Wednesday, August 06, 2008

 

Hockey draft?

This is good stuff.


The good people at the Canadian Taxpayers Federation have done us a great service, and obtained (via FOIP requests) some early drafts, c/w edits, of City Shaping (the report from Edmonton's poorly named Arena Feasibility Committee). Pictured above is a hand edit from Northlands volunteer Lyle Best, deleting an unwanted reminder that the last four NHL arenas constructed in Canada were all 100% privately financed.

I don't think anything that the CTF found (release and wonderfully illustrative pdf links here) will come as a huge surprise to readers of this site. However, it's always good to be reminded just how narrowly the plan's proponents want to frame the debate, such as it is.

At left we have part of an early draft that attempted a higher level of intellectual honesty: telling us that the last 4 rinks were built with private dough, and then explaining why Edmonton, in 2008 and beyond, is different (what with modern creative financing models, among other things). The final report scrubbed the whole discussion of Canadian comparables, preferring to focus on U.S. cities (or to use the report's phrase, "U.S.-based cities") and facilities whose funding and development models more closely match the Mandel/Best/etc. vision. Surprising, no; disappointing, sí.

A filet mignon on a flaming sword goes out to Scott Hennig and the CTF for their instructive research here; you can support this and other similarly fine work by going here. Lastly, you should check out their blog; today Hennig introduces all this stuff, and also has links to the unreleased HOK Sport report ("heavily redacted") and the Convention, Sports, and Leisure International report, neither of which I've checked out yet.

Labels:


Comments:

Great work by the taxpayers. Terrible disservice to the city done by Lyle Best.
 


Wow! I can't wait to read the front-page coverage of all of this background in the Journal.


Wait, what?
 


Thanks for the links. Took a look at the CS&L report on the CTF site.

Edmonton has barely 50 potential customers per available seat (nearly the lowest in the league) and nearly the lowest number of corporations to sell to, yet the city needs a new arena?

Is there a 25-year waiting list for tickets like the Denver Broncos and Washington Redskins enjoy?

The team can't even make a case that a new arena is need period. Much less needed downtown (one issue) or at taxpayers' expense (a separate issue).

Speaking as someone likely to be paying out of his income-taxed @zz for the next 25 years for the 2010 circle-jerk in Vancouver/Whistler, I don't also want my Edmonton property taxes used to build an entirely unnecessary facility.

But as the Lose-On-Foods Memorial Arena in Victoria and the 2010 Five-Ring Circus in Vancouver have recently proved, a mayor bent on handing land concessions and cash to his corporate pals = 1 vote on council. Me = 0 votes on council.
 


Speaking as someone likely to be paying out of his income-taxed @zz for the next 25 years for the 2010 circle-jerk in Vancouver/Whistler, I don't also want my Edmonton property taxes used to build an entirely unnecessary facility.

Paying out of your ass eh? The 2010Olympics are estimated to cost $1.3 billion. Now let's assume that none of those costs will be recovered and that each Canadian tax payer will contribute to these costs equally. $1.3 billion divided by 33 million people is $39.39. 40 bucks. Also known as a night as the bar.

Of course, a lot of those costs will be recovered, and less than half of government revenue comes from taxing personal income (which is mostly paid by rich people), so Art's contribution to the two week party in Vancouver is far more likely to be in the $5 range.

That's a huge chunk of change there Art. I don't know how you'll cope.
 


I initially thought this was a joke....

I can't remember who posted it, but there was a cartoon on the 'sphere maybe a year back regarding new publicly funded arenas - does anyone have a link to it? I think it made a really good point in a way that was simple for most to understand - I want to show it to all my "pro-downtown-arena-with-taxpayer-funding" friends.
 


Sean, I'm not positive, but I suspect you're referring to Peter Bagge's Let's All Give Money To The Rich Man.
 


Wow. Matt, you need to stop letting Andy sign in under your account- it makes us confused and inclined to feel overly charitable to a guy who's supposed to be a Flames fan.

As an aside, I don't have a ton of use for the CTF, but that's just great stuff. It's always interesting to see how propaganda is created.
 


That's a huge chunk of change there Art. I don't know how you'll cope.

