The FlamesNation CalgaryNEXT Primer

Ladies and gentlemen, there has been a lot of chatter around these parts regarding the CalgaryNEXT project, which includes the proposed future home of your Calgary Flames.

In the interest of keeping things tidy and easy-to-follow in the weeks, months and (perhaps) years that this project will span, we’ve aggregated together everything we’ve done to-date on the subject. It’ll be updated from time to time, particularly when there’s news on the subject, so feel free to bookmark this page.

PRE-ANNOUNCEMENT SPECULATION

ANNOUNCEMENT AND INITIAL REACTION

ANALYSIS OF THE PROPOSAL

PROPOSED FUNDING MECHANISMS

  • Colin.S

    So things I’ve learned since the announcement from various interviews from King and other things that I’ve read.

    The 200 million the Flames are putting up is NOT an upfront 200 million payment. Much like the Edmonton deal, a lot (if not most) of that 200 million will be paid out as rent/lease. That’s a big pile of BS, you can’t come out and say that you are contributing X dollars when most of the money you are committing is something you have to pay anyways.

    The CRL is BS (in this particular funding scheme), plain and simple. The CRL is paid back by future taxes earned through the developments in that CRL area. However the Flames have come out and said they want no part in owning the buildings, why? Because then they’d have to pay property taxes! You know, the taxes that help pay back that CRL, so if the Flames aren’t paying any property taxes towards the CRL and the rest of the development could be years away after the arena and stadium are long done. Then include the creosote cleanup and infrastructure changes, the city of Calgary could have spent billions with no real revenue from the CRL coming in to pay for it. Is there even a timeline or announcement of any more new developments in the area or is it just the arena/stadium and the Flames hope someone else will eventually come along and develop the area?

    Then there’s the ticket tax (or as King likes to call it ‘user pay’). The idea is good in theory, but again the Flames are looking at the city putting up the money with the Flames paying it back over X number of years. If the Flames get their own loan to cover that it’s a great idea, but to get the city to put the money up is just stupid after the city has to put up all the other money for the construction of the building. What if the city fronts the money and the teams are crap and not as much tickets are being sold, what if the dollar goes to 50cents to the US dollar the then team leaves? How is there going to be ‘user pay’ if there are not enough users of the building.

    And lastly is the Fieldhouse money. I’d like to see what the cities vision of a field house is for 200 million versus what the Flames vision is. Because to me it looks like the Flames want a new stadium with an added on Fieldhouse vs what the city would want as a dedicated amateur field house.

    Of the discussed 900 million price tag (not including cleanup of contaminated land or infrastructure changes/upgrades) the Flames could want the city to front as much as 800 or 850 million dollars and would see next to zero revenue from the properties. I completely fail to see how this is suppose to be a benefit to the city of Calgary.

  • Colin.S

    I am in agreement that we need a new stadium(field house and arena) and I could even live with the tax payers fronting the cost but the proposal presented is not something I can support. Location on a flood plain, both arena’s to small for a growing city and the cost and revenue sharing model that have been presented.

    How many of us would accept this type of business model? A friend tells you he has a way to make money and he wants you to invest with him. Most of us would be willing to at least listen to him. He wants you to invest anywhere from 60-90% of the investment, he gets all the profits from the investment but your public image would be enhanced, if something happens to the investment you will on the hook for any law suites and he will be able walk away. Also in 20 years he will want you to do it again. I think all of us would be rather reluctant to get into this deal. I know this is a rather simplistic explanation of the deal but that’s how I see it. I hope my CEO(Mayor Nenshi and City Council) fight hard to make sure the shareholders of this city (the taxpayers) don’t get left holding the bag.
    I really don’t even want to read about it until the Calgary Sports and Entertainment group put up more of the money and discuss a real revenue sharing plan that does not leave me, my children and potential grand children being on the hook.

    • Colin.S

      The business model is shear stupidity for the city.

