Calgary Flames New Arena Update

[ExtraSlow]

What value do you as an individual put on the ability to host these "top end" concerts?

Would you pay an extra $30/yr for a decade? $100/yr for 10 years?

[ExtraSlow]

Not new info, but a good summary of the economics of the Edmonton stadium.

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Economist Calls Edmonton's Arena Deal "Among the Worst in Canadian History"
By ryan_batty  @ryan_batty on Jan 28, 2013, 3:37p 18


An economist weighs in on Edmonton's arena deal. He doesn't like the deal at all.

In the debate surrounding the City's decision to help fund the Oilers new downtown arena I've been asked by some on the pro side of the argument why I think I'm smarter than Council. A fair question since I'm an engineer by trade and not an economist. But, as I like to point out, neither are the people on Council who are making this decision so it's just as possible that they're the ones who don't know what they're talking about.

Luckily for everyone, Mike Moffatt, an assistant professor at the Richard Ivey School of Business, has decided to weigh in on the arena deal reached by Council and the Katz Group last week.

As far as deals go, this may be among the worst in Canadian history. Study after study after study shows that sports teams and arenas generate little economic benefit. While lots is spent at the arena this is almost entirely money that would have likely been spent elsewhere in the local economy. The net benefit is minimal. The City of Edmonton is on the hook for $219M in this deal and even the most generous of economic assumptions doesn’t get you one quarter of this back in benefits.

Mr. Moffatt goes on to question the idea of the province funding more than $100M of the project costs despite running "an astronomically large deficit." He even manages to reference the disaster that has become the Maimi Marlins new tax-payer funded stadium which is the worst case scenario for stadium deals. It's a 1:14 long video that won't leave you feeling good if you're an Edmonton taxpayer.

I understand those that want to believe that Council has done a good job in striking this deal but the evidence indicates that they probably haven't.

[Nitro5]

Originally posted by blownz
This should have nothing to do with Edmonton vs. Calgary. A high end arena in both cities will be a benefit overall. Rumor was last time Madonna had a tour she skipped the entire province because the Dome couldn't fit her stage. This time she is coming to Edmonton thankfully (and hopefully with a second date) but I think two high end arenas will help more than hurt.

Wait are you saying the only thing standing between me and a Madonna concert is dropping millions of dollars of public money on a new arena?

Can't say I'm sold

[ExtraSlow]

Fixed that for you.

Originally posted by Nitro5


Wait are you saying the only thing standing between me and a Madonna concert is dropping hundreds of millions of dollars of public money on a new arena?

Can't say I'm sold

[suntan]

Originally posted by ExtraSlow
Not new info, but a good summary of the economics of the Edmonton stadium.

- - - - - - - - - -

Economist Calls Edmonton's Arena Deal "Among the Worst in Canadian History"
By ryan_batty  @ryan_batty on Jan 28, 2013, 3:37p 18


An economist weighs in on Edmonton's arena deal. He doesn't like the deal at all.

In the debate surrounding the City's decision to help fund the Oilers new downtown arena I've been asked by some on the pro side of the argument why I think I'm smarter than Council. A fair question since I'm an engineer by trade and not an economist. But, as I like to point out, neither are the people on Council who are making this decision so it's just as possible that they're the ones who don't know what they're talking about.

Luckily for everyone, Mike Moffatt, an assistant professor at the Richard Ivey School of Business, has decided to weigh in on the arena deal reached by Council and the Katz Group last week.

As far as deals go, this may be among the worst in Canadian history. Study after study after study shows that sports teams and arenas generate little economic benefit. While lots is spent at the arena this is almost entirely money that would have likely been spent elsewhere in the local economy. The net benefit is minimal. The City of Edmonton is on the hook for $219M in this deal and even the most generous of economic assumptions doesn’t get you one quarter of this back in benefits.

Mr. Moffatt goes on to question the idea of the province funding more than $100M of the project costs despite running "an astronomically large deficit." He even manages to reference the disaster that has become the Maimi Marlins new tax-payer funded stadium which is the worst case scenario for stadium deals. It's a 1:14 long video that won't leave you feeling good if you're an Edmonton taxpayer.

