me a field house is just like building soccer fields or baseball diamonds or parks. But when we build an arena so it can hold 50K people, it isn't about physical activity anymore, it is about entertainment for profit. What separates this from subsidizing a monster truck show?

I don't watch sports very often. Instead I like to read, go snowboarding, drink coffee, drink wine, and go cycling. Why does a sports fan get a subsidy, but I don't?

The same reason someone going to the Library on NMC or Jack Singer would get public funding. It might not benefit everyone, but it benefits enough people that it can be warranted.

One could debate whether there is a market failure. I'm sure there are numerous stats and figures that could put a spin on it for either side. In a nutshell it looks like the owners could build a cheap arena with their own money and the market failure is only there because they want to build something fancy. But isn't that the same thing with the library or the NMC? We could easily have built a cheap library that would be supported by library members only, but that's not the case.

[fusili]

Originally Posted by Big Sky

Fair enough. I don't disagree with the definition, just that not all things that benefit the public have to be publicly owned. If the plan was for the Flames owners to pay for the site cleanup, and be the owners of the building, I would be okay with a one time cost of public money going to the project. In the end almost every one of us here on the forum has used the Saddledome or McMahon at least once in the past year. These facilities do get used by a broad number of people whether privately or publicly owned. I'm fine with the $245 million we gave to the new library, and the $25 million to the NMC. I would be okay with the same amount going to the sports complex.

Agreed. If you think hockey games benefit the public, then I agree the arena doesn't have to be publically owned.

The issue here is that the Flames are NOT paying for the cleanup, the infrastructure or even a considerable amount of the arena. They are asking for the public to pay almost all of it, take on all the risks, and all the costs. It is complete nonsense.

PS- The Library is free. Plus, it provides information and education resources to the public. That to me is an actual public benefit: living in a society where people are educated is a benefit to everyone. Someone having internet access actually improves their economic situation in life, improves the general economy, and benefits society as a whole. Living in a society where some people like to watch hockey does not, in my opinion, have any affect on the rest of society.

[Big Sky]

Originally Posted by fusili

Agreed. If you think hockey games benefit the public, then I agree the arena doesn't have to be publically owned.

The issue here is that the Flames are NOT paying for the cleanup, the infrastructure or even a considerable amount of the arena. They are asking for the public to pay almost all of it, take on all the risks, and all the costs. It is complete nonsense.

PS- The Library is free. Plus, it provides information and education resources to the public. That to me is an actual public benefit: living in a society where people are educated is a benefit to everyone. Someone having internet access actually improves their economic situation in life, improves the general economy, and benefits society as a whole. Living in a society where some people like to watch hockey does not, in my opinion, have any affect on the rest of society.

I'm in total agreement about the cleanup costs and the public having to pay for most of it. IMO it should be a clear cut case of the owners asking for a one time funding of 'X' amount of dollars and the owners do the rest.

I'm mostly being a devils advocate here. I haven't been to a sports game in a few years, but personally I would love to go see some of the concerts that have skipped Calgary. They might not be educational, but it's more likely I would go to those concerts than I would to the library or the NMC. Different strokes for different folks

[MalcolmTucker]

Originally Posted by fusili

I agree. The government should provide private goods when there is a market failure, but I don't see one here. What market failure is there with professional sports?

As for building a sports facility (field house or arena) for minor league sports or general recreation, I am all for that. 100%. To me a field house is just like building soccer fields or baseball diamonds or parks. But when we build an arena so it can hold 50K people, it isn't about physical activity anymore, it is about entertainment for profit. What separates this from subsidizing a monster truck show?

I don't watch sports very often. Instead I like to read, go snowboarding, drink coffee, drink wine, and go cycling. Why does a sports fan get a subsidy, but I don't?

If Calgary wants a facility like the Canadian Tire Centre in Ottawa, we should leave it to the market to provide, and be prepared for that to not even be built. I am not convinced that even a 'optimal' arena only complex could be built with private support alone. Still think you'd end up a couple hundred million short.

In 20 years when the Saddledome needs a major lifecycle renovation for a couple hundred million in todays dollars, will people object to maintaining the public asset? Or will the citizenry be ok not having a large arena?

As for the rest, wine from BC is taxed at a lower rate, snowboarding benefits from land leased from the province and federal government (who knows if at economic rates - not like the leases come up for auction!), cycling has lots of public facilities provided for it.

[McMurph]

Once again I find myself hoping for a new arena for no other reason than so we can stop talking about it.

