New Downtown Calgary Arena

[esquire]

Originally Posted by MalcolmTucker

Every year there is a gap the city would be out of pocket at least $10 million, plus any larger life cycle or capital improvements to the building that come up.

What is the $10 million figure based on?

[MalcolmTucker]

Originally Posted by esquire

What is the $10 million figure based on?

In the 90s the city did a report and said that if the Flames left the city would have obligations of $6 million a year iirc to keep the Dome available for rentals.

[esquire]

^ So the Flames carry those costs right now?

[patm]

Originally Posted by esquire

If the Flames left, it would be just a matter of months before they were replaced with a relocated or expansion team. Playing in Calgary, even if it is in the Saddledome, is still probably a better deal than what some existing NHL markets can provide an owner.

That's why the threat is so hollow... everyone knows that if the Flames act on the threat, another team would jump into the market right away. There would be no Winnipeg-style 15 year gap in NHL hockey.

Disagree. No chance a team comes here without a new arena. Zero.

No one will ever build an arena with private funds in Calgary, especially with how grim things are looking economically long term.

No buyer will buy the team for them to continue to play in the Saddledome.

The team will move to a market where they can get a brand new building for free and no team will come back here until an arena is built.

The city will continue having to maintain the Saddledome until they no longer can at which point they will build their own arena anyways.

As long there are viable markets willing to provide the Flames home with public money, they have the leverage.

Personally I think they will get some public money and the Flames don't actually have the appetite to move as they're still quite profitable. Should that profitability start to decline with the Calgary market, this will change.

[esquire]

Originally Posted by patm

Disagree. No chance a team comes here without a new arena. Zero.

No one will ever build an arena with private funds in Calgary, especially with how grim things are looking economically long term.

No buyer will buy the team for them to continue to play in the Saddledome.

The team will move to a market where they can get a brand new building for free and no team will come back here until an arena is built.

The city will continue having to maintain the Saddledome until they no longer can at which point they will build their own arena anyways.

As long there are viable markets willing to provide the Flames home with public money, they have the leverage.

Personally I think they will get some public money and the Flames don't actually have the appetite to move as they're still quite profitable. Should that profitability start to decline with the Calgary market, this will change.

If Winnipeg, a much smaller market, went through a scenario where government refused to provide the team with a free arena and the team left, after which the private sector then built its own (with government assistance, but still less than 1/3 of the total cost) and brought a team back, what on earth makes you think that Calgary -- a much more attractive market if you're an owner -- wouldn't be able to do the same?

The reality is that even if some random market where hockey is an afterthought can offer up an amazing arena for free, none of those places are going to dump as much money into a NHL team as Calgary will.

There is some serious Stockholm Syndrome going on here.

[240glt]

Seems to be the way things are going. Billionaire owners looking for the general public to cover costs of building these new arenas as "public infrastructure" and then monopolizing all the use and revenue for their own gains.

Edmonton's deal is so bad, the only reason it went through was with promises of "downtown revitalization" (a very popular motive.. they've been trying to do this since the 70's) Calgary's downtown doesn't require that kind of welfare, I hope the city stands up to these bullies. Flames ain't going anywhere. Don't let them sucker you like they suckered Edmontonians

[geotag277]

Originally Posted by esquire

^ So the Flames carry those costs right now?

For the record, Calgary covers Saddledome's annual maintenance costs, in a deal that was strong armed by current Flames owners, to the tune of 1.3 million a year.

The CalgaryNEXT West Village report is probably the most up to date source of numbers regarding forgone revenue, costs, and so on. Among the figures in this report, include 1.7 million a year on forgone property tax.

So probably approximately 3 million a year the city is effectively paying already.

I couldn't really find any numbers concerning the revenue for tickets, but this source has Saddledome at about 150k a year in concert ticket sales. If the average price is $50 a ticket for those, you are looking at about 7.5 million in total revenue, 20% of which as a facility charge means 1.5 million revenue for Saddledome operators. In contrast, Rexall Place sold twice the number of ticket, so is looking at 3 million in revenue, potentially a new Calgary arena could do similar (this is not even considering concessions sales which would likely double the revenue alone).

It seems to me, the city could do fine by going it alone to build an arena for concerts, and own and operate it themselves. If a sports franchise wants to use the arena for hockey, it seems to make financial sense for the city to simply charge them rental fees on top of it.

