Nenshi, city council respond to Flames pulling out of arena negotiations

Buckle up, gang, because it sure sounds like the negotiations between the City of Calgary and the Calgary Flames regarding a new home for the hockey club are going to get worse before they get better. After Flames president Ken King announced that the club was stepping away from negotiations, Calgary mayor Naheed Nenshi and city council made a move of their own.

First, council voted 8-4 to release negotiation details between the City and the Flames, effectively taking their in-camera talks out into the open. Nenshi then spoke to the media, confirming a handful of aspects of the negotiations that were (to this point) speculated upon.

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The arena price tag was confirmed to be around $550 million and the three-way split reported by the Globe and Mail between the City, Flames and a ticket tax confirmed as “mostly accurate.” The City’s contribution would be a loan, and the comments sure make it seem like Metro Calgary’s report about the loan repayment mechanisms being the sticking point is fairly accurate as well. At $550 million for the new building, that would be approximately $183 million from the City, $183 million from the Flames and $183 million from a ticket tax. (Our guess was only off by $50 million.)

The details on the City’s offer will be released “in coming days.” As for the prospect of reigniting negotiations, the mayor stuck to his guns.

“We remain at the table,” said Nenshi.

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  • Skylardog

    I started off pointing out the benefits and asked what is the right level of funding?

    I also pointed out that all 3 levels of government, and the citizens, will benefit from an arena, and that the province and Canada should also be involved.
    What if, the current model is used, $550 million, 1/3 Flames, 1/3 ticket tax, but instead of a loan, 1/3 publically funded, with Feds paying 40% ($73.25 million), the province paying 40% ($73.25 million), and the city kicking in 20% ($36.5 million) of the $183 million portion.

    The benefits over a 30 year lifespan for the building would easily outweigh the costs. Done on a long term bond, per Calgarian, that is just over $1 per year. Per Canadian, it is $2 this year and then they are done paying.

    • Robear

      I like the fact that you are trying to dig down through the numbers, but I think you are off base with many of your assumptions.
      As Kent mentioned, CIties cant collect on income tax, only property tax. So all discussion about income tax regeneration is moot… unless you think the Canadian tax payers outside of Calgary should be supporting the arena being built? Hopefully you haven’t reached Maple Leaf levels of delusion.
      The trickle down impact of paying players is grossly overestimated. Sure they will have homes in the area and shop in the area, but do you think all that money gets spent locally? Only a part.
      The City’s contribution is actually 4-part:
      low interest loan of $150MM (at 1MM Calgarians and ~ 500,000 residences that works out to a $300 increase per property)
      Risk on loans versus overruns and unexpected events (insurance required)
      Donation of land in proximity to the downtown core (no idea of the total here, but I cant see it being much less than a $100MM)
      Construction and upgrade of infrastructure in the region of the new facility (again no idea of total costs, but I bet its bigger than a bread box!)

      ALl these costs are born by the City almost immediately and they must all be funded out of property taxes. so even though you talk about being able to leverage long term loans, there would have to be an additional cost to maintaining those loans.
      And while the pay back for having the Arena built is so that my Mighty Flames have a place to hang their hats while the take names and kick asses (not necessarily in that order), it has to be asked, WHy am I paying for the tickets and paying for the TV AND paying for the CIty’s loan.
      I’m resisting putting anything snarky about Murray Edwards and billionaires, but it strikes me as disingenuous that the Ownership group will benefit mightly from this deal, while all I do is support the team and pay for it three ways to SUnday!

  • McRib

    This breakdown shouldn’t be broken into thirds it should be broken into fourths. The fourth figure being the City’s land donation, a large plot of commercially zoned land in Victoria Park is easily in the $100s of millions. This is all before we even start to considering other municipal investments like upgrading public transit, sidewalk construction, etc.

  • Oilerchild77

    It seems like the threat to leave was the Flames’ first resort, rather than their last. That indicates a complete lack of respect for the fans and the city on the part of the Flames organization, and if that’s going to be their attitude, then the city shouldn’t wait for another threat, they should just take the initiative and ask those pricks to leave. Then build another arena anyway, and when one of those lousy US markets start to lose too much money (yes, I’m talking about you, Carolina) they will likely get moved to Calgary, because the league knows it will make money there.

  • BendingCorners

    I remember a 12-month lockout and later a 4-month lockout. Neither occasion resulted in a lower GDP for the city nor in a lower tax haul for the City. I hope they stay and I don’t care if they play in the Saddledome or build themselves a new building and raise ticket prices to cover it. But if they leave, we’ll manage fine without them. The only correct response to their ham-handed attempt to influence the municipal election is to refuse to support any candidate that wants to spend public money on a new arena for them. An even stronger message would be to refuse to attend any home games until after the election. Hit them where it hurts, even if it’s only two games.

    • freethe flames

      The first question I was going to ask my candidates was going to be “How much should the tax payers contribute to the new arena?”anyways. I have plenty of other questions but this was always going to be #1. If the city is to invest in this new arena it should expect some revenue from it; any other investor would and not just tax revenue or good will but some form of revenue sharing. Then both parties should be putting money away from their revenue to do the upgrades that will need to be done and the replacement costs in another 30 years or so.

  • Howedy

    Classic Calgary, they think they are better than everyone and they want it all for free. We don’t want to contribute any public money, but we want a new arena and to keep the Flames and we don’t understand why we get shafted on so many quality music acts touring.

    I’ve been a fan for three decades but I’ll be fine if they leave for Seattle and you guys can just follow Nenshi’s twitter feed 41 extra nights a year because that’s real entertainment. Calgary sucks. You don’t deserve the Flames, even Flames fans on here think they are immune to tax money going to their favourite team’s new arena, comparing the Flames situation in Calgary to the Leafs or Rangers etc.

