Mo Money, Mo Problems

With all due respect, Mr. King, it is about wealthy people.

It’s about rhetoric that’s been tried again and again over the course of recent history – justifying public dollars being spent on projects that will fill the pockets of a private enterprise. 

The issue is that we value sports teams too much. The economic impact of a new stadium – let alone the actual team – is minimal at best, and sometimes even a negative. It makes sense to a large degree – there is a temporary job boost while the stadium is being built, but that’s the same as every construction project. The vast majority of revenues are kept by the team, which is an isolated group (i.e., with little impact on buying and selling things in the local economy) within a larger organization (the NHL, not the city or economic area) and as such most of those revenues just sit there, not being injected into the public/local economy. The jobs created by the sports team themselves aren’t likely to change unless the stadium size increases exponentially, which it won’t since the Flames are having a hard enough time as it is to put butts into seats.

If the Flames are highly profitable (which they are, and don’t let Forbes’ valuations skew your views – I will expand on this in the future), then all they’re doing is allowing money to sit there, which helps only the Flames.

The team won’t move, for all of the same reasons Edmonton won’t: they make too much money. Even if they do, a market like Calgary (million plus population, oil money, vibrancy of the city, hockey loving) won’t be without a team for longer than a year.

But to the arena itself: there’s two main issues the Flames will run into here that the Katz group didn’t have to deal with in Edmonton: the first is that there is a severe lack of space in the downtown core to build another arena. Almost certainly if the Flames wish to pursue an arena downtown, they’ll have to buy an existing property, level it, clean it up, and then start building. That, of course, creates a whole mess of issues because it’s unlikely you’re going to find some company downtown that wants to move.  

The other is that Calgary’s downtown is not like Edmonton’s downtown. While Katz has been trying to sell his arena as a sort of “revitalization project”, the Flames will have to call their arena exactly what it is: a sporting facility.

The reason for this is quite simple: Calgary’s downtown is in need of exactly zero revitalization, and anyone who tells you otherwise is flat-out lying.

There are precisely three places that I can think of that would work for a new arena downtown, and trust me when I say that it needs to be downtown. (Why? Calgary’s urban sprawl has just made it too difficult to be able to get from one end of the city to another in an efficient manner. Think about it: if you live in Mackenzie Town, do you really want to have to drive or take a bus anywhere north of the Trans-Canada for a game? If you’re travelling that far, you’re starting to spend almost as much time driving as you are at the game.) The Flames owners also want it to be near a C-Train line, but relying on Calgary Transit to be the primary mode of transportation to and from a game is a nightmare right now, so that’s not exactly a good starting point.

The first is the one that is the most obvious: Stampede Park. There’s an existing relationship with the Stampede board, Edwards owns a bunch of the surrounding land and it’s a location that’s familiar. The issue with that plan though is that the Saddledome will have to come down in order to facilitate the extra parking needed, as the amount of land there that’s not being used for parking space during games is quite little.

The second possibility is in the East Village near the river, and I think that if the Flames go to council with this they’ll get some money for sure. Everyone knows about how much of a sinkhole the EV has turned out to be over the past two decades, but I feel like an arena project on the river could be looked at as a keystone development and get lots of funding as a result. The issue here is that it lacks C-Train stations, unless you want to park your car at the Zoo – but what’s 10 million for a new platform, right?

The third possible location I only heard about a week or so ago, and it’s currently where GSL Chev City sits. Apparently Edwards owns land on both sides of Bow Trail and into the industrial area near the Pumphouse. It’s an expansive piece of land, and right near the new West LRT stops by the old Science Center and the 5th Ave connector. Buying out a dealership of that size and scope wouldn’t be easy, but the Flames have more than enough capital to do so. The thing I find interesting about this location, however, is that it’s big enough to also have a football facility attached to it – which would work nicely as the University-owned McMahon stadium is really starting to show it’s age. The Flames would have a tough(er) time getting money from the council with this land though, as shutting down a business of that scope would have some economic impact.

Regardless of the location, the Flames are going to want money, and they’re going to bully the city with the prospect of moving the team. It’s going to be like a 6 year old who wants candy.

I believe there is a major difference between here and Edmonton, though: our Mayor isn’t one to be pushed around. It’s going to be an interesting power struggle, and I look forward to laughing at those who thought the Peace Bridge was a waste of taxpayer money but a new arena won’t be. I don’t doubt that the city will give some money to the Flames (and expect taxes to increase as a result), but if they’re doing that they need a substantial cut of the profits from the new arena to make the ROI worthwhile in both the short (<5 years) and long term.