It seems to me, there is rather a simple path forward for a fair deal regarding the arena that benefits the city, the problem is that the deal being proposed simply isn't good enough. That all the backhanded talk about "we aren't appreciated" and "we will just leave" and "we don't feel welcome" seems all the more disingenuous considering the Flames enjoy very high attendance rates and high merchandise sales.

If such a strong base of local support isn't enough to "make you feel welcome", don't let the door hit your behind on the way out. I can see Calgary being particularly proud of being the city which stood up to these backhanded shenanigans because it simply wasn't a good deal for us.

[MichaelS]

Originally Posted by geotag277

For the record, Calgary covers Saddledome's annual maintenance costs, in a deal that was strong armed by current Flames owners, to the tune of 1.3 million a year.

The CalgaryNEXT West Village report is probably the most up to date source of numbers regarding forgone revenue, costs, and so on. Among the figures in this report, include 1.7 million a year on forgone property tax.

So probably approximately 3 million a year the city is effectively paying already.

I couldn't really find any numbers concerning the revenue for tickets, but this source has Saddledome at about 150k a year in concert ticket sales. If the average price is $50 a ticket for those, you are looking at about 7.5 million in total revenue, 20% of which as a facility charge means 1.5 million revenue for Saddledome operators. In contrast, Rexall Place sold twice the number of ticket, so is looking at 3 million in revenue, potentially a new Calgary arena could do similar (this is not even considering concessions sales which would likely double the revenue alone).

It seems to me, the city could do fine by going it alone to build an arena for concerts, and own and operate it themselves. If a sports franchise wants to use the arena for hockey, it seems to make financial sense for the city to simply charge them rental fees on top of it.

It seems to me, there is rather a simple path forward for a fair deal regarding the arena that benefits the city, the problem is that the deal being proposed simply isn't good enough. That all the backhanded talk about "we aren't appreciated" and "we will just leave" and "we don't feel welcome" seems all the more disingenuous considering the Flames enjoy very high attendance rates and high merchandise sales.

If such a strong base of local support isn't enough to "make you feel welcome", don't let the door hit your behind on the way out. I can see Calgary being particularly proud of being the city which stood up to these backhanded shenanigans because it simply wasn't a good deal for us.

Based on how the property tax system actually works, is it fare to say it is foregone property tax revenue? Or, is it more accurate to say that 1.7 million in property taxes is currently being charged across all other assessed properties in the City, and adding this arena to this property will maintain the existing property tax revenues received by The City of Calgary, and slightly reduce the property tax burden on all of the other assessed properties within the City limits?

[patm]

Originally Posted by esquire

If Winnipeg, a much smaller market, went through a scenario where government refused to provide the team with a free arena and the team left, after which the private sector then built its own (with government assistance, but still less than 1/3 of the total cost) and brought a team back, what on earth makes you think that Calgary -- a much more attractive market if you're an owner -- wouldn't be able to do the same?

The reality is that even if some random market where hockey is an afterthought can offer up an amazing arena for free, none of those places are going to dump as much money into a NHL team as Calgary will.

There is some serious Stockholm Syndrome going on here.

Winnipeg built an arena that was too small for the NHL, still got public money and brought the team back on the back of a crazy owner who was okay with the fact that the team needs to sell out every game to make profit. Do you think that is a normal situation?

Seattle and Quebec could match Calgary no issue. Seattle has the market size and Quebec has the Canadian fandom. Lets not pat ourselves on the back too much. This team was on it's last legs prior to '04 and the economic climate in Calgary is falling to levels that are even less favorable than the 90's. TV viewership and attendance has been trending down (although still really high) so while Calgary is definitely a strong hockey market, it's not some golden goose that no market could compare to.

Frankly, this ownership group has so much invested in the Alberta economy I'm not surprised they're not lining up to sink another half a billion into a real estate project here.

In the end this is all moot. The city will give some money and the owners are hardly jonesing to move. No rush to figure it out yet.

[suburbia]

Originally Posted by patm

Disagree. No chance a team comes here without a new arena. Zero.

Zero chance the earth is round. Zero.

They also cannot leave because of the Rogers' agreement, which requires the three Western Canadian markets.

Thought it was interesting that Burke also suggested that hockey players should get a tax break.