[Cowtown_Tim]

You might not use a lot of public funded facilities, but in general most people do. You have to fund sports just like you would art, literature or music. The city funds those things at all levels right up to the top level such as the new central library or the NMC. At some point I'm sure the city will chip in money for an art gallery. Should we discount that too? Even though it will only be used by %1 of the population.

Regarding this particular proposal. I agree with much of what you have said, the cleanup is a big issue that hasn't been addressed properly. If the city is to chip in, the city should get some say in how this thing is designed and built. That said, I don't have much of a problem with the principle of the city partially funding an arena.

Originally Posted by fusili

I don't watch sports very often. Instead I like to read, go snowboarding, drink coffee, drink wine, and go cycling. Why does a sports fan get a subsidy, but I don't?

[Halofire]

Originally Posted by Cowtown_Tim

You might not use a lot of public funded facilities, but in general most people do. You have to fund sports just like you would art, literature or music. The city funds those things at all levels right up to the top level such as the new central library or the NMC. At some point I'm sure the city will chip in money for an art gallery. Should we discount that too? Even though it will only be used by %1 of the population.

Regarding this particular proposal. I agree with much of what you have said, the cleanup is a big issue that hasn't been addressed properly. If the city is to chip in, the city should get some say in how this thing is designed and built. That said, I don't have much of a problem with the principle of the city partially funding an arena.

Funding art, and sports at a development level is generally accepted, and there's definitely a grey area between amateur and professional... however the NHL is well past that zone and massively profitable. Their inability to manage their own costs revenue usage is not the responsibility of the public to compensate for. If they reduced salaries by 25% to start paying for their own facilities, we wouldn't be having this discussion.

[Cowtown_Tim]

Originally Posted by Halofire

Funding art, and sports at a development level is generally accepted, and there's definitely a grey area between amateur and professional... however the NHL is well past that zone and massively profitable. Their inability to manage their own costs revenue usage is not the responsibility of the public to compensate for. If they reduced salaries by 25% to start paying for their own facilities, we wouldn't be having this discussion.

I'll refer to MalcolmTucker's statement about the Canadian Tire Centre in Ottawa. There's no doubt that there's a business case for owners to be able to afford a new arena on their own, but is there a business case for something special? We can leave it up to the owners and get an average run of the mill building like the Canadian Tire Centre or something a level up like the XL energy Centre\Rogers Arena\Consol Centre with funding help from the city. I know not everyone agrees with that idea, but I do. If the owners do it %100 themselves, we get an average arena, and no new stadium.

I couldn't care less how much profit the owners make or what the players salaries are, for me it's simple; is it worth putting in $200-300 million of taxpayer money to get a nice new arena and a new stadium? If that's what it's going to cost us to get a nice new building and a nice new stadium, then yes.

Other factors like the site cleanup change the situation of course.

[fusili]

Originally Posted by MalcolmTucker

If Calgary wants a facility like the Canadian Tire Centre in Ottawa, we should leave it to the market to provide, and be prepared for that to not even be built. I am not convinced that even a 'optimal' arena only complex could be built with private support alone. Still think you'd end up a couple hundred million short.

In 20 years when the Saddledome needs a major lifecycle renovation for a couple hundred million in todays dollars, will people object to maintaining the public asset? Or will the citizenry be ok not having a large arena?

As for the rest, wine from BC is taxed at a lower rate, snowboarding benefits from land leased from the province and federal government (who knows if at economic rates - not like the leases come up for auction!), cycling has lots of public facilities provided for it.

I drink wine exclusively from the most taxed jurisdiction, I only snowboard in my (non-existent) backyard, and I only cycle on my trainer in my condo.

[fusili]

Originally Posted by Halofire

Funding art, and sports at a development level is generally accepted, and there's definitely a grey area between amateur and professional... however the NHL is well past that zone and massively profitable. Their inability to manage their own costs revenue usage is not the responsibility of the public to compensate for. If they reduced salaries by 25% to start paying for their own facilities, we wouldn't be having this discussion.

Exactly.

I am all for facilities for amateur and recreational sports. But professional sports with a limited number of very high paid participants? No.

[craner]

Originally Posted by McMurph

Once again I find myself hoping for a new arena for no other reason than so we can stop talking about it.

Oh man - the talk hasn't even really started yet - we've got years of talking ahead.

