New Downtown Calgary Arena

[craner]

It's quite disappointing to see these negotiations turn into such an adversarial bitch fest. When rumours and hints of a new arena plus a new stadium began floating around 4? years ago, I was so excited. With the Oilers in the midst of their acrimonious fight with the City of Edmonton to get funding for a new building at the time, I thought to myself: "The Flames ownership is so classy & respected, we won't have to go through the usual quagmire you see in other cities for our new facilities."

I really thought the Flames would offer to pony up for most of the cost with the City just needing to provide the land and related servicing upgrades. Boy was I wrong. Flames ownership is appearing to be as greedy as all those others who have gone before in other cities.

For the City's part, particularly Mayor Nenshi, they were so cold to the idea right from the beginning, it really bothered me. They seemed to take a stand-offish approach and didn't want a new arena and/or stadium. I wasn't totally surprised by this but I was angered by the negative attitude and thought the City (again, the Mayor) could have exuded a more encouraging tone and still got his "public benefit" point across.

So now, instead of being proud of my team and my City for showing Canada & the US "how it's done", it's turned into the same old same old battle.

After seeing the City's proposal this week and subsequent reaction from the Flames, I'm now of the feeling that ownership are pouting children. And why would they bring in Bettman to help their cause in the public eye - don't they know that's going to have the opposite affect ?

Anyway, sorry for the rant, just had to get that out, I'm stepping down now.

[ggopher]

The other piece not mentioned is the naming rights to the building. In Toronto Scotiabank is paying $800 million for 20 year rights to the former AC Center.

In Calgary there is no way we could get that much. But $100-$200 million would be reasonable. Why can't we identify that portion as another party contributing to the arena. It is because the Flames have already earmarked that as "their" money.

I am a huge Flames fan and season ticket holder. But the ownership group is just a bunch of whiners who want it all their way. Of course you should have to pay property tax on your building. Just because some other cities don't or you didn't have to in the Saddledome doesn't make it unfair.

[Doug]

Originally Posted by CrossedTheTracks

That part I can accept, actually. To a point. Even under city proposal, Flames organization gets all revenue from all events. So... whether the cost of the arena is 100% "hidden" in increased ticket prices, or partially exposed in an explicit "ticket tax", really doesn't make a difference in the end.

Flames and other events will charge what they believe the market will pay - let's say that's $100 a seat, for the sake of argument. If there's a required $10 ticket tax, they're really going to charge $90, it's still $100. If there's no ticket tax, they'll still charge $100, because they think people will pay it.

Where his argument loses steam is... ok, suppose the city ponies up an additional <whatever> instead of a ticket tax. Well, Flames are still going to try to charge $100 anyway. So now you've made more through property taxes, and you're still paying $100 for your ticket. Ugh.

I wish they'd keep the ticket tax out of the discussion, it really just muddies up the waters. Either way, the ticket buyers ultimately pay for the ticket tax AND the Flames' portion. If somebody other than the Flames were going to operate the arena, or if there were multiple distinct users of the arena making a contribution, it might make sense. Here it just makes the pie charts look different.

Except who takes on the debt for the contribution to be covered by the ticket tax? If it is the City, both sides are being disingenuous.

[msmariner]

Originally Posted by CrossedTheTracks

That part I can accept, actually. To a point. Even under city proposal, Flames organization gets all revenue from all events. So... whether the cost of the arena is 100% "hidden" in increased ticket prices, or partially exposed in an explicit "ticket tax", really doesn't make a difference in the end.

Flames and other events will charge what they believe the market will pay - let's say that's $100 a seat, for the sake of argument. If there's a required $10 ticket tax, they're really going to charge $90, it's still $100. If there's no ticket tax, they'll still charge $100, because they think people will pay it.

Where his argument loses steam is... ok, suppose the city ponies up an additional <whatever> instead of a ticket tax. Well, Flames are still going to try to charge $100 anyway. So now you've made more through property taxes, and you're still paying $100 for your ticket. Ugh.