[geotag277]

Originally Posted by patm

Frankly, this ownership group has so much invested in the Alberta economy I'm not surprised they're not lining up to sink another half a billion into a real estate project here.

I have to agree, and combined with the struggling overall economic climate, and the city itself struggling a bit with finances, it seems like an absurdly bad time to be pressing the issue and making (un)veiled threats to live under the guise of "not being appreciated".

The Flames ownership group has contributed greatly to the Calgary economic landscape, but it is phenomenally tone deaf and oddly disconnected from the economic reality to be banging the drums about a new arena at this point in time.

[MalcolmTucker]

Originally Posted by geotag277

For the record, Calgary covers Saddledome's annual maintenance costs, in a deal that was strong armed by current Flames owners, to the tune of 1.3 million a year.

The CalgaryNEXT West Village report is probably the most up to date source of numbers regarding forgone revenue, costs, and so on. Among the figures in this report, include 1.7 million a year on forgone property tax.

So probably approximately 3 million a year the city is effectively paying already.

I couldn't really find any numbers concerning the revenue for tickets, but this source has Saddledome at about 150k a year in concert ticket sales. If the average price is $50 a ticket for those, you are looking at about 7.5 million in total revenue, 20% of which as a facility charge means 1.5 million revenue for Saddledome operators. In contrast, Rexall Place sold twice the number of ticket, so is looking at 3 million in revenue, potentially a new Calgary arena could do similar (this is not even considering concessions sales which would likely double the revenue alone).

It seems to me, the city could do fine by going it alone to build an arena for concerts, and own and operate it themselves. If a sports franchise wants to use the arena for hockey, it seems to make financial sense for the city to simply charge them rental fees on top of it.

It seems to me, there is rather a simple path forward for a fair deal regarding the arena that benefits the city, the problem is that the deal being proposed simply isn't good enough. That all the backhanded talk about "we aren't appreciated" and "we will just leave" and "we don't feel welcome" seems all the more disingenuous considering the Flames enjoy very high attendance rates and high merchandise sales.

If such a strong base of local support isn't enough to "make you feel welcome", don't let the door hit your behind on the way out. I can see Calgary being particularly proud of being the city which stood up to these backhanded shenanigans because it simply wasn't a good deal for us.

Well, in the Herald it was:

The Saddledome Foundation will use the $1.3 million to cover capital maintenance while another $1.3 million will be generated from ticket surcharges at Saddledome events.

The team and the foundation are seeking the remaining $1.3 million from the province, over and above the money generated from the lottery, but it remains the responsibility of the Flames, said team spokesman Peter Hanlon.

So, $4.9 million.

From another Herald piece:

The money will help offset a $3.9-million deficit the team incurs on the building each year

This was in exchange for:

20 per cent of any profits from Saddledome operations given to the city

This was a change to the deal, that replaced the original 20 year lease, that the Flames gave the Stampede Board $20 million to buy out.

[suburbia]

Originally Posted by geotag277

I couldn't really find any numbers concerning the revenue for tickets, but this source has Saddledome at about 150k a year in concert ticket sales. If the average price is $50 a ticket for those, you are looking at about 7.5 million in total revenue, 20% of which as a facility charge means 1.5 million revenue for Saddledome operators.

The "horse" has told me that the concert / entertainment portfolio of the organization did $60M in 2015. The pieces include 1.) tickets, 2.) sponsorships, 3.) concessions, and #4.) other things. You've underestimated #1, #2 & #3 are massive, and #4 is unknown. The scenario is like in new car sales. The sad story is always that the percentage profit on a new car is so small, but the money actually is in financing and maintenance. When making the sale the dealer is not going to offer up #2 and #3. It is not that the Flames say lies, but reality is, they are not providing the whole story. The profit proposition for them is already massive, and will get bigger. The proposition for the City is horrible. And for them to say the players need a tax break on salaries is unfathomable.

[milomilo]

Originally Posted by Luk_o

If that's true then why did Winnipeg and QC go through the trouble of building new arenas and fight so hard to bring hockey back to their cities after they lost their teams? I can guarantee you the majority of people in those cities prefer having their teams in town than not. Its not just economic fortune, which I would argue is far from negligible - It significantly adds to the culture of a city, especially in Canada. In my time living in Calgary, I have never seen a bigger public celebration with 10's of thousands of people flooding the streets than when the Flames are in the playoffs - You don't get that without a professional sports franchise - It's undeniable whether a fan or not. Imagine any major N.American city without their 'nonsense' professional sports teams. Flames also pour millions of dollars back into the community every year.

