Random Thoughts: CalgaryNEXT Edition

Kent Wilson
January 17 2016 02:00PM

We originally had these notes on the original Random Thoughts article, but felt the topic was too important to shoehorn in it with general hockey stuff. My more through overview of the the CalgaryNEXT proposal can be found here. 

The Flames' ill-conceived arena project/megaplex is back in the news again after Gary Bettman's recent visit to the city. 

The NHL commissioner's shill job for the org's proposal borrowed heavily from the professional sports public subsidy playbook, but he didn't seem to find a very receptive audience. Calgary's city council (and citizenry in general) have been appropriately skeptical since the team released the details of their $1 billion project, but the oil induced economic slump has no doubt further eroded most folk's patience for corporate welfare.

- Nevertheless, it makes sense to investigate some of Bettman's more outlandish claims, if only to debunk them. First, he frequently defines Calgary's arena project as "infrastructure", implicitly placing it in the same mental folder as typical civic investments such as public roads, water and transit. He even went so far as to say the Flames weren't going to make a $900 million "gift" to the public. 

Building an arena for private interests isn't "infrastructure". The fact that it would be "publicly owned" isn't a boon to the city, unless it's also the entity garnering revenue from the building. As I mentioned before, the city owning the arena is a huge boon to the Flames, not the public - it allows the team to avoid property taxes and gives them the flexibility to walk away from the building at some point in the future without consequence. It also means the property won't generate any tax revenue for the city.

Bettman also mentioned that these sorts of projects are always completed through a "private/public partnership". What he means by that is a relationship where the public soaks up most of the cost and the risk while the team accrues almost all of the benefits and the profits. This project wouldn't be nearly as controversial if a real partnership had been proposed - i.e. one where both parties share risk and reward. 

Bettman also hinted at why teams so often run to the public with these "deals" rather than to the banks or private investors when he admitted "it's not an expense that is cost justified". As mentioned in this space previously, sports arenas tend to be terrible assets. They are expensive to maintain, fall out of fashion pretty rapidly and are hard to update, retrofit or destroy. As such, arenas rapidly depreciate in value, which is why the very rich men who own all the sports teams in the city would rather give the bill of ownership to you and me.

- Last word on this topic for now. Eric Francis published something shortly after his Twitter spat with Nenshi that requires some corrections. First one:

"The fact that many arena deals do wonders to help transform cities and enhance quality of life while also acting as tremendous economic generators gets ignored at times like these."

It's ignored because it's demonstrably not true. There's some "quality of life" arguments for people who frequently attend games, concerts and the like, but it hardly justifies the enormous cost to the public. People pay for this "quality of life" improvement by buying tickets to these events, not pledging millions in tax subsidies. Furthermore, economic studies have proven over and over again that arenas are not "economic generators". At best, they just move existing money around. At worst, they are a net economic drain. 

Next:

"They also point out the $240-million community revitalization levy from the surrounding area wouldn’t be generated without the building.

Found money."

This is a ridiculous claim. First, because CRL's (Or tax Increment Financing) are never "found money". They are a complex bet made by a city involving the shifting of tax dollars in order to kickstart development in given, often blighted areas. Calgary's East Village redevelopment was financed by a CRL, for instance. 

Of course, CRL's absolutely don't need something like CalgaryNEXT for them to "work" and, in fact, the presence of a huge, city owned property in the middle of CRL increases the city's risk. Arena proponents claim that sports megaplexes act as "anchor" properties that attract other development, but as East Village demonstrates, they aren't the only way to enact gentrification. The question should be "is this the most efficient way to spend this much money to spur development?" The answer, when it comes to stadiums according to economic literature, is almost always "no".

We'll have a more detailed article on CRL's in the near future. For now, check out Jonathan Willis' look at Tax Increment Financing here. The key take away? 

"TIF is not an effective economic development tool but is instead a budget management tool for local governments."

Finally:

"Tough sell but it’s all semantics..."

Semantic disagreements revolve around the meaning of words. That is emphatically not the case when it comes to the CalgaryNEXT "negotiation" - it is a complex philosophical and principled divide between parties with utterly discordant incentives and priorities. If a used car salesman tried to sell you a car you didn't want at a price you couldn't afford via thinly veiled personal insults, would you call that a semantic disagreement? Neither would I. 

At some point I'd like to see a new arena in Calgary. Unfortunately, the Flames' initial proposal and their subsequent pitch has been a farcical. Nenshi is right to dismiss Bettman's Lyle Lanley song and dance out of hand because, at this point, CalgaryNEXT isn't worth taking seriously.