      First on the ‘200 million’ contribution the Flames are putting up. Image you want to build a brand new house from scratch. The entire thing will cost you 500,000$ and you just need 20% down to get started, so 100,00$. So you give the bank 25,00$ and tell them the rest of you contribution for the house will be paid out over 25 years as rent. You tell the bank your not going to pay the remaining portion because you don’t actually want to own the house, the banks going to keep it as an asset that it could sell or use later. How do you think that will work out with the Bank? So why should that work with the Flames?

      Second example, as to the City owning the buildings. The Oilers lease agreement (which seems to be what King based his proposal on) on their new building stipulates that they only have to pay a maximum of 250,000 in property taxes. http://www.edmonton.ca/city_government/projects_redevelopment/the-agreement.aspx It’s under Arena Operations. 250,000 sounds like a lot, but it’s really not. It would take approximately 84 homes at about 3,000$ worth of property tax to make up the same amount tax the Oilers have to pay annually. And at an average cost of 500,000$ it would have only cost the city 42,000,000$. Think about that, the city of Edmonton could have built 84 new homes and given them away for free for cheaper than the new arena and would have received the same benefit from it.

  • Colin.S

    City council needs to let K King know that offer is not worth looking into under present conditions, Come back with your best offer or quit wasting our time.

    • loudogYYC

      Well done the organization and especially the players always represent themselves and the city very well.

      One another note I’m on the fire Ken King for wasting years developing this half-assed and shady proposal.

      • Colin.S

        It’s shady as hell, but it’s not half assed, it’s a very purposeful proposal made to get people all full of civic pride to get them to empty their pockets for billionaires to make even more money. It’s pretty much the Edmonton playbook outside of the pitiful threat to leave town, although there was a news story that the Seattle arena cleared another hurdle, so look for the Flames to Seattle story any month now. https://twitter.com/ChrisDaniels5/status/638919605491269633 Although I believe that arena is supposed to be built entirely with private money.

  • loudogYYC

    Although I’m a huge fan and proponent of the idea of an arena & entertainment district in the West Village, the funding model is too broken at this point to make sense.

    CSEC’s $200M and $250M user fee should be an upfront contribution and the $240M CRL request should just be taken off the table completely. A CRL is meant to be used for roads and infrastructure that will entice future private investment like in the East Village. This means you can’t buy a single brick for the stadium with that money. They need to source that $240M elsewhere.

    IMO, if this is going to work it’ll be CSEC owning the arena outright, and partnering with the city on the stadium/fieldhouse. It would also mean the city chips in more than $200M so it won’t be easy. This way they can still redevelop the area and use the CRL mechanism appropriately. Maybe they could use part of it to put Bow Trail underground for that 800 meter stretch from the Mewata Bridge to the Pumphouse Theatre. It would open up a whole lot more land.

  • Colin.S

    I notice the people on this site that are complaining about the Flames proposal are the same guys that watch most of the Flames games from their couches eating potato chips. They call it a flood plain when in actuality the area did not get an ounce of water during the recent worst flood disaster in Calgary’s history. They suggest the facilities get built at Firepark or Cross iron mills without any common business sense as to where the primary customers and revenue are generated from the downtown core of corporate sponsors, executive suites, entertainment etc.

    The supporters are business savy where they understand the definition of “proposal” as a means of getting the discussions underway. It is a mere starting point for evaluations, discussions and negotiations.. Not that I even had a slight sense that the crowchild upgrades, remediation are not a private issue but rather a civic issue that has been totally ignored for years.

    To all the couch potatoes and critics of the Flames organization be grateful that these gents had the fortitude to give these lazy public officials a kick in the ass and try and bring Calgary the facilities it deserves before they crumble to the ground. Let this play out and voice your senseless remarks at a time when all the facts are known. In the meantime enjoy your entertainment centres in your dark warm basements!

    • piscera.infada

      That is the most garbage argument I’ve heard in a long time. You do realize you’re spewing that uninformed, lazy, drivel on a message board solely aimed at long-time, passionate Flames fans?

      Look, the simple fact that this project is met with this much skepticism from a group of loyal hockey fans, should signal to everyone that the project is flawed.

