ARENA IMPASSE DEEPENS
Flames president, mayor dig in defending cost-sharing positions
The city’s latest offer to pump $130 million in cash and $55 million in other benefits into building a new arena in Victoria Park is extremely generous, Mayor Naheed Nenshi said Friday.
But Calgary Flames president Ken King, in a Friday morning news conference, said the city’s offer is misleading because whatever the city commits would eventually be paid back by the club.
That city offer — which would leave ownership of a $555-million arena with the Flames, along with revenues generated from it — was rejected by the owners of the NHL club.
In what the city is calling a threeway cost split, the city would inject $185 million in cash and other value into the project; the club would pay $185 million in cash; and the remaining $185 million would come from a facility ticket surcharge.
Nenshi said the city’s position is so attractive, “some will say the city is giving away too much.”
Along with the $130 million in cash, to be recouped in future property taxes and possibly other means, the city agreed to pay the $25 million cost of demolishing the Saddledome and the $30 million value of land north of the existing arena.
Where the city’s $130 million would come from is still “to be determined ... It could come from public savings, from other projects or in separate debt,” said Nenshi. “We’d always have to specify how we’d pay that back.”
The mayor also laid out the notion the city could be an equity partner in the Flames operation.
“The city somehow needs to share in the upside, if we want to share in the costs,” said Nenshi, adding all but two city council members support the current city deal.
King noted the city’s $130-million cash infusion would be paid back by the Flames in taxes, an equity share or some other mechanism.
He added the proposed ticket surcharge would come from the Flames operations, and thus would actually be revenue from the team.
“We’re not only paying for everything but more, given the incremental taxes, so it’s all Flames revenue,” said King. “If we thought that model would work, we’d save everyone’s time and get on with life.”
The Flames’ ownership group will unveil details of its proposal sometime next week, said King, who added he doesn’t know what it’ll take to get both sides talking again.
“Their message is loud and clear: they’re not interested in our deal and we’re not interested in theirs,” he said.
Talks between the two sides stopped at the end of July.
Last Tuesday, the Flames parent company, Calgary Sport and Entertainment Corp. ( CSEC), surprised the city by saying it was no longer pursuing an arena deal due to frustration over months of non-productive talks.
A source has told Postmedia that CSEC had sought a deal that would see the city fund 52 per cent of the cost of a $500 to $600 million arena, and had at one point asked for a veto on what type of development could occur in its vicinity.
King has said such a cost-sharing pact would be “very fair” and added the club had sought a similar fifty-fifty shared deal on the proposal to build a sports complex in the downtown’s west end — the socalled CalgaryNEXT project.
King also said it is not true there was a proposed request for a development veto, but he added his organization would want to participate in development decisions.
The club wasn’t threatening to leave Calgary, King added, saying the Flames are determined, instead, to make the best possible use of the Saddledome.
The Flames, the NHL and many others believe the 34-year-old Scotiabank Saddledome is obsolete, non-competitive economically and needs to be replaced.
NHL commissioner Gary Bettman has made several visits to the city in recent years to push for a new building, including last Tuesday when he suggested Calgary voters should deliver that message in the Oct. 16 civic election.
He’s said the club “has options” in the absence of a new arena.
Nenshi said he was skeptical the club would leave such a lucrative hockey market like Calgary, even to Seattle, which has just reached an agreement for a privately-funded sports complex that could host an NHL team.
“You’d certainly sell more tickets here than you would in Seattle,” he said, while flanked by city councillors Shane Keating, Druh Farrell, Gian-Carlo Carra, Peter Demong and Richard Pootmans.
One of Nenshi’s mayoral challengers, Coun. Andre Chabot, said revealing the details of the city’s arena proposal was negotiating in bad faith and he questioned where the city’s $130-million cash contribution would come from.
“Is there an intent for that to be paid back? It doesn’t say that,” said Chabot.
“They’re not interested in our deal, and we’re not interested in theirs,” Calgary Flames president Ken King, left, said Friday about the ongoing divide between the team and city hall over a new, $555-million arena to replace the Saddledome. Mayor...
Mayor Naheed Nenshi floated the idea on Friday that the city become an equity partner in the operation of the Calgary Flames.
Calgary Flames CEO Ken King said Friday the team will present a new arena proposal sometime next week.