39d8109299a9795cb3b41a4e9b49d501
Former Nations Overlord. Current FN contributor and curmudgeon For questions, complaints, criticisms, etc contact Kent @ kent.wilson@gmail. Follow him on Twitter here.
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#1 bruins
January 17 2016, 02:42PM
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This a a great article Kent. I don't understand why they are so hell bent on this location..it's a terrible location. Knock down the Corral and build there. The flames should get somebody else to be their spokesman other than king.

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#2 class1div1
January 17 2016, 02:52PM
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Unfortunately Flames management has taken 3 steps back with there original proposal.It will make future proposals that much more difficult.

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#3 Jeffster
January 17 2016, 03:28PM
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bruins wrote:

This a a great article Kent. I don't understand why they are so hell bent on this location..it's a terrible location. Knock down the Corral and build there. The flames should get somebody else to be their spokesman other than king.

Very narrow minded comment...CalgaryNext is more than just a "Corral type building as your comment implies ...it includes a modern NHL hockey arena, Football stadium and Public field house. Obviously knocking down the Corral and build as you suggest is elementary thinking...expand your horizons just a tiny bit and try thinking about a location near the downtown core that can accommodate all 3 venues to take advantage of the business/operational synergies.....

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#4 ClayBort
January 17 2016, 03:43PM
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Worst part of a potential deal with the city is it leaves the city with a cancerous white elephant at end of life that they have to dispose of, just in time for the Flames to ask for money for the next building.

This would be a terrible precedent to set.

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#5 John
January 17 2016, 04:18PM
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tl;dr of my rant below: Millionaire owners running a highly profitable enterprise do not need public money to make more money.

Rant:

I was listening a few weeks ago when the Fan 960 was featuring Flames' alumni with Rob Kerr during a pre-game broadcast. One alum (I didn't hear who it was) was dumbfounded by the fact that people were okay with the idea that the City of Calgary could spend hundreds of millions on a new library downtown, and then protest giving similar money to an arena (which with a snicker he suggested would be way 'cooler': "who reads them book thingys anyway").

Imagine the scenario: A for-profit library was being built by businessmen whose personal wealth was each in the hundreds of millions of dollars. These owners charge a hundred bucks a night anyone who wishes to enjoy its books and internet access for an evening. They employ all-star librarians who make multiple millions of dollars each year to sign out books and put on public lectures and readings. The owners would keep any profits from the library, and the building they'd just constructed would boost the net-worth of their library business (and by extension, their own enormous net worth) by hundreds of millions of dollars.

Ridiculous right?! Except when it's about a hockey team. Because hockey is all about civic pride, municipal spirit, the love of the game.

Or, at least until Collective Bargaining Agreements are set to expire and the owners their multi-million dollar employees are willing to cancel entire seasosn (or large parts thereof) to ensure they continue making as much money as possible. At those times, when people ask about the love of the game and civic spirit, they're derided as being naive because hey, this is a business.

I want the Flames to do well, I'd love to see them in a new arena, and I am happy to see the team's owners and players continue to make millions from it. They need no help from public taxes to do so.

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#6 Hubcap1
January 17 2016, 04:18PM
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Fantastic article Kent. Send it to Eric Francis would you.

On another related note I see the east side of downtown (stampede grounds, CP rail area, and east village) as the best area for a new project of this magnitude. There is space, and it is actually the designated area of the city for events (that's why the stampede sounds are there). Use the space that is available for what it is intended and stop trying to pass the buck with made up projects that don't need to be started now (west end redevelopment).

Oh and fire Ken King.

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#7 cunning_linguist
January 17 2016, 04:50PM
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I'd like to see the project go through, but the financials need to be adjusted substantially. I agree with everything Kent has mentioned about ownership of the property, as a property tax payer, I do not want that liability on our books. I do support the idea of a public/private partnership though, as there some things we would truly benefit from. The biggest, for me, being someone finally dealing with that friggin creosote issue...maybe it's just me, but I HATE the idea that we have contaminated ground in the middle of our city...