I understand those that want to believe that Council has done a good job in striking this deal but the evidence indicates that they probably haven't.

Pretty much this. There's been tons of these studies done.

They're literally better off taking that money and building rehab housing for drug addicts. At least then someone benefits.

[FraserB]

Originally posted by speedog
So as usual, no news about a new arena here in Calgary and yet, glass is going up on Roger's Place in Edmonton - that is going to be a great facility and will allow our neighbors to the north to continue to get acts that Calgary cannot...


» Click image for larger version

If the Flames organization wants to build a new building, there is nothing stopping them. The acquisition of land by private entities is allowed, the construction of facilities by private entities is allowed, paying the city to tie in services and transit is allowed.

There is no real benefit to being able to host a concert or to have a hockey game take place. And we certainly don't need to give a private corporation millions in taxpayer dollars to build them a profit center. If there is truly a demand for this kind of infrastructure, then the Flames should have no issues getting the funding through either loans or ticket sales.

[ExtraSlow]

Since there will be inevitably some additional nearby infrastructure that needs upgrading, like C-train stations, bus terminals, roadway interchanges, lets say the total is around $500,000,000. Since there are (about) 500,000 homes in calgary, and the city makes it's money from property taxes, that means each homeowner needs to pay $1000 towards this arena.

Actually slightly more, since this project would be financed with debt, and there would be interest charges as well.

According to census data, I'm above average for income in this city, but I don't want to spend a thousand bucks on this arena.

[rage2]

With the way the economy and the finances are going, I'm 100% against the Flames building an arena right now, even if they have to pay for it themselves. Like ExtraSlow says, there's going to be a cost to the city regardless to upgrade infrastructure around the arena, and we can't afford it till the economic outlook is better. A new arena definitely falls into the want column.

I'd love to have a new arena to have a better hockey game experience, and to stop having to drive to Edmonton for concerts, but now is not the right time.

Assuming it's going into West Village, I'd say the time to build (Flames paying 100%) should coincide with when the city decides to upgrade Crowchild/Bow area gongshow.

[speedog]

Well I certainly wasn't looking to stir up any debate but apparently I have.

As far as the economics of the Edmonton arena deal, one can find studies that make it look either good or bad but certainly there will be a cost to Calgary taxpayers regardless of how any new arena or stadium or arena/stadium complex project is funded.

As far as the real benefits of being able to host a concert or to have a hockey game, there's plenty of businesses and non-profit organizations that benefit in a huge way from both the current arena and stadium that we have in Calgary - newer, state of the art facilities that could land bigger acts and events would only benefit these businesses and non-profits even more.

So the main argument is whether or not Calgary tax payer monies should be spent in any significant way towards any new arena or stadium or combination thereof and I don't believe the Flames or Stampeders will be moving from Calgary if new facilities aren't built in the very near future, but one can only continue to put lipstick on the two pigs we have here in Calgary for so long before they should be replaced.

So.....

When the Saddledome and McMahon are replaced (and they will be), should we be spending some Calgary tax dollars on their replacements - I am not adverse to spending some tax dollars because I am somewhat aware of how some local businesses and non-profits currently benefit from those two facilities. Non-profits for sure because I am involved with at least 2 non-profits that benefit directly from those two facilities and the events that they host. Yes, I know the argument exists that these non-profits could raise monies in other ways but this is a system that works very well and in some ways, is easier than having to sell chocolates or coupon books or what have you.

As far as businesses that benefit, yeah there's the argument that they shouldn't have to rely upon events to have a sustainable business model but the fact remains is that many businesses are based upon events held elsewhere - one only has to look at the closure of Race City some years ago and realize how that impacted some of the shops in Calgary who have either shut down and have had to drastically change their business model just to survive.

It is something that shouldn't be argued, the fact that businesses and non-profits benefit either indirectly or directly from the fact that the Saddledome and McMahon exist. Moving forward, we will have to sit down and justify any tax dollars that will go towards new facilities, either directly or indirectly and there will be Calgary tax dollars spent - my justification will be these businesses and non-profits that see benefits from such facilities, the difficulty will be determining what the right amount of tax dollars we should spend.

