September 15, 2017 7:54 am
Updated: September 22, 2017 9:22 am

Calgary mayor Nenshi releases details of city’s latest arena offer

WATCH: Calgary Mayor Naheed Nenshi thought negotiations with owners of the Calgary Flames on a new arena were pretty close.

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Calgary Mayor Naheed Nenshi and members of city council gathered together on Friday to release details of the latest arena funding offer they presented to the Calgary Sports and Entertainment Corporation (CSEC) before talks apparently broke down.

Nenshi’s announcement came after comments made this week by Ken King that the CSEC was no longer pursuing an arena deal with the city after hitting an impasse.

READ MORE: Flames no longer looking for new arena in Calgary: Ken King


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Nenshi then publicly refuted King’s comments on Wednesday, saying the city had made a “very fair” offer, one he felt most Calgarians would see as “eminently reasonable.”

“As we have stated before, it was very disappointing to hear the position of the Calgary Sports and Entertainment Corporation earlier this week,” Nenshi said on Friday.

“Earlier this week I presented a vision, a bold vision, of how an arena can play a really important role in a new cultural and entertainment district in east downtown, tying together many investments that this council has prioritized over time.”

“It’s a fair proposal – but we’ve always been willing to keep talking. We’ve never stepped away from the table.”

But the president of the Calgary Sports and Entertainment Corporation (CSEC) said there hasn’t been a “table” for a month-and-a-half.

WATCH: Ken King responds to the City of Calgary’s arena proposal

Ken King suggested the city let the process drag on too long and said if they were not planning to accept the Flames’ proposal, they should have said so right away.

“On July 31 we met with them behind closed doors,” he said. “And we expressed our position to them, we expressed our frustration. And we surrendered. That was the word I used, ‘we surrender. It doesn’t look like it’s going to work.’ They were there, they knew we were clear.

“So this mythical table that we’re all supposed to be at, hasn’t existed since that day, July 31. And we haven’t met since.”

King said he’s no longer trying to convince city hall of anything, adding, “that has clearly failed.”

“They’re not interested in our deal. And we’re not interested in theirs.”

WATCH: Ken King says the deal the City of Calgary has put forward for funding a new arena is worse than what they have now with the Saddledome

What the City of Calgary’s arena proposal included

Under the City of Calgary’s latest funding proposal, the total cost of the new arena was pegged at $555 million plus indirect costs.

The city proposed a funding formula where they would pay a third of the total cost, Flames ownership would pay another third and users would pay for the final third through a ticket surcharge. Each share would be $185 million.

“The city’s contribution includes land valued at $30 million, interim maintenance and eventual demolition of the Saddledome (valued at $25 million) … and a $130 million cash contribution from non-property tax sources for a total project contribution of $185 million,” Nenshi added.

In the city’s offer, the CSEC gets 100 per cent of the revenues and profits from the arena.

“The goal of building a new arena is not to win a Stanley Cup. It’s not to invest in a better team on the ice. The goal of building a new arena is to make more money,” Nenshi said. “We’ve engaged sports economists who are the best in the world to give us a look at what a new arena makes. It makes a lot of money.”

WATCH: News Talk 770’s Rob Breakenridge and 630 CHED’s Ryan Jespersen join Global’s Scott Fee to discuss the City of Calgary’s latest proposal for an NHL rink and how it compares to the process Edmonton underwent to build Rogers Place.

“As a result, there is profit here. And our argument is that the city needs to share in the upside, if we’re going to share in the cost,” he said. “One of the arguments is around ownership, and in this current proposal, CSEC would own the arena.”

Nenshi said as the CSEC would be a private landowner, they would also pay private property taxes on the building and on the land.

“Everybody pays property tax, it’s not a ‘rent to own’ situation.”

WATCH: Nenshi releases the details of the city’s latest proposal for a new arena after CSEC announced they have ended negotiations.

“The city has always been open about having a conversation about this,” Nenshi added. “If it makes more sense for the city to own and the [Flames] owners to pay rent we can absolutely look at that. If it makes more sense for there not to be rent, but a revenue-sharing agreement we can look at that.”

“We’re fully open to fresh and innovative ideas.”

LISTEN: Rob Breakenridge’s thoughts on Ken King’s response to Calgary’s NHL arena offer

What are the ‘indirect’ costs?