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#8 It Was In!
January 17 2016, 04:54PM
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I think if the Flames want this proposal to even have a chance, they need to tweak it so that they own the complex. This way, the CRL has its anchor tenant, and the Flames will ultimately end up paying for more than half of the building costs, through their ticket tax (they should front the money), 200mil from the owners, and what I would imagine as a hefty chunk of the CRL money. Slap the company responsible for the contamination with the bill, (seriously, it shouldn't even be up for discussion), and the city pays for the road restructuring in the area. I like the location personally, because despite the proximity to the river, it is not in a flood plane if you check the historical records. Plus the location forces the city to finally address issues that they should have long ago, and will need to regardless of this arena getting built, such as the Crowchild bottleneck and the mess that we all know as Bow trail.

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#9 nikkomsgb
January 17 2016, 05:39PM
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Everyone is way too upset over nothing. The first hurdle is the environmental assessment. Lets see that number then talk. If it's huge, then the whole thing will get scrapped. By the way they should definitely sue Domtar Corp. Project or not that crap is seeping into West HIllhurst.

The library was a waste. People read e-bookd and visit local libraries. In a city as sprawled as calgary, only a small fraction of the population will ever make use of it. If you think any flames arena funding is a waste, then surely you should feel the same about $250 million for a library. It's only to raise the city's profile.

Stampede grounds cannot work because the city extended East Village's CRL to include the grounds. So there couldn't be public funds, and no possibility for the flames to buy the land. It's also in a flood plain.

A new arena has to be downtown. A city's primary entertainment facility cannot be outside of it's downtown/midtown. It never ever works. So if West Village isn't going to work then they need to find a new site.

Finally, it's a shame they can't just come to a deal on an arena. Forget the stamps and fieldhouse and just build what we all know is the main issue at hand.

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#10 Rockmorton65
January 17 2016, 05:52PM
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Jeffster wrote:

Very narrow minded comment...CalgaryNext is more than just a "Corral type building as your comment implies ...it includes a modern NHL hockey arena, Football stadium and Public field house. Obviously knocking down the Corral and build as you suggest is elementary thinking...expand your horizons just a tiny bit and try thinking about a location near the downtown core that can accommodate all 3 venues to take advantage of the business/operational synergies.....

That's the point, Jeffster. It can't accommodate everything they're proposing. I an JUST fit everything they have planned with virtually no room to expand and one road in and out. Not to mention they expect thousands of people to use the area but only have parking for, what, twelve? Poorly thought out. Designed for profit, not useability.

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#11 beloch
January 17 2016, 06:34PM
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Some observations about CalgaryNEXT:

  • Because the CRL assumes city taxes will increase (massively) because of CalgaryNEXT and rolls those taxes into paying for the project, anyone who says the arena district will increase revenue for the city is effectively counting the same taxes twice.
  • As others, possibly Kent, have pointed out previously, this offer is intended to define the ballpark that future negotiations will take place in. The percentages are ridiculous because they're supposed to make the deal that eventually happens look good by comparison. For example, the city won't look foolish (to people who aren't paying adequate attention) if they talk the Flames into doubling their contribution to the project. However, because of the way this initial offer constructs the deal, the city will still be assuming nearly all the risk and have a long-term debt to service, while King & Co. will run away with all the profits and no long-term commitments. Nenshi was absolutely correct to refuse to speculate on what percentages would make CalgaryNEXT work because the underlying structure of the deal is a swindle.
  • If, for some reason, you think owning an arena is a good thing in and of itself, consider that the City owns the Saddledome. How much revenue is the 'dome going to generate once CalgaryNEXT opens up? Big concerts won't go there. Hockey games won't be played there. Dog shows and stampede rodeos aren't going to pay to keep the lights on and the structure sound. Ask a Winnipeger what happens to hockey arenas when the hockey team goes elsewhere. It's not impossible for the 'dome to stay standing, like the Corral, but it will be an albatross around somebody's neck for sure, and that somebody is you and me.
  • I would not have thought anyone could propose a deal like CalgaryNEXT with a straight face until the giant sperm starting going up in Edmonton. The structure of the deal for that arena is remarkably similar to CalgaryNEXT. Here is what's especially hilarious about the giant sperm: The Oilers are contributing 29% of the funds, but just 5% up front. The rest is lease-payments made over the life of the arena (assuming the Oilers don't actually leave town at some point). That means the city of Edmonton had to front 95% of the cash. That also means King is likely expecting us folk in Calgary to be just as #$%@'ing dumb.

In short, Nenshi is treating CalgaryNEXT exactly as he should. Treating it as a serious basis to begin negotiations would instantly put the City of Calgary at a huge disadvantage and guarantee King bends taxpayers over a barrel. The only reasonable response to CalgaryNEXT is to sit back, laugh heartily, and tell King to go sit on a hard-boiled egg. The fact that Gary Bettman rolled through town making thinly veiled threats about the Flames leaving town should not matter one iota.