I wish they'd keep the ticket tax out of the discussion, it really just muddies up the waters. Either way, the ticket buyers ultimately pay for the ticket tax AND the Flames' portion. If somebody other than the Flames were going to operate the arena, or if there were multiple distinct users of the arena making a contribution, it might make sense. Here it just makes the pie charts look different.

I don't really agree with you explanation. The ticket surcharge will be very similar to what Ticketmaster puts on every event. If a ticket is $100, then the ticket surcharge will be $10, TM surcharge of $15 plus GST. Making the final price aroun $130 ish. The Flames get their usual chunk and every other partner takes their share.

[suburbia]

Originally Posted by CrossedTheTracks

Flames and other events will charge what they believe the market will pay - let's say that's $100 a seat, for the sake of argument. If there's a required $10 ticket tax, they're really going to charge $90, it's still $100. If there's no ticket tax, they'll still charge $100, because they think people will pay it.

No - it is more like the airline model where it is clear that there is an airport improvement fee. It is made super clear by the airline, and while it is part of the price you pay, you know the airline doesn't take any of that. Same thing with GST when you go to the store. You pay a $1.05 for a $1 coffee, and you know very clearly that the GST portion does not remain with the store and is not the price. Same with buying a ticket at Ticketmaster. You know very well that the concert is selling a ticket for let's say $90 and you're paying $12 on that as a service fee that is absorbed by Ticketmaster and the folks producing the concert do now see any of that.

[EDIT]

Just read msmariner's post with the same Ticketmaster example. I think it is pretty clear.

[suburbia]

Originally Posted by Corndogger

The LRT station, etc. have nothing to do with the new arena.

The alignment and integration absolutely have everything to do with the arena.

[suburbia]

https://beta.theglobeandmail.com/opinion...ay-up-or-well-drop-dead/article36281875/

Yes, gullible politicians in U.S. cities regularly offer even more generous packages to pro sports franchises. But smart, responsible stewards of the public purse here have nothing to gain from imitating fools.
<>
The city offers the sky; the team wants them to throw in the stars and the oceans and the mountains, too.

The Flames don't wish to pay any rent or property tax. They want free transit for fans on game night and not to pay for a police presence. In addition, they would very much enjoy having what sounds suspiciously like a veto over the eventual development of the area around the new barn.

Here's a foolproof way to control a project: Pay for it.

[CrossedTheTracks]

Originally Posted by msmariner

I don't really agree with you explanation. The ticket surcharge will be very similar to what Ticketmaster puts on every event. If a ticket is $100, then the ticket surcharge will be $10, TM surcharge of $15 plus GST. Making the final price aroun $130 ish. The Flames get their usual chunk and every other partner takes their share.

Yes, that's how a ticket tax would work, no argument there.

What I'm saying is this: suppose Flames paid 66.7% straight up, no ticket tax as part of the initial deal. And suppose that paying this off in X years requires charging users an average of $20 per ticket. Not just hockey tickets; every ticket to every event, because Flames operate the place and (try to) set prices for everybody renting the arena.

They can either bury those $20 in every ticket price. Or they can split off any amount of that, and call it a ticket tax.

Does it REALLY matter whether they split it off and show it separately? At the margins, it probably matters a little bit. Probably a bit of different psychology of "ticket price" vs. "total price at the very final screen". But surely I can't be the only person who's gotten to the final Ticketmaster screen and "said HOLY CRAP! I'm not paying that much, I need to find a cheaper seat."

Same dollars coming from the same person, ending up in the same organization, notwithstanding financing, etc.

Originally Posted by Doug

Except who takes on the debt for the contribution to be covered by the ticket tax? If it is the City, both sides are being disingenuous.

If there was any sense in the world, the ticket tax would include its own debt financing cost. Just the same as one's monthly mortgage payment is a mix of interest & principle. I do not claim that either the city's or Flames' proposals contain any such sense

[suburbia]

Originally Posted by CrossedTheTracks

Yes, that's how a ticket tax would work, no argument there.

What I'm saying is this: suppose Flames paid 66.7% straight up, no ticket tax as part of the initial deal.