In addition to the city’s $185 million in direct costs, the city said it will incur indirect costs related to infrastructure to support the arena and redevelopment in Victoria Park in the amount of $150 million, excluding the cost of utilities and the LRT station, which will also be paid for by the city.

According to Nenshi, the infrastructure costs include “an extension of 17 Avenue through the Stampede grounds to 4 Street SE, as well as a new underpass … probably at 6 Street SE, serving the community of the East Village and linking [the] East Village to Victoria Park.”

“There will also be the cost of the Green Line that runs through the neighbourhood, and the Green Line station. The final cost of that are being [bid on] right now and have not yet been finalized. As well as there do need to be utilities upgrades to make sure everyone can flush the toilet and get clean water out of the taps… and the city would be responsible for all of that.”

BELOW: A list of other NHL rinks in Canada including ownership, capacity and cost:

But King called those things “purely and unadulteratedly gratuitous.”

“These are not incremental costs,” he said. “If we don’t go ahead with this project, the only thing that’s going to be different relative to those costs, is the absence of our funding. Because they’re going to build underpasses and Green Lines and extend 17 Avenue. So let’s really be straightforward and honest with this process.”

King said there’s been lots of conversations around “public benefit” and how the city defines it.

“I think what they want is to loan us some money and have it paid back. If that’s the definition of public benefit, then say so… So if you want a win-win, tell me what win-win looks like, and I think you did this morning, and we think that us paying 120 per cent of the project isn’t exactly that.”

Ken King says Flames would pay ‘120%’ under city’s proposal

King held his own press conference later Friday morning, saying the CSEC has a “different interpretation” of their plan.

“Their proposal has us not only paying for everything, but more, when you consider incremental taxes,” he said. “Flames’ cash comes from Flames’ revenue—I think we all agree on that. User fees comes from Flames’ revenue, I think we can all agree on that. And in whatever form they want this payback, that comes from Flames’ revenue, as well.

“So it’s all Flames’ revenue.”

King continued to say the notion of a land contribution priced at $30 million was “an accounting process for [the city]. They are not buying the land and we are not owning the land.”

The details of the latest proposal from CSEC weren’t included in either press conference; King said they would be released next week.

WATCH: When asked about blueprints for a new arena Ken King says it’s innovative and never been done before.

“Given that we have not received authorization from the Flames owners to release their details, we won’t be releasing them,” Nenshi said, adding the newest offer wasn’t “particularity different” from an offer they previously made public.

“The City has been—and continues to be—willing to discuss all elements of this proposal, and everything remains on the table for negotiation.”

“The idea always was to take this to Calgarians for their feedback,” Nenshi added, saying he believes the offer is a good mix of public money and public benefit.

WATCH: Naheed Nenshi says the future of the Saddledome was a huge topic of discussions with the Calgary Flames owners on a new arena.

Nenshi says narrative he doesn’t want a new arena ‘ain’t true’

“This is of course an emotional issue for many people,” Nenshi admitted. “I had a poster with Theo Fleury on my wall when I was a kid. I’ve been a Flames fan for a long time. But we have to put the emotions aside and we have to determine what is the right thing for Calgary, what is the right thing for the citizens, what is the right thing for the taxpayer.”

“We fully get how important the Flames are – this council gets how important the Flames are — and I think that it’s important to note as well that there are forces out there that really want to personalize this,” he added. “This is not about the mayor vs. the Flames.”

Watch below: Nenshi says a new arena for the Calgary Flames is a decision where emotions need to be taken out of the equation.

“I want to be very, very clear. As with every major negotiation that the city gets into, council sets a mandate … and this council has very overwhelmingly set this mandate. We have a team of very senior staff who sit at the table and negotiate … they have had 40 plus meetings about this.”

“The narrative that me or that council don’t want a new arena – it just ain’t true.”

WATCH: Ken King says the Calgary Flames didn’t raise a new arena as an election issue, but Naheed Nenshi did with his vision for Victoria Park.

King refuted that he had any participation in creating narratives about what Calgary politicians like or want.

“This notion that we are painting someone or forcing someone to look like they don’t like hockey or sports or something…I don’t know what they like or what they don’t like and I don’t really care.

“I assume they like our city and like us, I assume they’d like to do the right thing for the city.”

WATCH: The City of Edmonton had some tough negotiations with the Edmonton Oilers to get Rogers Place built. Edmonton mayor Don Iveson told Global News on Friday he understands what the City of Calgary is going through as it tries to negotiate a deal to build a new arena with the Calgary Flames.

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