      To your point about “voicing opinions when all the facts are known”. Again, lazy. The reason people are so rabidly against the project as it currently stands, is that Ken King (especially given the copious amount of media time he’s dedicating to this–townhalls, radio spots, website, newspaper columns, et cetera, ad nausea) doesn’t seem to have any answers the the real questions that Calgarians–whom he’s asking almost a dollars from–would actually care about. Those questions being, what are the benefits of the city owning the arena? Who up-fronts the “ticket-tax” money? How is the original up-front amount from ownership ($200m) derived (is it up-front cash? is it from future rents [like Edmonton]?)? What percentage of time will the field house actually be “public use”? Will the city, for all it’s investment, actually get some sort of return on that investment, outside of a 20 year-old dilapidated building that’s of no use to anyone once the Flames decide they need a new one?

      But, no platitudes and niceties from Ken King. Christ, the guy says so little when asked a question you think you’re talking to a Queen’s Guard outside of Buckingham Palace.

      Oh, but don’t worry, those of us who have actually read-up on, and consider arguments that are not feel-good civic pride straight from those who plan to benefit from this “gift to the city”, get to be belittled (or at least that was an attempt, right?) by some snot, writing a tome about how “you’re not real fans”. I call BS on that to the ‘n’th degree.

      And, for your information, yes, I go to the ‘Dome all the time (I’m a Flames season’s ticket holder, an avid Hitmen and WHL fan)–it’s one of the few times I get out of my dark warm basement.

      • piscera.infada

        You certainly do not represent the majority. The majority of the Flames fans are taking an intelligent approach. Let’s this thing play out and get some answers…..you lack business savy…did you not say Firework was only 5 stops from the downtown core?? hahaha….to funny.

        Let’s wait until your civic politicians come up with bright proposals regarding the field house, remediation and the crowchild upgrades…ever driven that area after work?? Let’s just wait…wait….

        • piscera.infada

          You certainly do not represent the majority.

          I never once said I don’t support a new arena and stadium. It’s needed, yes. That’s never been my issue. I’ve also never argued against the proposed location. I too agree that the area needs to be developed in some way. If an arena kick-starts that, awesome.

          Let’s this thing play out and get some answers…

          A modicum of reading comprehension on your part would prove that “answers” are exactly what I want. The proposal as it stands now is unworkable, simply because there are too many questions–questions that a group that has “dedicated almost a decade to this” (their words) doesn’t, for some reason, have answers to.

          you lack business savy…

          I’d argue that giving an ownership group close to a billion dollars without even factoring in the thought that all the infrastructure improvements would likely cost the city more than an additional 300 million dollars, shows an extreme lack of any business acumen. But that’s just me.

          The simple fact is, this is a large scale project, and any contingencies (which there will be), need to be thought about before hand. When asked where contingency funds will come from, Ken King gives people a solid “we’ll figure that out later”. But, you know, business savvy…

          did you not say Firework was only 5 stops from the downtown core?? hahaha…

          No. You’re thinking of someone else, but thanks for that.

          Let’s wait until your civic politicians come up with bright proposals regarding the field house, remediation and the crowchild upgrades…

          As I said above, proper “business savvy” would have some sort of contingency plan for the above issues–they are real, and will need to be dealt with for this project to be at all successful. Again, the people in charge of the project should have something more in the way of answers than “the city can foot ‘x’ amount now, and the remediation and infrastructure costs can be worked out by the city over and above that”. Yes, the city should and will foot those bills, but that should factor into the initial ask–it seemingly doesn’t.

          ever driven that area after work??

          Every day, bud. Infrastructure improvement are badly needed in the area and most importantly Crowchild. That said, they need to happen regardless of an arena or stadium complex being built in the area. I agree, if this project helps spur that improvement, then that’s great. However, the simple fact that the success of the entire project is contingent on the infrastructure being upgraded means that the project
          needs the city, more than the city needs the project
          .

          Let’s just wait…wait….

          I’m waiting for real answers. Until you or Ken King can give me anything of substance, I’ll remain skeptical.