The Flames proposal included funding in the amount of $225M derived from a Community Revitalization Levy ("CRL").
As well, the Flames would contribute $275M towards the construction of the new City owned arena; similar to prepayment of rent for 35 years of tenancy.
A "CRL" (Community Revitalization Levy) consists of brand new monies which would not exist in the absence of the creation of a new development project, such as a new arena. These funds are created to help pay for major urban projects and redevelopment of certain city lands. Incremental taxes are generated as a result of new development (hotels, condominiums, commercial) in the immediate area. The best example locally is the East Village development. Monies created from a CRL, to fund an arena, or other major projects, do not come from existing tax sources. These funds only come into existence because something new is built or developed that generates brand new revenue.
The City's proposed funding model, as presented, did not accurately reflect the total Flames funding required. Total funding by the Flames would equate to $613M, or 123% of the cost of the building.
|Original City Proposal||($130M)||($370M)||($500M)|
|Impact of Incremental Property Tax||$243M||($243M)||$0|
|Total Benefit to City(Cost to Flames)||$113M||($613M)||($500M)|
The cost for Roger's Place was $484M funded by the City of Edmonton's contribution of $226M derived from Community Revitalization Levy, new parking revenues and other sources. The Oilers contributed upfront cash of $20M; the remaining $238M was financed by the City of Edmonton and will be paid back by the Oilers over a 35 year period in the form of rent of $113M and user fee of $125M.
In a "small market" city, even one with an NHL team, a privately funded arena is not economically viable. The City's proposal is just not workable (or even for that matter, "fair", based on other arena deals in comparable cities). As a result, after over two years of discussions, we see absolutely no basis upon which a new arena agreement can be achieved with the City, and we have concluded that there is no point to continue the pursuit of a new arena in Calgary. Many, including us, believe Calgary is a terrific place for NHL hockey and we certainly have great fans. As such, we will strive to operate, as we have for the past 34 years, in the Saddledome for as long as we believe it is feasible.
For more than a decade, the Flames have had a vision for Calgary and our fans - a place where all Calgarians can unite in active living, sports and entertainment - a centre for the community and a destination for world class events. A new arena would be a catalyst for a thriving and active community we can all enjoy. When evaluating a project of this magnitude, there are many factors to consider including the economic, social and cultural impact as well as strategic development.
Summary data shown below. For Full analysis of public benefit:
We very much appreciate your patience and support through this process. The above information is provided as promised last week. Going forward all of our efforts and energy will be focused on our primary passion of providing the best sports and entertainment for our fans and citizens in our existing facility.
The Calgary Flames