Flames boss calls Cal­gary arena of­fer mis­lead­ing

Edmonton Journal - - CITY -

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.

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