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#12 everton fc
January 17 2016, 08:42PM
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With oil sub $30/bbl, and possible heading towards $25/bbl by week's end, this discussion should be put on hold, unless to goal of it all is to employ all the tens of thousands of people laid off in 2015. No one in Calgary is going to front much for a new arena, when cauliflower's sitting at $6.99 a head.

Reality, people. Inflation of necessities and deflation of hard assets. In concert. Never a good thing. We can live w/the facilities we have. Can't we??

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#13 MontanaMan
January 17 2016, 09:10PM
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everton fc wrote:

With oil sub $30/bbl, and possible heading towards $25/bbl by week's end, this discussion should be put on hold, unless to goal of it all is to employ all the tens of thousands of people laid off in 2015. No one in Calgary is going to front much for a new arena, when cauliflower's sitting at $6.99 a head.

Reality, people. Inflation of necessities and deflation of hard assets. In concert. Never a good thing. We can live w/the facilities we have. Can't we??

True but anything they design today wouldn't be ready for years, so assuming they started on the arena tomorrow, it would be two or three years before it was complete. And oil might be $75 by 2019!!! It's a tough call and a game of chicken between the City and the Flames. Who else is going to move into the West Village? What pressures are the City or Province under to clean up the site and for what purpose? No easy answers but it's likely not as simple as we think.

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#14 knappsacked
January 17 2016, 09:27PM
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So when calgarynext is built, what supposedly happens to the sattledome? Does it become a huge mall? Or does it just stay there as a landmark? It could become a hotel for homeless people! That could hella improve quality of life. Fes pieces of dry wall and a cot per room and the streets will have nobody sleeping in them!

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#15 Canrock 78
January 17 2016, 09:33PM
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nikkomsgb wrote:

Everyone is way too upset over nothing. The first hurdle is the environmental assessment. Lets see that number then talk. If it's huge, then the whole thing will get scrapped. By the way they should definitely sue Domtar Corp. Project or not that crap is seeping into West HIllhurst.

The library was a waste. People read e-bookd and visit local libraries. In a city as sprawled as calgary, only a small fraction of the population will ever make use of it. If you think any flames arena funding is a waste, then surely you should feel the same about $250 million for a library. It's only to raise the city's profile.

Stampede grounds cannot work because the city extended East Village's CRL to include the grounds. So there couldn't be public funds, and no possibility for the flames to buy the land. It's also in a flood plain.

A new arena has to be downtown. A city's primary entertainment facility cannot be outside of it's downtown/midtown. It never ever works. So if West Village isn't going to work then they need to find a new site.

Finally, it's a shame they can't just come to a deal on an arena. Forget the stamps and fieldhouse and just build what we all know is the main issue at hand.

I'm a stamps season ticket holder. Have you been to a game there? I'm not sure how all the talking heads get this thing worked out but we need to get kids away from the tv and video games and get them interested in life skills.

Sports are a great way to do that, it takes dedication team work and effort, not so much to watch tv or play video games.

I need to go the new library before I make a comment on that but I tend to agree with you.

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#16 ChinookArchYYC
January 17 2016, 09:50PM
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I want a new arena and fieldhouse, but not at the cost of the CalgaryNext current proposal. The thought of giving billionaires that employ millionaires a free arena so that they can make even more money, which the public will not take an equitable share in is not appealing. Add the thought that the arena will never break even, before taxpayers will be obligated pay millions more to upgrade or level it is unacceptable.

There's another contaminated parcel of land 5 minutes from down town Calgary - Firestone Park. This location is centred between 3 major street arteries (Deerfoot Tr, Barlow Tr, and Memorial Dr) plus is it less than 200 metres from a currently built C-Trail station. The West Village does not need an anchor, it has one - it's called the downtown Core.

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#17 Parallex
January 17 2016, 11:09PM
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Here's what needs to happen... assuming the cleanup cost isn't insane. The Flames need to scale back their proposal to just an arena and adjust their plans to perhaps allow for a later expansion to incorporate the field house. They, the Flames, need to own it. Give the city an anchor property tax paying project for the redevelopment plan and maybe once the district is starting to pay it's way and the economy has improved the city can allocate $$ for the fieldhouse/stadium component.

