The Calgary Flames are walking away from arena negotiations with the City of Calgary, according to Ken King’s announcement. King was vague on details about what the sticking points were in the negotiations, and evasive about how much the Flames were putting up.
The Globe and Mail’s Al Maki and Carrie Tait – both respected reporters who would likely be in a position to have sources in the know – have unearthed details about the reported last offer from the City.
Calgary offered to pay for one-third of the arena, in equal instalments over a number of years, according to a source. The money would have to be paid back. The ownership group, according to this proposal, would cover another third of the total cost and surcharge on tickets would pay for the remaining third, the source said.
The Flames organization rejected the offer, the source said.
Let’s say that the building was going to cost $500 million just as a ballpark figure. Under this scheme, the City would loan the Flames $167 million, the Flames would front $167 million more, with the remaining $167 million coming from a ticket tax. For reference, the original proposal for CalgaryNEXT had a cost estimate of $890 million, with the Flames fronting $200 million, the city $200 million, the ticket tax $250 million and a Community Revitalization Levy $240 million.
If this reported scenario is close to accurate – and it’s an anonymously sourced report, so take it with a grain of salt – then the Flames would be putting up more money up front (for “just” a building for the Flames) and having to pay back the city’s contribution.
From the City’s perspective, straight-up giving the Flames money for an arena seems like a very hard sell given the current economic situation – and the various funding priorities the local government has – and even loaning the Flames more money would be a tough thing to justify ($200 million sounds like a lot of money, even if it’s a loan).
The Globe report probably isn’t 100% accurate, but at the very least it can probably provide a rationale as to why the meetings between the Flames and municipal leaders have been as unproductive as King claims they’ve been.