Wow, Mclea, that's fantastic. You managed to completely ignore not only the fact that, regardless of per-person costs, it's still a huge amount of money that's not going anywhere near, say, doing something about Vancouver's rampant homeless/drug problem, but also that this post was all about how the supposedly independent commission that was set up to examine the new arena is willfully obfuscating any facts that might dampen people's enthusiasm for using tax dollars for a new arena.

Anyway, I'm not sure what's ultimately more disappointing: that the commission did that, or that it probably won't matter a lick.

Thanks for linking to this, though, Matt. And kudos to the CTF; I'm not generally in favour of an organization whose answer to everything is to lower taxes, but they're doing some fine work here.
 


That's the one! Thanks so much, Matt! If I convert just one person, it will be worth it.
 


I echo Jonathan and DMFB's comments; I'm opposed to the general thrust of what the CTF does, but they're a useful presence in the Canadian discourse, with this being just one example. Now they should just shut up about "tax freedom day".
 


I'm opposed to the general thrust of what the CTF does

Get a lot of socialists here Matt?

Geez....what a pansy!
 


I guess any blog which draws a lot of Flames fans is going to be pretty red (hey-ho!).
 


What a travesty.

And when did we predict this -- two months after the lockout?
 


Also, Lord Bob: Zinnng!
 


The 2010 Olympics are estimated to cost $1.3 billion.

1. That's not a credible number from any perspective other than politicians trying to soft-peddle costs in order to bag a Games bid without getting strung up in the city square.

2. There aren't 33 million taxpayers. Maybe 12 million, with the burden spread very unevenly, depending on city of residence, province of residence, and income tax bracket.

3. Whether it's $5, $50, or something greater, if the fiscal burden is inconsequential to supporters of a project, I respectfully ask that they pay my share. I will, in turn, not ask them to pay for my shelter, food, recreational activities, car insurance, etc.
 


This might shed some light:

http://2010watch.com/articles/fantasy.html
 


2010watch.com, Art? Really? You can't come up with somebody a bit more reliable than that? Grab a meth-addicted bum from downtown in exchange for some "bus fare"; I'd take his word ahead of that site's.
 


tuco Where is the disservice? Do you actually think the ctf did anything here?They asked for and got garbage rejected by this group. The group did not use the garbage. The ctf says Oh my ! Why did they reject the garbage? There must be something sinister here.The disservice here is giving credibility to the ctf. This was and is a total waste of time designed to get more donations to the ctf. They are fabricating a conspiracy when if you actually take two seconds to think about it does not pass any sniff test. Your post must be motivated by some Draconian plot that you and your minions are launching against the unsuspecting masses. Hmmm see how easy it is to twist and manipulate. Take a little more time to research before you give such laudable praise to a bunch of self serving parasites.
 


This comment has been removed by the author.
 


Now they should just shut up about "tax freedom day".

Totally, d00d. Except it's the Fraser Institute that calculates and publishes Tax Freedom Day.
 


Totally, d00d. Except it's the Fraser Institute that calculates and publishes Tax Freedom Day.

My own period of shutting up about Tax Freedom Day will now begin.
 


They are fabricating a conspiracy when if you actually take two seconds to think about it does not pass any sniff test.

Lyle Best, everyone?
 


The CS&L report seems to make two rather obvious errors which would change some of the numbers - though not dramatically. It lists Rexall place as have a seating capacity of 18,000 (I'm pretty sure it's more like 16,800), and it values the Oilers at $157mil - before the sale of the team I know - but they sold for north of $200mil. Interesting stuff all the same.
 


Fabricating a conspiracy? Boy, that's stretching it. The draft mentions a couple of flavours of tax that aren't mentioned in the final report; the CTF is asking if those were actually ruled out, or if the committee decided it was better just not to mention them. That's hardly an accusation of anything highly sinister.

My interest in the thing, as I hope I made clear in the original post, is as an illustration of how the folks who are intent on getting this thing built are marketing it to the public who will eventually be paying (most of) the freight. To wit: part of the "garbage rejected by this group" was any attempt to address the objections of people who say, "If Toronto, Montreal, Ottawa, and Vancouver can build arenas without taxpayer 'investment', why can't Edmonton?"