The current proposal is a complete non-starter.

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#18 SydScout
January 18 2016, 03:04AM
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Its probably too late to garner much interest in these comments, but my thoughts (as an outsider, who has a large bias towards Calgary and its people - absolutely love the place).

Advantages

Multiplier effect - I do believe stadiums and prestige teams in a city promote spending that wouldnt otherwise happen. A great stadium, like TD Gardens in Boston or the Millennium Stadium in Wales, is located in a central area with local businesses outside that cant stand on their own without the stadium during quiet periods, and have terrific internal facilities (bars, food, bathrooms) that enhance the experience. This is particularly important for the owners, as they charge very high ticket prices in Calgary relative most countries.

Infrastructure - If the location is right, the infra that a new stadium can bring is enormous. This is especially the case in Calgary, that has quite poor (but improving) public transport. For those complaining about the nightmares that are your roads, weave into any proposal improved public transport and this may alleviate some of these pressures (get out of yours cars people!)

Introduce Scale - Is there an industry that the city is missing, or is housing in short supply? Tying developments in together is best to bring scale to the project.

Disadvantages

Opportunity Cost - what else does the city need, that can generate revenue? I actually disagree with a new public library costing $250m. Also, a sensible government should generally build infrastructure that can be sold in the future. Power poles? Sell them when they will garner a fair or better price. Then reinvest in something else that can be sold in 20 years. A stadium? Stupid on these metrics.

Land Use - structures such as stadiums take up a lot of land. That if in areas, is expensive. I would seriously consider a $1 lease on the land near the city, for the foreseeable future, to the ownership group. They just need to reclaim it, and make it useable once the stadium is mothballed in the future.

Mulit Purpose Stadia - it would need to include a stack of multi purpose components to be truly viable. I'd love to see a stadium close to the city, accessible to kids, with plenty of activities to get them out of the lounge room. But....this is expensive and not profitable. So, apportioning a cost to the city, and a cost to the owners may be the way forward there.

My proposal would be that the city looks into an advantageous PPP (public private partnership) for the ownership group. Its not giving the money away, just doing it at a discount. The ownership group would then need to use collateral, similar to a standard investment banking transaction, to ensure that in the event that they wish to leave the city a white elephant, the city calls in the collateral and uses the funds to either dismantle the complex or regenerate the area.

The problem is that these thoughts are off the cuff and barely thought out - one would need a few months to truly get a decent handle on it. Trash away, this comment is too long!

I'm delighted that Nenshi has the wits and smarts to bargain appropriately.

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#19 KACaribou
January 18 2016, 06:54AM
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What I find most fascinating is how sports bloggers are able to know vastly more about building a billion dollar sports complex, than the multi-millionaire businessmen who actually have investments in it.

It's a topsy-turvy world isn't it?

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#20 Burnward
January 18 2016, 07:25AM
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@KACaribou

Like my woman says, "If my business teacher in college was so good, why isn't he rich?"

Smart, that one.

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#21 smith
January 18 2016, 07:52AM
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@KACaribou

It is more to the point that it is to the multi-millionaire's advantage to take the city for a ride. We need to hope that the politician's know enough about building a billion dollar sports complex too protect us from being taken for a lot of money. A blogger who pays taxes is obviously going to have less invested in having the building built than the millionaires who make money off it.

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#22 piscera.infada
January 18 2016, 08:46AM
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@KACaribou

There's a massive difference between multi-millionare businessmen knowing how to build a billion dollar sports complex, and those multi-millionare businessmen having the city's best financial interest at heart.

That's the gulf here. Sure, they know how to best build a complex with their interests at the primary motivating factor. However, when you're asking the tax-payer to front nearly 80% of that bill, and not even factoring other contingencies in, it's a distinction that needs to be made.

@Syd Scout

I'll take umbrage with the "infrastructure as a positive" argument here--and I feel this is the biggest issue with a proposal of this magnitude. Upgrading infrastructure sounds nice as positive for the area. Sure, build the project, and upgrade the infrastructure. However, the very success of the project as a whole--especially in the proposed area--will require significant investment in upgrading all infrastructure in the area. Yes, this includes the already existing transit in the area, but major expansion of Crowchild Trail, Bow Trail, 14th Street, and 12th Avenue (at the very least), will be a requisite factor in the project even working. That improvement will be at the very lowest end in the $200+ million range. Now who foots that bill? The city/province. And while I agree, that's necessary in this case--it is their purview after all. That's going to be even tougher for a tax payer to stomach considering they'll be footing a large portion of the complex as well (with no direct benefit to the tax payer).

