Flames boss calls Calgary arena offer misleading
CALGARY Calgary’s latest offer to pump $130 million in cash and $55 million in other costs into building a new Flames arena in Victoria Park is extremely generous, Mayor Naheed Nenshi said Friday.
But in a hastily-called news conference on Friday morning, Flames president Ken King 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, who would keep all revenues generated from it, was rejected by the owners of the NHL club.
In what the city is calling a threeway cost split, the club would pay another $185 million in cash while 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 the land north of the existing arena.
Where the $130 million in city cash will come from is still “to be determined ... it could come from public savings from other projects or in separate debt — we’d always have to specify how we’d pay that back,” said Nenshi.
He even 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 that all but two city council members support the current city deal.
That was assailed by King, who insisted the city’s $130-million cash infusion would be paid back by the Flames in taxes, an equity share or some other mechanism.
And, he said, a ticket surcharge comes from the Flames operation, thus is 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 club will unveil details of its offer sometime next week, said King, who added he doesn’t know what it will 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 ended in July.
Last Tuesday, the Flames parent company, Calgary Sport and Entertainment Corp. (CSEC), shocked the city by insisting they were no longer pursuing an arena deal due to frustration over months of nonproductive talks.
A source told Postmedia the Flames’ parent organization had sought a deal that would see the city fund 52 per cent of the cost of a $500-$600 million arena, and had at one point asked for a veto on what kind of development could occur in its vicinity.
Their message is loud and clear. They’re not interested in our deal and we’re not interested in theirs.