[MichaelS]

Originally Posted by Cowtown_Tim

I'll refer to MalcolmTucker's statement about the Canadian Tire Centre in Ottawa. There's no doubt that there's a business case for owners to be able to afford a new arena on their own, but is there a business case for something special? We can leave it up to the owners and get an average run of the mill building like the Canadian Tire Centre or something a level up like the XL energy Centre\Rogers Arena\Consol Centre with funding help from the city. I know not everyone agrees with that idea, but I do. If the owners do it %100 themselves, we get an average arena, and no new stadium.

I couldn't care less how much profit the owners make or what the players salaries are, for me it's simple; is it worth putting in $200-300 million of taxpayer money to get a nice new arena and a new stadium? If that's what it's going to cost us to get a nice new building and a nice new stadium, then yes.

Other factors like the site cleanup change the situation of course.

Does the same principle apply to office towers? If a developer proposes a bland box, should the government step in and provide funding to make sure it is an architectural masterpiece?

[MalcolmTucker]

^ isn't that what the government does with bonus density? Extra density is a non monetary transfer. A regulatory giving. Happens all the time.

[suburbia]

Edmonton arena update:
https://twitter.com/EugenePski/status/663028670399823872

[Cowtown_Tim]

Originally Posted by MichaelS

Does the same principle apply to office towers? If a developer proposes a bland box, should the government step in and provide funding to make sure it is an architectural masterpiece?

Apples to Oranges. Just because they are both privately owned, an office building isn't the thing as an arena/stadium. An arena or Stadium is still going to get used by the public, whether it's privately or publicly owned. The concept is the same as chipping in for another facility like the NMC, the only difference is the ownership.

[MichaelS]

Originally Posted by MalcolmTucker

^ isn't that what the government does with bonus density? Extra density is a non monetary transfer. A regulatory giving. Happens all the time.

Not sure how often a bonus is given for exceptional design, but even so I would think increasing density for a project would be more beneficial for the city, given the likely higher assessed value of the project. Certainly not the same as Council giving them a portion of the budget or debt capacity.

Originally Posted by Cowtown_Tim

Apples to Oranges. Just because they are both privately owned, an office building isn't the thing as an arena/stadium. An arena or Stadium is still going to get used by the public, whether it's privately or publicly owned. The concept is the same as chipping in for another facility like the NMC, the only difference is the ownership.

Okay, replace office building with shopping mall. And I think a big difference with a stadium and NMC is the goal of profit. I am assuming the NMC is run as a non-profit, but if not I would have the same issue with the subsidy for it.

[Socguy]

Originally Posted by The Fisher Account

Yeah, but you and everyone here knows it's going to happen, so why keep bringing up this tired old idealistic argument? The Flames are going to get taxpayer money because no other organization is going to step in a build a new arena in this community of 1.5M people.

It's inevitable. Cross your fingers The City get's a good deal and the area gets cleaned up. But this will never be 100% privately financed, so just bend over and try to smile a bit.

It's by no means a done deal. The Edmonton deal died on the table half a dozen times before squeaking by. It only survived because they had a mayor who took a personal interest in making it work and there was a real argument that moving an arena downtown would generate redevelopment and so on.

I don't think Nenshi feels the same way as Mandel. Who is going to champion this project in city council when it's going to cost the city twice what Edmonton's did and the redevelopment argument is so thin, it's transparent?

[Halofire]

Originally Posted by Cowtown_Tim

Apples to Oranges. Just because they are both privately owned, an office building isn't the thing as an arena/stadium. An arena or Stadium is still going to get used by the public, whether it's privately or publicly owned. The concept is the same as chipping in for another facility like the NMC, the only difference is the ownership.

Originally Posted by MichaelS

Okay, replace office building with shopping mall. And I think a big difference with a stadium and NMC is the goal of profit. I am assuming the NMC is run as a non-profit, but if not I would have the same issue with the subsidy for it.

Other examples of non-office commercial operations that have 'public' customers... grocery stores, restaurants, yoga studios, and in some countries, brothels - none of which should be subsidized for a 'nice new' building...

The only way it would somewhat makes sense, is if the city would be compensated with an equity stake in the flames so that they'd potentially have a return on their investment. But a city really shouldn't be getting involved in something so far away from their mandate.

NMC, Arts Commons, Jubilee are different in that they are non-profit organizations that are entrusted balance a need to generate revenue to maintain their facilities as well as provide public services like high school graduations, amateur performance space, and artist development. The stadium's primary purpose is to host flames games, and then they schedule whatever they can to fill in the rest of the time.

I have minimal issue with government sponsorship of facilities like Max Bell Area and WinSport, because they are built to a scale which actually facilitates public use, and no single professional sports organization dictates their schedule.

I know it's not a perfect argument, but that's the grey area in-between.