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#23 Parallex
January 18 2016, 08:58AM
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I think one really annoying part of the whole project is how duplicitous King/Bettman have been in it. No, they're not quite outright lying, but they're being deceitful or evasive in their presentation.

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#24 piscera.infada
January 18 2016, 09:02AM
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@Parallex

That's what you expect though. I was at the game on Wednesday night, and in all the bathrooms they have those poster-boards displaying the CalgaryNEXT project saying something along the lines of "build a legacy".

That's always the narrative, and it's one that always happens in these negotiations. Every. Time.

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#25 slapshot444
January 18 2016, 09:08AM
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ChinookArchYYC wrote:

I want a new arena and fieldhouse, but not at the cost of the CalgaryNext current proposal. The thought of giving billionaires that employ millionaires a free arena so that they can make even more money, which the public will not take an equitable share in is not appealing. Add the thought that the arena will never break even, before taxpayers will be obligated pay millions more to upgrade or level it is unacceptable.

There's another contaminated parcel of land 5 minutes from down town Calgary - Firestone Park. This location is centred between 3 major street arteries (Deerfoot Tr, Barlow Tr, and Memorial Dr) plus is it less than 200 metres from a currently built C-Trail station. The West Village does not need an anchor, it has one - it's called the downtown Core.

As much as I really dislike that worn out and over used line "Billionaires and millionaires," the rest of your post is bang on. The city really wants to develop the west village on its own hence the secret transaction to buy the GMC dealership last summer for 20 million. If KK wanted to get this deal done with the city owning the new dome as opposed to the Entertainment organization owning the dome, he needed to sit with the city in the first plane and short list a list of locations. Then work with the city on logistics, get council approval and then announce the project. The current approach is highly confrontal with city council and absolutely zero chance of approval with the current city administration. Tossing Bettman in the mix was like salad dressing with out the oil, vinegar only. Firestone park could be a location with great access, it just isn't sexy and wouldn't have the draw for the hotel and restaurants. At least the funding model would be honest.

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#26 nikkomsgb
January 18 2016, 09:09AM
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Canrock 78 wrote:

I'm a stamps season ticket holder. Have you been to a game there? I'm not sure how all the talking heads get this thing worked out but we need to get kids away from the tv and video games and get them interested in life skills.

Sports are a great way to do that, it takes dedication team work and effort, not so much to watch tv or play video games.

I need to go the new library before I make a comment on that but I tend to agree with you.

Season's ticket holder for 4 year, as well as a flames ticket holder. I know your pain with regards to McMahon, it's awful. We are giving up our seats this year because frankly we cannot be bothered. But that is as much about the CFL Product, as it is about the stadium.

I fully agree with your comments about getting kids out and away from the TV.

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#27 piscera.infada
January 18 2016, 09:14AM
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@slapshot444

I'll agree with you on the "new toy for billionares" line. It's trite. That said, it's really hard to combat a trite narrative from their side (civic "pride") without a trite narrative of your own.

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#28 ClayBort
January 18 2016, 12:09PM
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KACaribou wrote:

What I find most fascinating is how sports bloggers are able to know vastly more about building a billion dollar sports complex, than the multi-millionaire businessmen who actually have investments in it.

It's a topsy-turvy world isn't it?

The academic literature/case studies etc. overwhelmingly dispel the belief that sports teams and facilities (especially publicly funded ones) create economic value for cities. It's actually more likely economic value is destroyed. I take the experts' opinions over a the opinion of a Calgary businessman and New York lawyer (who is a noted snake oil salesman) looking for a handout everyday.

Again, if you have such a negative view of bloggers that you feel compelled to express it in the comments of every article, don't bother visiting the site.

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#29 Derzie
January 18 2016, 12:32PM
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The city should "Ken King" the Flames and table their proposal for CalgaryNext. They should get in a room and slide a note across the table to Ken with a great big zero/happy face on it. Billionaires and consumers of $200 tickets and $12 beer can afford to pay for their own digs to frolic & swill in. And anyone who takes Eric Francis seriously in any way deserves what they get. The wealthy "me" crowd that feels their entertainment is a top civic priority. Laughable.

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#30 SydScout
January 18 2016, 03:41PM
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piscera.infada wrote:

There's a massive difference between multi-millionare businessmen knowing how to build a billion dollar sports complex, and those multi-millionare businessmen having the city's best financial interest at heart.