The pushers of the downtown arena would obviously prefer not to inform anyone who doesn't already know that those cities' arenas were built privately. I think that's dishonest. Isn't it?
 


Go to hockey.ballparks.com and do your own research. there you will find that Ottawa had government grants and loans. Go to arena digest and learn that on one corner alone Toronto had 13m of infrastructure tax payer money contributed. Try to find out how much tax these four arenas pay and try to determine if they pay the same rates as other commercial entities in the same city and postal code. When you are done do please come back and retract your dishonesty comment.
 


I can't believe Lyle Best reads BoA.
 


To anonymouse two posts above,

Not that I'm particularly impressed by that site's credibility chops, but is this the quote you plucked that $13-million figure for the ACC from? Bolding added:

"Approximately $13 million in public infrastructure elements will be advanced by at least five and up to as many as 15 years ahead of schedule through private financing in conjunction with the project. Projects include: the Bay West Teamway, Union Plaza, the Galleria, Bremner Blvd. And related infrastructure. No public funding will be used. "

Unless I'm reading it wrong (entirely possible, i grant) that, to me, reads like the exact opposite of your original point -- just by its presence, the wholly private ACC will kick in $13-million worth of improvements to the infrastructure around it (new sidewalks, crosswalks, streetlights and the like) that can be enjoyed by John Q. Taxpayer without John Q. taxpayer having to pay for it.
 


Go to hockey.ballparks.com and do your own research.

Just for fun, I did.

For the ACC, under the "Economic Stimulus" section, it says:

"The construction will be the impetus for other downtown development ... Approximately $13 million in public infrastructure elements will be advanced ... in conjunction with the project. Projects include: the Bay West Teamway, Union Plaza, the Galleria, Bremner Blvd. and related infrastructure."

Right before it says:

"No public funding will be used."

So, basically, because the ACC got built, the city is going to spend $13 million earlier than it otherwise would have to revitalized the area AROUND the arena. No public money went to the arena; unless, of course, it was Stephen Mandel who wrote that "no public funding will be used" bit.

As for Ottawa, it's more nebulous: under "financing" it includes "Government loan," which doesn't technically qualify, presuming they're going to pay it back, and "federal grant," which I guess would, though without more info, that's kind of meaningless. There are also a bunch of stories about the Ontario government possibly giving arena tax breaks, though I couldn't find anything that confirms they did (and one of the stories has then-Mayor Lastman denying he'd ever give an arena a tax break).

So, uh, maybe Ottawa's was using public money. But by your own sources, Toronto didn't.

Oh, and that also ignores the fact that it's not like they corrected these passages, they just removed them completely. Oh, and both Vancouver's and Montreal's were entirely privately funded. WEEEEEEE!!!!!!!!
 


I see I wasn't the only one who was incredibly annoyed by that.
 


Try to find out how much tax these four arenas pay and try to determine if they pay the same rates as other commercial entities in the same city and postal code.

That is, of course, not the issue. Right now, we're discussing the cost of constructing the arena. If you want to say that the Oilers should enjoy tax breaks similar to those enjoyed by the other four Canadian teams and make the argument that it doesn't really matter when the tax break occurs, that's fine and well but that's not the issue here.

Matt - you should update this to include Best's explanation for why he removed the stuff about Canadian arenas from the draft. Solid stuff.
 


Just had a read of the Convention, Sports and Leisure Report which can be found here: http://www.taxpayer.com/pdf/CSL-022207.pdf

Page 29 states that Scotiabank Place, ACC, Bell Centre, and GM Place were 100% privately financed. (As well as arenas in St. Louis, Anaheim and Boston).

hockey.ballparks.com doesn't have any specifics in regards to Ottawa, but Wikipedia says that they got a $6-million grant from the federal government, however, there is no active reference for this information.

Even if this unreferenced information is correct, it would have been an easy edit to note that Ottawa's arena was 97% privately financed, while the others were 100% privately financed.

Or, since the committee paid CS&L for the report, I'm thinking a quick phone call to their offices to get them to double check Ottawa's numbers may have cleared up any concerns.
 