What an explicit tax does is peel off the funds off the top and they do not go through the Flames at all. They are paid directly from ticket purchasers to the city. It is just like ticket master. The entity running the concerts (or in this case the hockey games) doesn't see the funds at all. It does not show up in their finance sheet anywhere. The Flames suggesting it is something that would be coming "from them" is 100% false. The only people pushing that false story will be the liars and the uneducated imbeciles.

[Doug]

Originally Posted by CrossedTheTracks

Yes, that's how a ticket tax would work, no argument there.

What I'm saying is this: suppose Flames paid 66.7% straight up, no ticket tax as part of the initial deal. And suppose that paying this off in X years requires charging users an average of $20 per ticket. Not just hockey tickets; every ticket to every event, because Flames operate the place and (try to) set prices for everybody renting the arena.

They can either bury those $20 in every ticket price. Or they can split off any amount of that, and call it a ticket tax.

Does it REALLY matter whether they split it off and show it separately? At the margins, it probably matters a little bit. Probably a bit of different psychology of "ticket price" vs. "total price at the very final screen". But surely I can't be the only person who's gotten to the final Ticketmaster screen and "said HOLY CRAP! I'm not paying that much, I need to find a cheaper seat."

Same dollars coming from the same person, ending up in the same organization, notwithstanding financing, etc.



If there was any sense in the world, the ticket tax would include its own debt financing cost. Just the same as one's monthly mortgage payment is a mix of interest & principle. I do not claim that either the city's or Flames' proposals contain any such sense

Ultimately who is on the hook if the ticket tax generates insufficient revenue? Would the creditor foreclose on the building?

[Socguy]

I think there are a few facts that always need to remain in the front of our minds that the spin doctors will desperately try to make us forget:

1. The City is entirely in the drivers seat here.

There is no credible threat that the Flames would ever leave, new arena or not. They make money hand over fist at the 'dome as is and they have nowhere to go that would be more lucrative.

2. The City does not NEED a new arena. A new arena is a luxury for those who can afford it.

The Saddledome still functions as intended when it was built and will continue to do so for the forseeable future. Despite protestations to the contrary; the Flames make money hand over fist playing there... Likely far more profit than the paltry 18-20M that gets thrown around from time to time. If they actually were teetering on the edge of insolvency it seems strange that they wouldn't open their books in a confidential setting to prove their case... Still, no question that a new arena will allow them to make even more money. It will also slightly expand it's capability to potentially draw in a few extra events.

3. The ownership are billionaires.

Most of whom could afford to build the arena out of their own pocket but they won't because they didn't get that way by playing nice. They are asking for a handout of public tax dollars to build themselves a bigger, badder, revenue generating machine and, from the details trickling out, heavy subsidization to operate it. The cities only incentive to work with them to build a new arena is to have a bigger say in a major piece of infrastructure in order to better integrate it. However, it is important that the city stare these clowns down since the City holds all the leverage and the billionaires only have bluster. If these guys want to bring the City on board as an investor in their profit machine then the City needs to see its investment paid back.

4. The actual arena is only part of the payday the ownership is going for.

The real bonanza is the real estate play around the arena. This is why they were so keen on the West Village location. Plenty of land for them to exploit.

[ggopher]

Well said. I completely ageee.

[suburbia]

Media just posted a very good interview that encapsulates the realities here:
http://www.cbc.ca/news/canada/calgary/victor-matheson-flames-arena-1.4293228

Direct to video player:
http://www.cbc.ca/player/play/1047910467876/

[jeffwhit]

Originally Posted by suburbia

What an explicit tax does is peel off the funds off the top and they do not go through the Flames at all. They are paid directly from ticket purchasers to the city. It is just like ticket master. The entity running the concerts (or in this case the hockey games) doesn't see the funds at all. It does not show up in their finance sheet anywhere. The Flames suggesting it is something that would be coming "from them" is 100% false. The only people pushing that false story will be the liars and the uneducated imbeciles.

Their completely transparent logic is that if they didn't have to use the ticket tax to pay for a portion of the arena, they would just raise ticket prices more and keep that amount themselves as revenue. Seriously.

Katz successfully included ticket tax as an owner contribution in Edmonton.