That's the gulf here. Sure, they know how to best build a complex with their interests at the primary motivating factor. However, when you're asking the tax-payer to front nearly 80% of that bill, and not even factoring other contingencies in, it's a distinction that needs to be made.

@Syd Scout

I'll take umbrage with the "infrastructure as a positive" argument here--and I feel this is the biggest issue with a proposal of this magnitude. Upgrading infrastructure sounds nice as positive for the area. Sure, build the project, and upgrade the infrastructure. However, the very success of the project as a whole--especially in the proposed area--will require significant investment in upgrading all infrastructure in the area. Yes, this includes the already existing transit in the area, but major expansion of Crowchild Trail, Bow Trail, 14th Street, and 12th Avenue (at the very least), will be a requisite factor in the project even working. That improvement will be at the very lowest end in the $200+ million range. Now who foots that bill? The city/province. And while I agree, that's necessary in this case--it is their purview after all. That's going to be even tougher for a tax payer to stomach considering they'll be footing a large portion of the complex as well (with no direct benefit to the tax payer).

Thats why PPP's can (no definitive statement) be a useful tool. As long as the cap rates are are fair, they can work for both asset owners (City) and investors (ownership group).

I thoroughly agree, and perhaps didnt make this clear, that all infrastructure needs to be upgraded. I dont agree with ownership getting a free pass, but looking for a solution that is palatable to both sides. No doubt that nothing gets done if neither side bends a little.

And if there is one country in the world that does infrastructure deals better than Australia, it is Canada. You guys are extraordinarily skilled and experienced in this area.

I wont comment on the roads, as I am a steadfast believer in less public transport solutions, not just major road expansions.

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#31 Tomas Oppolzer
January 18 2016, 05:43PM
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ClayBort wrote:

The academic literature/case studies etc. overwhelmingly dispel the belief that sports teams and facilities (especially publicly funded ones) create economic value for cities. It's actually more likely economic value is destroyed. I take the experts' opinions over a the opinion of a Calgary businessman and New York lawyer (who is a noted snake oil salesman) looking for a handout everyday.

Again, if you have such a negative view of bloggers that you feel compelled to express it in the comments of every article, don't bother visiting the site.

100x this. KA is constantly belittling the writers and readers here. Its ridiculous.

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#32 piscera.infada
January 18 2016, 07:04PM
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SydScout wrote:

Thats why PPP's can (no definitive statement) be a useful tool. As long as the cap rates are are fair, they can work for both asset owners (City) and investors (ownership group).

I thoroughly agree, and perhaps didnt make this clear, that all infrastructure needs to be upgraded. I dont agree with ownership getting a free pass, but looking for a solution that is palatable to both sides. No doubt that nothing gets done if neither side bends a little.

And if there is one country in the world that does infrastructure deals better than Australia, it is Canada. You guys are extraordinarily skilled and experienced in this area.

I wont comment on the roads, as I am a steadfast believer in less public transport solutions, not just major road expansions.

I don't inherently disagree with the premise that much needed infrastructure upgrading is a positive. The point I'm making is that it isn't included in the project as "part of the city's investment". That's problematic because the location of the new complex likely means a price tag of a half-billion on those improvements alone--we're talking major, major upgrading. That's clearly a huge part of the city's requisite investment in a project of this magnitude.

That's not to say "the project shouldn't go ahead", but it does mean that the investment needs to be accounted for. That investment, is just one more (massive) reason why the currently proposed funding model doesn't work. I'm not naive that the deal, if it is to be made, will change a great deal before it comes to fruition. However, the fact that that amount government monies must be invested in infrastructure as contingent on the project being even close to a success, needs to be reflected in the final outcome regardless of how much the improvements are needed even if the complex isn't built.

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#33 RealMcHockeyReturns
January 18 2016, 08:42PM
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everton fc wrote:

With oil sub $30/bbl, and possible heading towards $25/bbl by week's end, this discussion should be put on hold, unless to goal of it all is to employ all the tens of thousands of people laid off in 2015. No one in Calgary is going to front much for a new arena, when cauliflower's sitting at $6.99 a head.

Reality, people. Inflation of necessities and deflation of hard assets. In concert. Never a good thing. We can live w/the facilities we have. Can't we??

