You have to give the owners of the Calgary Flames points for creativity. Just when it seemed like every tactic in the taxpayer-money-for-sports-arena playbook had become familiar enough that the public was generally wise to the racket, here come the Flames with a new wrinkle.
In announcing late on Monday the deal-in-principle between the city, Calgary Sports and Entertainment Corporation (CSEC) and the Calgary Stampede to build a $550-million arena to replace the rickety Saddledome, the parties said that council will vote formally on the deal next Monday. So, in less than a week. Four business days, really.
And so, the time for sober consideration of the proposal, with all the financial ramifications of a multi-decade business arrangement involving hundreds of millions of public dollars that it entails, has been cut to next to nothing. The pitch to the city’s taxpayers has all the grace and subtlety of a clearout at a furniture outlet. “Buy this arena NOW before the deal is gone! You can’t afford to miss savings like these! AM I CRAZY? NO, BUT MY DEALS ARE!”
If it looks to the reader like the urgency to get this deal approved is motivated by the desire to avoid much in the way of public scrutiny, then I applaud the reader for their insight. The stated reasons, which are that council takes a summer break after next week, and also some vague desire to capitalize on “momentum,” ring hollow in the context of a debate over the funding of a new arena that has lasted more than a decade. The Flames ownership group, led by billionaire Murray Edwards and including several other wealthy oilmen, has been trying to get this thing going for ages, and could surely have allowed for more than a few days of consultation before council had to commit a massive chunk of its capital budget to their project. Especially a council that is currently cutting $60-million from its operating budget.
But with time and scrutiny comes questions, and the people involved have recent experience with how that can turn out. CSEC previously pitched a new arena as part of a massive multi-venue redevelopment project that was scuppered as soon as the city did its own analysis and determined that costs would have been as high as double the original estimates. Then the proposed 2026 Olympic bid rolled around, and though a new NHL-sized arena was not part of it, there was always a chance that something could have been tacked on had Calgary been awarded the Games. Momentum, you know. Instead, the opposite happened, with the public shooting down the Olympic proposal once the financial particulars had been fully aired and vetted.
Now council and CSEC are back with a new arena plan, and there won’t be enough time for serious questions to be asked and answered before the thing is approved. The best way to avoid opposition to a big capital-spending project is to not allow any time for opposition to mount.
And there would be reason enough for taxpayers to oppose it. It doesn’t appear to be as disastrous as the arenas built entirely on the public dime, or as ruinous as those that are constructed in the hope that a major-league team will eventually decide to come play in it. But, still: The city plans to spend $275-million to build the facility, plus another $15.4-million on demolition and land costs, and in exchange it will collect a two percent ticket tax and receive a sliver of the naming-rights money over the next decade, while handing over valuable land around the arena for future development. The city would also own the building, which sounds good but is meaningless: CSEC would operate it for 35 years and collect the profits during that time, at the end of which the arena will be almost certainly declared outdated and worthless. (See, for example, the Saddledome.)
Relative to some of the other arena swindles and stadium boondoggles that have been perpetrated on other cities (hello, Quebec City), this arrangement is more palatable, but that’s also a sad admission of how ingrained the arena-racket has become. The buildings themselves cost a fortune, and sports teams don’t necessarily make huge yearly profits, so even wealthy owners can claim that they need the public to subsidize construction costs. Enough teams in enough markets have pulled this off for long enough that everyone is kind of numb to it. A deal like this one, which is essentially less of a bad thing, ends up looking comparatively decent. And no one from the team side ever mentions the fact that the real money in owning a franchise isn’t in operating profit, it’s in the franchise values that, in good markets, increase exponentially over even a modest amount of time.
Consider that Calgary plans to pay $12.4-million just to knock down the Saddledome under this plan. The Flames owners, meanwhile, will receive about US$20-million as their share of the expansion fee coming from the new Seattle franchise. They received about US$16-million as their cut of the Las Vegas fee a couple of years back. They will kick in $1.4-million of the demolition costs. How sporting of them.
Even Calgary Mayor Naheed Nenshi, once the guy who insisted that he wouldn’t be pushed into a bad deal by Flames ownership, appears to have tired of the fight.
The taxpayers of his city might have felt otherwise, had they been given the time to do something about it.
Copyright Postmedia Network Inc., 2019