    This proposal features $0 in public money all told. It’s a joke. Any smart business owner would do exactly what KK did, walk away from the table and leave Nenshi to carry out his usual public image doctoring. Pretty clear, you either contribute public money that doesn’t come right back to you with interest at intervals set by the city or you lose the team. Seattle is a way better sports city than Calgary could ever hope to be anyway. I’m sorry to real Flames fans and to music fans that would gladly contribute the minimal amount of cost that would reach them personally to have an adequate entertainment hub for the Flames and for the city, but Calgary doesn’t deserve the Flames.

    Sorry, I was all for a new arena and Calgary keeping the team but this arena saga has reinforced why I’m really happy I don’t live in the city anymore. The sense of entitlement is jaw dropping and grip on reality is non-existent compared to every other Canadian city I’ve lived in.

  • Newbietwo

    You know there is a real problem in Calgary with rose coloured glasses and it started a good fifteen odd years ago.. I remember Sarcee Trail being a one way lane.. two thirds of neighbourhoods werent even there and then governement chose to drive development by bloating real estate so your moms and dads bowness house went from being worth $200k to $850k like that..

    That kind of fake wealth took hold of the city and now we are left with these metro sexuals all with engineering degrees that think this is how the world works.. mommy help me with a down payment on my house please.. mommy I need $200 jeans.. mommy “McRibb” I want I want I want..

    Now look at the reality.. Business is stagnant.. Calgarians debt ratios are highest in the country and no one has yet learned a thing..

    Do not forget Calgary was a Shyte hole just 15, 10 years ago.. “Edmonton is still a Shyte hole”

    The arrogance to think you don’t need public private partnership makes me laugh.. the blatant stupidity to rather keep things stagnant makes me laugh.. The Trudeaus, Nenshi’s makes me laugh..

    This is Calgary! This is cowtown.. this is conservatives town and traditional ways of life.. This leftist and socialistic Bernie like perspectives will never last because too many will not let it because of that tradition..

    If you think this is just ownership using politics think again.. there will come a time and I’m telling you that time is 15 months from now that if no arena deal is met the flames will either be sold or setup for sale and relocation..

    These owners are older and looking for legacy and you are basically giving them a slap in the face and saying yea no thank you..

    This is what happens when mom and pop become rich over a little house they owned that blew up in price.. the result are kids that never become men and have no idea of how things actually work in this world

    • dontcryWOLF

      Wow. That was some epic rant about real estate prices going up…from a guy who earlier said that he is in real estate. Some serious irony there.

      Then..you talk about “traditional calgary” and conservatism and how not giving public money to a private business is a very socialist thing to do. I don’t know how you reconcile that irony in your own head, but doesn’t work in mine.

      Final point, I was born in this city, and lived close by all my life. I will certainly not abandon it over some stupid arena deal. If you all hate what it’s become, than Don’t let the door hit you, as they say.

      • Newbietwo

        And just for the record.. if officials aren’t driving economic development it defeats the process.. but we now tend to elect overtly emotional beings.. everything seems to be a reaction and it is laughable.. Calgary Economic Development is setup for public private partnerships.. East Village was built on that exact principle.. Nenshi thinking he could convince Amazon to move to Calgary “hahaha” that itself is based on public and private partnership.. you think the city won’t give anything up f that’s to happen?

        Oh and hey me social the Olympics is a public private setup hahaha

        • Flames fan since 83

          The City seems open for Business/Civic partnership. Courting Amazon is a very good example of a city offering tax assisted incentive for them to move to Calgary. That is smart business practice by the City.
          The Calgary Flames are NOT the same as Amazon in my estimation. They are already here, and by several accounts the Flames are tied/handcuffed/invested in this city. In the end, there will be Tax money and Flames money and User money. To me, this is all in negotiation, and the City has the upper hand. (because the Flames are very hard pressed to up and move to greener pastures as outlined many times here on FN). You can’t blame the great business men/women whom are trying to get the best deal for their company. But you also can’t blame the City for also working the best deal for Calgarians.

    • X Man

      Reading through the comments it’s pretty clear Newbietwo has lost this debate.. What we are seeing here is the dying gasps of an unfortunate relic whom evolution has deemed to be obsolete… Now, we are forced to witness his final, pathetic whines and moans as he seeks to blame the politicians for all of his problems, his failings, and his defeat… Poor fella… Take care Bud, it’s going to be OK…

      • Newbietwo

        Or maybe you have forgotten what it means to be a Calgarian.. a flames fan and what it represents..

        Maybe you have forgotten the culture and what hockey has meant to this city and it’s people and families.. or what loyalty used to be

        But hey like you all say.. it’s the fault of business.. it’s all their fault and it’s all on them

        • dontcryWOLF

          Personal attacks are the weapon of the weak in debates. I’m not going to go down that road with with you.

          As for the culture of Calgary, I’ll say that the my understanding of this (business culture) is based in capitalism. The premise of capitalism is that it acts seperately from government. What you are suggesting is not that. It’s fine if you disagree of course, but please don’t pretend you’re upholding conservative values.

          Everyone in Alberta complained when Bombardier got gobernment handouts (me too), yet here are all these people claiming to be conservatives saying we should do the same here. I’m baffled.

          As for Amazon moving here. That’s not a position of municipal leverage here. They would be new, and can pick from lots of cities. The flames, however, cannot. There is no other better market for them, and I’m sure they and city council know it. Let’s also not compare a high paying full time software tech job with a 4 hour a week job selling popcorn. Sure, they’re both jobs, but the comparison ends there.