First I came from Winnipeg to Calgary in 1996 because in part the awesome NDP government listened to all the seniors and whiners who did not want to help get an arena done..and then what happened...16 years of sadness, no NHL, reduced tourism, and non-world class city status. And here and now it's the same....too bad 80% of the people on here don't save for a rainy day, or work outside the "lets rape the earth" oil & gas industry, then maybe your opinions would change...if you make $100-$200K per year, stop buying toys like snowmobiles and maybe you won't whine so much about how poor you are and $200 more property tax per year. Facts are:

The deal IS far better than Edmonton's so that's a Great start...

AND people forget ticket-tax pays for a large amount of this one so the "fancy library" people can just avoid NHL hockey...

oh and having a badly needed fieldhouse for amateur sport that Edmonton has 5 of already! And yes Winnipeg has had a fieldhouse at U of M for 25 years.

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#34 Kevin Misner
January 19 2016, 07:54AM
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It's unfortunate that there are so many ignorant people in this city focused on trying to make the Flames owners, selfish billionaires.

In reality they are community builders that care more about this city than all of the people complaining about this project combined. Including you Mr Wilson. You're more focused on trying to kill the idea than anything else.

Do your research and take a look at what these people do for our city. If you think they lack integrity and are just trying to take tax payers for a ride you're ignorant to the facts.

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#35 piscera.infada
January 19 2016, 08:15AM
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@Kevin Misner

Lot's of professional sports owners do great things for the community. I for one, am extremely grateful for everything the Flames, Stamps, and Hitmen do in the community, as well as everything Edwards and Co. do from a charitable standpoint.

That doesn't change the fact that in almost every single case study about projects of this magnitude, the economics do not line-up. The cities always draw the short-straw, and end up losing money in perpetuity--that can have massively deleterious effects on the community at large. That doesn't mean "no money for the project", but it does mean that the city does have to look out for the interests of all of it's citizens.

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#36 nikkomsgb
January 19 2016, 11:01AM
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people are bringing up an interesting point about the infrastructure work needed near the West Village site. Coupled with the environmental mess that's there, I think we see the two driving forces behind this project getting this far to begin with.

Leaving CalgaryNext aside, the mayor came out when this story first broke and said that the Creosote contamination is much worse than first feared and has already crept under the Bow River and into West Hillhurst. It's a wonder residents there haven't freaked out already.

The Crowchild spaghetti junction is arguably the city's worst transportation bottleneck, and I would know I live in Altidore and use it daily. They have spent millions on assessments and studies in the past decade plus trying to decide how to fix it.

I am caring less by the day about the pros and cons of CalgaryNext, but am starting to think that a lot of this is Council trying to posture for Provincial/Federal money to improve that area.

No doubt the Flames and their ownership are trying to use this to their advantage. However don't be shocked if council isn't also using the Flames to make light of the mess in West Village that the province is on the hook for.

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#37 McRib
January 19 2016, 05:02PM
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"At some point I'd like to see a new arena in Calgary. Unfortunately, the Flames' initial proposal and their subsequent pitch has been a farcical. Nenshi is right to dismiss Bettman's Lyle Lanley song and dance out of hand because, at this point, CalgaryNEXT isn't worth taking seriously."

I have a theory, hear me out... What if all along the Flames never intended for CalgaryNext to be the actual final project that gets built? Who knows maybe all of this is just to negotiate a better land deal from the Stampede/City beside the current location. One only has to look at the grainy stock photos of CalgaryNext to think along these lines at least for a brief moment. Maybe all along CalgaryNext was created as a bargaining chip towards getting a more simplistic project in the current location.... I know I likely sound crazy, it's alright. But remember when detailed photos of the "Populous designed project" leaked a few years ago, where the inner roof lowered for Hitmen games. Those looked like professionally designed third party architectural photos that were thought out, whereas the CalgaryNext photos just look like something I created on my laptop... Maybe the Flames wanted land on the Stampede grounds that wasn't as prone to flooding inland from the riverbank and they are trying to negotiate for it or something else along those lines. The east village makes that area even more appealing, maybe the Flames are just trying to get a better deal than was initially offered, as the City/Stampede aren't as desperate as they have been in the past with increased development in the Victoria Park area of late. CalgaryNext seems too rushed to think it was their primary idea all along, I would not be surprised if they had a more realistic project in their back pocket. At least I hope so, or else things could get ugly. This project is so rushed the Flames have not even allocated who will pay for a majority of the funds, am I really that crazy.... Everything about CalgaryNext (even the name) just screams that it was only an idea designed to test the waters, not one to actually get done.

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