Stadiums & Arenas of Canada, Part 3

[milomilo]

Originally Posted by DizzyEdge

Will the city own the event center and the land under it, or just the building?
Does owning the building make any difference other than making whoever owns it on the hook for its demolition cost in 35 years?

That, and the Flames don't pay property tax.

[Corndogger]

Originally Posted by milomilo

That, and the Flames don't pay property tax.

But the Flames are paying all of the operating and maintenance costs other than for uninsured maintenance of some type. I've yet to see what is meant by "uninsured" maintenance nor why something wouldn't be insured.

[240glt]

Originally Posted by Corndogger

But the Flames are paying all of the operating and maintenance costs other than for uninsured maintenance of some type. I've yet to see what is meant by "uninsured" maintenance nor why something wouldn't be insured.

I’m guessing that’s referring to lifecycle or capital equipment replacement costs

It’s a bad deal because it gives no incentive to maintain the facility properly with no penalty for running the place into the ground. Edmonton signed a similar deal for the arena up here.

[Corndogger]

Originally Posted by 240glt

I’m guessing that’s referring to lifecycle or capital equipment replacement costs

It’s a bad deal because it gives no incentive to maintain the facility properly with no penalty for running the place into the ground. Edmonton signed a similar deal for the arena up here.

The City of Calgary is responsible for those "uninsured" maintenance costs. So, no, the place won't be run into the ground. Is it a bad deal? Without knowing what's meant by "uninsured maintenance," it could be a horrible deal or nothing to worry about.

[240glt]

^ I told you. Uninsured maintenance costs are likely another way of saying capital replacement costs. Those costs are never insured.

Think of it this way: if you were responsible for maintenance on a refrigeration unit bit not responsible for it’s replacement would you be signing a quarterly service contract with the units’ manufacturer, perfroming bi-yearly oil and refrigerant lab analysis, Eddy current testing and vibration analysis and doing a 3 year tear down to punch the tubes ? Or would you be more likely to hit the start button and let’er run till it dies, knowing someone else is responsible for replacing the machine. I work in this field and see this stuff all the time.

[Corndogger]

Originally Posted by 240glt

^ I told you. Uninsured maintenance costs are likely another way of saying capital replacement costs. Those costs are never insured.

Think of it this way: if you were responsible for maintenance on a refrigeration unit bit not responsible for it’s replacement would you be signing a quarterly service contract with the units’ manufacturer, perfroming bi-yearly oil and refrigerant lab analysis, Eddy current testing and vibration analysis and doing a 3 year tear down to punch the tubes ? Or would you be more likely to hit the start button and let’er run till it dies, knowing someone else is responsible for replacing the machine. I work in this field and see this stuff all the time.

As long as the City prepares for such costs things should be fine. With our current council and especially administration disaster is a distinct possibility. Hopefully they'll be long gone by the time the arena is built.

[blueandgoldguy]

Originally Posted by Chadillaccc

That was also back in the days of rampant crony capitalism wherein the Stampede Board basically ruled the city government, allowing for the entire neighbourhood of Victoria Park to be razed to facilitate the expansion of Stampede Park. This has only began to be reversed over the past ten years as high density skyscrapers have begun to be constructed throughout the area.

Comparing those days, and the economic model of the Saddledome, to today and the model being used for this development is like comparing apples to.... I dunno... bricks? Completely useless comparison, regardless.

So it is a change in policies at the civic level that are allowing development to happen in the area. Interesting...guess a new arena is not the impetus for economic development after all.

[Calgarian]

IS flooding an insured cost? The Saddledome had millions of dollars in damage in 2013, think they had to rewire most of the lower part of the building.

[Chadillaccc]

Originally Posted by Calgarian

IS flooding an insured cost? The Saddledome had millions of dollars in damage in 2013, think they had to rewire most of the lower part of the building.

I'd imagine a significant cost of this new arena will be automated flood protection.

[technomad]

Originally Posted by Calgarian

IS flooding an insured cost? The Saddledome had millions of dollars in damage in 2013, think they had to rewire most of the lower part of the building.

this is partly why I think waterpark conversion for Saddledome is the way to go, half the work is already done!

[milomilo]

Originally Posted by blueandgoldguy

So it is a change in policies at the civic level that are allowing development to happen in the area. Interesting...guess a new arena is not the impetus for economic development after all.

It was some sort of assholery by the stampede corporation that caused the desolation of Victoria park in the first place, so it's a a bit rich that now another corporation is being hailed as a savior of the land, and stands to profit from it's renewal. AFAIK CSEC has the right of first refusal to buy some of the city's land there as part of the deal.

