Calgary city council is really going to approve $275m in Flames arena funding with no debate

The vote on putting $275 million (and maybe more — see below) in city money into a new Calgary Flames arena doesn’t take place until tomorrow, but it’s already becoming clear which way the council is going to go:

The majority of council members have indicated support for the deal, including Mayor Naheed Nenshi, who last week said the arena would create public benefit through “intangibles.”

“It’s about bringing community together. It’s about uniting people,” Nenshi said. “This deal makes sense on its own merits.”

Also, councillor Jyoti Gondek said a new arena was needed so that people could watch e-sports like League of Legends and Fortnite. With a straight face, presumably, though the Calgary Sun doesn’t say.

Meanwhile, a bunch of economists have noted the same thing I did here, which is that projecting $400 million in new city revenue over 35 years is not the same as $400 million today, which means the city will almost certainly be taking a loss on the deal — and that’s if taxes on new spending don’t simply cannibalize taxes on old spending, which will almost certainly be the case given that this is just a matter of moving an arena a few blocks away. Also, it’s not counting any cost overruns, an agreement on which “still needs to be worked out,” according to the Toronto Star, but the “expectation” is the city would be on the hook for 50% of them.

If that’s all somewhat confusing and seems to call for a more in-depth examination of the numbers, well, tough, because the council is voting tomorrow. This is kind of an amazing ending to a years-long arena debate where the city seemed set on holding firm against any significant public subsidies, but also kind of not amazing, because that’s how these deals tend to happen: not for a long, long while, then all at once.

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15 comments on “Calgary city council is really going to approve $275m in Flames arena funding with no debate

  1. Intangibles…. uniting the city… this is the language of failure, not of “a deal that makes sense for the city”, as the mayor stated years ago.

    Congratulations Calgarians, you are officially going to get fleeced.

  2. I should warn that occasionally people really publically-minded people accuse me of being cynical but it seems as if Calgary wanted to jettison a whole bunch of public workers first so they could have more money to spend on this project.

    I was going to call this the “Glendale effect” but in Glendale they waited until after their arena/stadium were in place for a while before fire, police, libraries, etc. were cut. This is so much more fiscally proactive.

  3. The headline says no debate, but the final paragraph refers to “a years-long arena debate”. So which is it? Nonetheless, being for ordered liberty and against limitless democracy, I don’t see how, even had there been overwhelming public and political support, taxing the unwilling for the private benefit of the few can be in anyway justified. You know, that old “consent of the governed” thing.

    1. There’s been little to no debate about the current proposal. There has been a years long debate about other possibilities, but not this specific one.

  4. Apparently some members of the city council are getting cold feet:

    “But Couns. Evan Woolley and Jeromy Farkas say allowing only one week for Calgarians to have their say isn’t fair — especially in the middle of summer — and they want the city to ask the Flames to allow council to delay their vote on the deal until the end of September.

    Acting city manager Glenda Cole said during Monday’s council meeting that she has forwarded that request to Calgary Sports and Entertainment Corporation (CSEC).

    “I have made the request and I will be providing all members of council with a response before 1 p.m. tomorrow,” Cole said on Monday morning.”

    I’m not sure why they need to ask the Flames for a delay instead of simply telling them to wait if they want that sweet public money, but that’s presumably why I’m not a member of the Calgary city council.

    1. IIRC, David, the agreement included deadlines for approval or rejection by council. So while it does seem high handed on the surface, if the Davison lead group of (negotiators) councillors did include hard timelines for approval in the agreement or MOU, it may be that the city would “need” CSEC’s consent to vary the deadline on this agreement…. lest the agreement be voided simply due to a missed deadline.

      I would suggest that no business seeking to partner with any municipality would make an open ended agreement that leaves them hanging for an extended or unlimited period of time (if nothing else, doing so commits capital to a project that may or may not ever go ahead), but including a 1 week drop dead date is ludicrous…. especially when what you are asking for is a new factory for your business paid for mainly by taxpayers.

      1. What John said. Also, Woolley and Farkas have been against the short deadline from the start — pretty sure they were two of the four councillors to vote against it last Monday. Asking the Flames for a delay is a nice touch, if only because it makes the team owners be the bad guys if they refuse to grant an extension, but it’s kind of a Hail Mary at this point.

        1. Hey Neil I need $40,000 to help start my food truck business. You only have 1 week to decide, so hurry up and talk to your banker already! I need a decision now.

          1. Let’s see, if I don’t approve the money right now, you might not let me give you $40,000 at all. And we can’t let that happen, so I guess, sure!

  5. Nenshi has done a 180 on this deal. Used to be the skeptic, now he wants to buy the city a coke and sing in perfect harmony. Did Flames ownership make a huge contribution to his re-election campaign?

  6. The reason why there is a short period between the agreement and the final vote is the City if Calgary does not want to galvanize public opinion against what looks like a very bad deal for taxpayers.

  7. The proposed new hockey arena gives hundreds of millions of dollars to the (mostly oil) billionaires who own Calgary Sports and Entertainment – and thus the Flames, the Calgary Stampeders, the Calgary Hitmen, etc. – and who also manage the city-owned Saddledome.

    They are: N. Murray Edwards (owner of oil sands miner Canadian Natural Resources Ltd [CNRL] and aerospace firm Magellan); Alvin Libin (owner of Balmont Investments); Allan Markin (CNRL); Jeffrey McCaig (owner of Trimac); Clay Riddell (owner of Paramount Resources); and Byron Seaman (owner of Bow Valley Industries). Forbes estimates Edwards’ net worth at $1.5 billion. The billionaire maintains a residence in London, England.

    This private clique tried to kick Nenshi out of office at the last civic election, so they could negotiate with someone more team-friendly. The most aggressive member of the city council pushing the scheme is a former employee of Edwards’ oil company. According to his own biography, city councillor Jeff Davison, head of the negotiating committee, “held various exploration and communications roles at Canadian Natural, one of Canada’s largest oil and gas producers” from 1999 to 2009. He has loudly proclaimed that public debate is a bad idea when you can instead have deals made behind closed doors. Following the private discussion of the council, Davison declared “We don’t need a $2 million engagement plan to take feedback in. There’s many, many ways that the public can let us know how they feel about this.”

    That will not include a plebiscite for sure. Calgary shot down public largesse for sports last November when 56 per cent of residents voted in a plebiscite to reject a $4-billion bid for the 2026 Winter Olympics.

    Every professional sports franchise in Canada has been enriched by similar pay-the-rich schemes. The false justification is always boosting the economy, as amply documented and exposed by the website Field of Schemes.

    Tony Seed, Amateur Sport (blog on wordpress)

    1. The only thing I can add to that, Tony, is that Edwards not only maintains a residence in London, he is considered a resident there… meaning he does NOT pay Canadian income tax on his (considerable) income as he is a non-resident.

      It really is the icing on the cake as far as hubris goes… demanding taxpayers fork over 50% (or more) of your new arena costs when you have taken technical steps to avoid paying income tax in the city in which you arguably still live and work.

      His companies, of course, are still subject to income and property taxes… but still. This is a whole new level of shamelessness.

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