[mytwocents]

Originally Posted by bt04ku

This exchange pretty much sums up the day well

https://twitter.com/meyer_lucas/status/908770098868973569

That was some serious rambling Trump-esque nonsense of beating around the question hoping to find the right answer.

[milomilo]

Originally Posted by suburbia

What an explicit tax does is peel off the funds off the top and they do not go through the Flames at all. They are paid directly from ticket purchasers to the city. It is just like ticket master. The entity running the concerts (or in this case the hockey games) doesn't see the funds at all. It does not show up in their finance sheet anywhere. The Flames suggesting it is something that would be coming "from them" is 100% false. The only people pushing that false story will be the liars and the uneducated imbeciles.

Was there not also another reason to put on a surcharge, something along the lines that if it was just included in the price, it would affect (increase) the salary they would have to pay their players somehow. Someone correct me if I'm wrong.

The ticket price will be going up either way though, as I'm sure the Flames will be taking advantage of increased demand for a nicer arena, and to characterize this as the Flames paying is dishonest.

[CrossedTheTracks]

Originally Posted by milomilo

Was there not also another reason to put on a surcharge, something along the lines that if it was just included in the price, it would affect (increase) the salary they would have to pay their players somehow. Someone correct me if I'm wrong.

The ticket price will be going up either way though, as I'm sure the Flames will be taking advantage of increased demand for a nicer arena, and to characterize this as the Flames paying is dishonest.

The salary thing rings a bell. Don't know the details.

Agreed that it's dishonest/disingenuous. And quite frankly, stupid marketing too. What do you think will sound better:

• Option a: "This leaves the owners paying too much"
• Option b: "This leaves the fans paying too much. Won't somebody think of the children fans?

[Doug]

Originally Posted by rotten42

...and Nenshi can shove it up his ass. From day one he has had a horrible record in dealing with business in Calgary. Always an adversary approach. Always arrogant. I have no problem with his stance on how public funds should be for public good but he simply has no clue how to work with business leaders in this city....and that is why nothing ever gets done.

Arrogant, dishonest and narcissistic. Nenshi tried to take credit for the vision while lying about the deal that was on the table. The Flames had no choice but to show their hand. Neither side benefits from this becoming an election issue. The best outcome would be Nenshi's defeat and no City arena contribution beyond land and infrastructure.

[McMurph]

This whole thing is idiotic. The Flames owners have gone from looking (way back) like a classy group of quiet businessmen who had an admirable philanthropic streak to a bunch of petty, manipulative pricks every bit as gross as and selfish as Katz. I honestly hope this spills over and starts to poison their other business and community work.

The only thing the Flames could do to save face now would be to publicly fire Ken King and ask for a time out. Then they can get their shit together and come back with a serious proposal.

Love the team. Now abhor the ownership group. Well done Flames.

[BFHeadstone]

I don't have the link to the article but Dianne Colley-Urkhart (sp?) is on the record stating that if it were not for Nenshi there would probably be a deal already. I believe that it was also her that suggested they enlist Dave Bronconnier to do the negotiations.

While I personally support a new arena and was in favor of the Calgary Next proposal, I can see things from both sides.
Who are we kidding, both are fudging the books and trying to push their positions. KK is correct in a way that the Flames eventually come out paying 3/3, and it is highly possible that repayment could be recouped in far fewer than the 35 years being thrown out there, especially if it and the city become a major draw for events in the future. Do the property taxes go down then? Do ticket prices? Probably no to both.
On the other hand if the new arena district become what Nenshi envisions then what of the ancillary revenues the city recoups? Do the Flames share in that??
While there really is no fool proof formula for this I can see why the city's plan really won't work but understand that what the Flames are rumored to be offering will not either.
One thing to consider with the talk bringing up taxpayers "investment" in something like the library, sure up front there are no user fees but you do have to get a card to take out a book (and no I don't know the cost of that because I use the internet not the library). But what other revenues will the library make? Does it bring in other businesses? Hell no. But we all still have to pay for it. And who is paying the property taxes for the next 35 year for it??? US

While I am no financial planner or negotiator there are others out there that can work out better numbers than the two sides that have been.

How about rather than kicking each other on here for their position why not see if there is a solution the general consensus here could live with?

my 2 cents