[suntan]

Wouldn't you rather want the $200 million directly to benefit your non-profits? Why bother with the middleman?

[blownz]

Originally posted by Nitro5


Wait are you saying the only thing standing between me and a Madonna concert is dropping millions of dollars of public money on a new arena?

Can't say I'm sold

haha I agree, but I am just using that as a recent example. There are tons of concerts Calgary doesn't get due to the low ceiling in the dome.

As for who should pay for these types of buildings, I would say virtually every complex like this in the world is built with some degree of public funds, whether directly or indirectly. The benefit of a building like this for a city goes beyond just hockey.

That said there is enough money in the CFPL that they shouldn't get much IMO. And regarding timing, sure the city is going to be strapped for cash at a time like this, but the cost to start building an arena in this economy will be less then when it is booming again so it isn't all bad.

[speedog]

Originally posted by suntan
Wouldn't you rather want the $200 million directly to benefit your non-profits? Why bother with the middleman?

Not sure where you came up with a $200 million figure because I seriously doubt that the non-profits in Calgary and area don't benefit to that degree even over 20 years.

But to satisfy your point, most taxpayers would probably say nay to their tax dollars going directly to any of these non-profits - it is the Albertan and Calgarian kind of mentality. For myself, I would say no - I would rather see a non-profit at least earn the monies donated to them, not just handed out on a platter. Now if something could be set up to exchange manpower for donated tax monies, then maybe but again, the average Albertan/Calgarian would be adverse to this - better to have it hidden away a bit.

[HiTempguy1]

The roads in Edmonton will continue to fall apart, but at least we will get the best concerts!

[kenny]

Originally posted by rage2
With the way the economy and the finances are going, I'm 100% against the Flames building an arena right now, even if they have to pay for it themselves. Like ExtraSlow says, there's going to be a cost to the city regardless to upgrade infrastructure around the arena, and we can't afford it till the economic outlook is better. A new arena definitely falls into the want column.

I'd love to have a new arena to have a better hockey game experience, and to stop having to drive to Edmonton for concerts, but now is not the right time.

Assuming it's going into West Village, I'd say the time to build (Flames paying 100%) should coincide with when the city decides to upgrade Crowchild/Bow area gongshow.

Flames will probably want to start something by 2016 to take advantage of slower economy and lower costs of construction. City should also be borrowing to build infrastructure upgrades as it will be cheaper in the near term.

With all that said, West Village doesn't make sense for many reasons some of which you identified.

[suntan]

Originally posted by speedog

Not sure where you came up with a $200 million figure because I seriously doubt that the non-profits in Calgary and area don't benefit to that degree even over 20 years.

But to satisfy your point, most taxpayers would probably say nay to their tax dollars going directly to any of these non-profits - it is the Albertan and Calgarian kind of mentality. For myself, I would say no - I would rather see a non-profit at least earn the monies donated to them, not just handed out on a platter. Now if something could be set up to exchange manpower for donated tax monies, then maybe but again, the average Albertan/Calgarian would be adverse to this - better to have it hidden away a bit.

Yeah where the fuck did I get that number, because in fact the city contributed $279 million.

http://www.edmonton.ca/city_governme...agreement.aspx

[speedog]

Originally posted by suntan
Yeah where the fuck did I get that number, because in fact the city contributed $279 million.

http://www.edmonton.ca/city_governme...agreement.aspx

So you're going to assume that the same will be done in Calgary?

Really?

Different circumstances in Edmonton as best as I've been able to ascertain and I truly believe the Edmonton taxpayers are getting the shaft on this one despite the counter arguments I've seen. Plus, I don't think the average Calgary taxpayer has an appetite for such a "deal" - I know I certainly do not.

[Strider]

Originally posted by speedog
there's plenty of businesses and non-profit organizations that benefit in a huge way from both the current arena and stadium that we have in Calgary - newer, state of the art facilities that could land bigger acts and events would only benefit these businesses and non-profits even more.
[...]
I am not adverse to spending some tax dollars because I am somewhat aware of how some local businesses and non-profits currently benefit from those two facilities. Non-profits for sure because I am involved with at least 2 non-profits that benefit directly from those two facilities and the events that they host.
[...]
It is something that shouldn't be argued, the fact that businesses and non-profits benefit either indirectly or directly from the fact that the Saddledome and McMahon exist.