I'm a bit surprised that you guys are...surprised by all of this. "Optics" is what politics is all about - this sort of stuff goes on regularly. I bet the biggest office expense at city hall is black and red sharpies.

While this is some pretty interesting stuff, I think it might be wise to contextualize the discussion. Those documents were prepared under the "guidance" of the Arena Feasibility Group, (read: EIG), who as we all know did not have the nuts to finance something of this magnitude. So naturally Mr Best was probably operating under those directives. As far as I am concerned, by not stating so in their "release", the CTF is as guilty as Best in using "errors of omission" to their advantage.

A businessman of Katz' magnitude would actually WANT to front the whole cost, but the city will probably want to participate in order to have some say over the development. And no, zone bylaws aren't sufficient enough in this case. So you can reasonably guess that some version of secondary funding will be recommended. Options are being floated in the media, although I suspect that the actual financing formula has already been decided on.
 


And another thing -- say what you will about MLSE, but even they didn't have the cojones to ask for public money when building the ACC.

The chicanery that surrounded them benevolently taking the Ricoh Centre and BMO Field out of the hands of the public purse AFTER they'd both been built is a much different story, though...

A cursory googling has plenty of info.
 


"I'm a bit surprised that you guys are... surprised by all of this." -- David S

"I don't think anything that the CTF found (release and wonderfully illustrative pdf links here) will come as a huge surprise to readers of this site." -- me, 2nd paragraph.

Anyway, two things from this CBC report on the matter:

1) As Tyler and Scott mention above, Lyle Best had an interesting response: "[Researchers] took that information from another report, but could not verify it to me so I took it out." Awesome. BTW, that'd be the very CS&L report that was appended to Best's own report.

2) Surely the actual financing formula has NOT been decided on, as "Mayor Stephen Mandel also brushed off questions about the changes, saying there has been no decision yet whether to go ahead with a new arena or how it will be financed."

As for politics and optics in general... I really don't care if Red and Blue lie their faces off about each other while they're competing for the levers of power. They all deserve each other, and whatever they get. But when the guys with their hands on the levers all scheme together against the peons, then every lie, half-truth, omission, inconsistency, etc. deserves to be exposed, preferably in a manner which maximizes the shame factor. They're the ones with the power, not the CTF nor Andy & me.
 


A businessman of Katz' magnitude would actually WANT to front the whole cost

No, a businessman of Katz' magnitude would want to front none of the cost and have ownership and absolute control. He'll compromise for something less.
 


First: Good job Andy.

Second: Brad Humphrey's nailed it

http://www.cbc.ca/sports/hockey/story/2008/08/07/edm-arena-accusations.html?ref=rss

"They're going to spin it in the best light possible," said University of Alberta sports economist Brad Humphreys.

"It's sort of as a piece of propaganda, I think. That's the way to think about it.

"It's not the whole truth. There is useful information in there, but there's also information that should be out there that's omitted — just like any other propaganda piece that you might expect out of people that are seeking taxpayer dollars that is primarily going to be used by private enterprise."

 


it values the Oilers at $157mil - before the sale of the team I know - but they sold for north of $200mil. Interesting stuff all the same.

I believe Katz paid around 150-160M for the purchase of the Oilers. The 200M would be the franchise value had he purchased the assets, not the shares of the EIG.
 


"No, a businessman of Katz' magnitude would want to front none of the cost and have ownership and absolute control."

I believe he "fronted" the cost of the Oilers purchase without using a cent of his own/ Rexall's money - the deal was privately placed (although I can't recall the firm he did the deal through). He'd do the same thing with the arena if he could get away with it.

Didn't Dan Mason or Brad Humphreys state as much in a link from one of Andy's earlier posts?

BTW - is this Andy posting with Matt's PW or is this new guy poster to be called "Maandy".

Either way, excellent post!
 


Punjabi: Thanks. My quotes look a bit fractured because it came from a live TV interview on CBC.

FYI here's my take from over on the Sports Economist yesterday

http://thesportseconomist.com/2008/08/fun-and-games-in-edmonton.htm

Brad Humphreys
 

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