The city can choose to use taxation policy to regenerate any area it likes, such as with the east village. A new arena will help for sure, just not nearly enough to justify $290m on a financial basis.

[Corndogger]

Originally Posted by milomilo

It was some sort of assholery by the stampede corporation that caused the desolation of Victoria park in the first place, so it's a a bit rich that now another corporation is being hailed as a savior of the land, and stands to profit from it's renewal. AFAIK CSEC has the right of first refusal to buy some of the city's land there as part of the deal.

The city can choose to use taxation policy to regenerate any area it likes, such as with the east village. A new arena will help for sure, just not nearly enough to justify $290m on a financial basis.

The City's invested a lot more than that in the East Village area and they claim it's successful. Other than this and transit "enhancements" what else will the City be investing in the area? CSEC will end up investing a lot more than $290 million in the area as will other players. If the area is developed and marketed properly it should be successful.

[milomilo]

Since 2007, CMLC has committed approximately $396 million to East Village infrastructure and development programs. This, in turn, has attracted nearly $3 billion of planned development (so far). In turn, residential property assessments in the Rivers District have increased from $328 million to approximately $1.2 billion, while non-residential assessments have gone from $647 million and $1.8 billion.

This too is really just moving money around, so I don't know if whatever tax subsidy the city put in was worth it, but the numbers at least sound better than what we get out of the arena deal.

[Corndogger]

Originally Posted by milomilo

This too is really just moving money around, so I don't know if whatever tax subsidy the city put in was worth it, but the numbers at least sound better than what we get out of the arena deal.

They only sound better because they've had time to attract development. We need to wait and see what happens with this project before declaring it bad. The $396 million (?) figure you quoted sounds way too low. The library alone was close to $300 million.

[milomilo]

It doesn't matter regardless, both are examples of money simply being focused in specific places. It's not extra money for the city.

[Calgarian]

Originally Posted by Chadillaccc

I'd imagine a significant cost of this new arena will be automated flood protection.

I'm quite sure that they are going to be taking flooding into account in the design, however that would still likely qualify as uninsured maintenance costs in the event they do get flooded.

[Djeffery]

Originally Posted by Calgarian

I'm quite sure that they are going to be taking flooding into account in the design, however that would still likely qualify as uninsured maintenance costs in the event they do get flooded.

I've never been to Calgary, so I don't know first hand, but what's the terrain like around the arena? It looks to me in pictures like ground level on the north side is higher than the south side, where the floodwaters entered the arena through the service areas. How flooded did that area on the north side where the new arena is planned get? It almost looks to me like that loading dock area on the south side is shaped like a funnel from the river to the arena and directed the floodwater to the arena.

Perhaps the design of the new will place the lower level access away from the river and maybe use landscaping features to provide some further protection should that area flood again like 2013.

[milomilo]

They could probably just use the highly advanced technology of building a berm/walls higher than the flood level. It isn't rocket science.

[Corndogger]

People keep posting that the Flames are one of the highest revenue teams in the NHL and that they make a ton of money at the Saddledome. That's not the case according to a Forbes article on the new arena.
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The Flames currently play in the antiquated Scotiabank Saddledome. During the 2017–2018 season, the team posted revenue of $132 million, 20th in the 31-team league. In December, Forbes valued the Flames at $450 million, the 20th-most-valuable team in the NHL.

Arena revenue is crucial in the NHL because it is not shared among the teams, and the league’s shared revenues—notably national television and sponsorship proceeds—are small compared with those of the NFL, the NBA and MLB.

During the 2017–2018 season, the Flames took in about $35 million from premium seating and non-NHL events at their current arena. In contrast, the Edmonton Oilers, who moved into their new arena in 2016, generated some $47 million. The value of the Flames could easily increase by 15% if the new arena is successful in getting sponsors.

Note: All figures are in U.S. dollars.

Source: https://www.forbes.com/sites/mikeoza.../#2f0f9951763b

[wave46]

Originally Posted by Corndogger

People keep posting that the Flames are one of the highest revenue teams in the NHL and that they make a ton of money at the Saddledome. That's not the case according to a Forbes article on the new arena.
___________________________
https://www.forbes.com/sites/mikeoza.../#2f0f9951763b

NHL Team Profitability

Well, the Flames profit $11m USD on revenue of $132m USD (so, about $171m CAD), so that's a rate of return of about 8.3% in 2017.

Edmonton, with its new shiny arena, did about $21m that year.

So, it'll cost the taxpayers somewhere between $100m-150m to improve CESC's profit by $10m yearly.