Since you said it at least 3 times, and it's directly contrary to this quote:

Originally posted by ExtraSlow
Economist Calls Edmonton's Arena Deal "Among the Worst in Canadian History"
By ryan_batty  @ryan_batty on Jan 28, 2013, 3:37p 18


An economist weighs in on Edmonton's arena deal. He doesn't like the deal at all.

In the debate surrounding the City's decision to help fund the Oilers new downtown arena I've been asked by some on the pro side of the argument why I think I'm smarter than Council. A fair question since I'm an engineer by trade and not an economist. But, as I like to point out, neither are the people on Council who are making this decision so it's just as possible that they're the ones who don't know what they're talking about.

Luckily for everyone, Mike Moffatt, an assistant professor at the Richard Ivey School of Business, has decided to weigh in on the arena deal reached by Council and the Katz Group last week.

As far as deals go, this may be among the worst in Canadian history. Study after study after study shows that sports teams and arenas generate little economic benefit. While lots is spent at the arena this is almost entirely money that would have likely been spent elsewhere in the local economy. The net benefit is minimal. [...]

Could you elaborate on how businesses and non-profits benefit so vastly? I haven't read the study after study after studies myself, but I'd be more inclined to believe that than an unsubstantiated post on an internet forum.

Would the benefit even come close to the amount of tax dollars spent on a new facility?

[MGCM]

Originally posted by HiTempguy1
The roads in Edmonton will continue to fall apart, but at least we will get the best concerts!

and the best road course in Alberta too

[speedog]

Originally posted by Strider
Since you said it at least 3 times, and it's directly contrary to this quote:

Could you elaborate on how businesses and non-profits benefit so vastly? I haven't read the study after study after studies myself, but I'd be more inclined to believe that than an unsubstantiated post on an internet forum.

Would the benefit even come close to the amount of tax dollars spent on a new facility?

No, I won't elaborate. I have posted about my thoughts in depth elsewhere in this forum, maybe even this thread, and don't wish to rehash the same old thing again.

Please reread what I have posted above to see that I have clearly stated that "I seriously doubt that the non-profits in Calgary and area don't benefit to that degree even over 20 years" with respect to $200 million. Please also refer to that same post above for more of my thoughts on this.

That said, I do know that there are numerous non-profits that currently realize monies through fund raising opportunities made available to them via events at both the Saddledome and McMahon - I am personally involved in 2-3 for sure and know of many others. Once again, the monies that these non-profits realize is no where near the amount of tax dollars that will probably be spent on any new facilities and it never will be and as I stated before, the general public would be in an uproar if their tax dollars went directly to any of these non-profits.

As such, there is a system in place that allows people, through these non-profits, to volunteer at events in exchange for monies being donated to their non-profit. With there being hundreds of events in a year between the two facilities, it is an easy way for people to work something into their schedule as opposed to beating the neighbourhood and friends/family with the usual chocolates/coupon books/pizza/what ever fund raising sales that anyone with kids has had to experience.

As for businesses, I'm not going to bother to comment other than to say that there are probably more than a few restaurants/bars that benefit from having the Flames or Stampeders in town -of course, I am probably way off base on this one. Never the less, I am not going to substantiate my views and what I know any further - I know what our non-profit has realized over the past 5-6 years and it feels much easier than hoofing chocolates or coupon books and has also allowed our non-profit to develop a bit of a family (maybe not the right word) because of how young junior and senior high aged athletes and their parents can volunteer along side university aged and Olympic bound athletes. Very good for developing a sense of community within the sport that our non-profit supports and something that selling chocolates or coupon books would never provide.

In closing, if any of you beyond members has a non-profit that is looking for a different way to do some fund raising then please PM me and I can put you in contact with the right people at the Flames -they are always looking for people and were/are woefully short at the Briar which is happening right now. That would be monies for non-profits which the Flames would've happily given away if the people were available to volunteer their time.

[ExtraSlow]

So, it's an inefficient money laundering scheme?