Also, aside from the Flames, a new arena also gives us a proper modern venue to host any concert.

So every few years we might get a couple of weeks where 17th Ave gets busy on a few nights of the week until the team eventually loses. Woopdy do. You make it sound like a big deal but it really isn't. When you look at other cities, do you really think people look at them and go 'ah yes that's a great city because of their sports corporations'?.

I've yet to find any evidence that spending the type of money the Flames wants us to spend is justified by economics, given the evidence we have seen in other cities. If you can find anything to indicate otherwise, please post it. I'm completely fine with spending some public money on an arena given the other functions they have, but it has to be a good deal for the city.


BTW, I encourage everyone to watch the interview with this patronising prick:

• Video Link

You can really tell how little these teams have to work for their money and the uncompetitive nature of this market. If an executive of any other major company came out with an interview like this one the press would be all over them and they'd get fired. Not so with sports teams, where it's OK to belittle the city you are trying to do business in.

[MalcolmTucker]

is justified by economics

It isn't, at least if you define economics as profit making activity, or generating outsized spin offs.

It is in the sense that if arenas exist and then there are way more opportunities to host activities that require arenas, and those activities have value to people that is not recoverable as dollars, so a market failure exists, justifying government intervention.

[milomilo]

Originally Posted by MalcolmTucker

It isn't, at least if you define economics as profit making activity, or generating outsized spin offs.

It is in the sense that if arenas exist and then there are way more opportunities to host activities that require arenas, and those activities have value to people that is not recoverable as dollars, so a market failure exists, justifying government intervention.

That's fine, as I said I'm fine with some public money being used, but it has to be a good deal for the city.

If the Flames did leave, is it completely impossible to have an arena for concerts etc? I remember back in the UK every moderately sized (500,000+) city had somewhere suitable, but then again the surrounding population density was higher.

[MalcolmTucker]

Originally Posted by milomilo

That's fine, as I said I'm fine with some public money being used, but it has to be a good deal for the city.

If the Flames did leave, is it completely impossible to have an arena for concerts etc? I remember back in the UK every moderately sized (500,000+) city had somewhere suitable, but then again the surrounding population density was higher.

Probably not for less than a potential contribution to a new Flames arena.

You just need to get around to the fact that an arena is something that is good for the city to have, and that if we didn't have one, we would probably build one, even if less fancy and more tuned to the specialty needs of hosting concerts.

In Calgary's case, one needs to get to the point that at some point we will either have to replace our arena with a not up to standard roof, or renew it and still have an arena with a not up to standard roof.

This might be 10 years earlier than the city would make this investment on its own, but it isn't a bad deal, if the city can hold its contribution down to below $100m or so direct.

[esquire]

Originally Posted by MalcolmTucker

Probably not for less than a potential contribution to a new Flames arena.

Who says there needs to be a new arena just for concerts? People are commenting here like having Selena Gomez or Garth Brooks play a show in a venue capable of handling every conceivable form of stage rigging is some kind of essential municipal service.

If Flames' ownership doesn't want to take the lead on a new arena, the sensible thing to do would be to just keep using the Saddledome until someone willing to build a new rink inevitably comes along.

[MalcolmTucker]

Originally Posted by esquire

Who says there needs to be a new arena just for concerts? People are commenting here like having Selena Gomez or Garth Brooks play a show in a venue capable of handling every conceivable form of stage rigging is some kind of essential municipal service.

If Flames' ownership doesn't want to take the lead on a new arena, the sensible thing to do would be to just keep using the Saddledome until someone willing to build a new rink inevitably comes along.

Governments fund all sorts of non essential things. And 'inevitably comes along' could be never. Certainly few places with similar populations have privately funded arenas.

[patm]

Who on earth would build a privately funded arena without a tenant in a city of 1.4 million where the only major industry is on life support.

Unless you think the Saddledome will last decades without major investment, this city will be building a publicly funded arena whether the Flames are involved or not. Calling the Flames bluff and letting them move just delays it 10-20 years (and means the city incurs the increasing costs of running an ancient building over that time).