In all likelihood, this blog will be relevant only to people living in southern Alberta but, I suspect there are parallels which will apply to other Canadian cities where the local ”elites” rule the roost.
Recently, Calgary’s city councillors, behind an 11 to 4 vote, approved a new arena deal with the Calgary Flames organization. The Flames insisted on, and the city consented to, a one-week timeframe in which to either approve or reject a deal that was arrived at by the Flames and a committee. This committee, which allegedly represents the citizens of Calgary, was mediated by an accountant and former president of the Calgary Chamber of Commerce. I note with interest that the position of president was held previously by Ken King. King is presently the Vice-Chairman of the Calgary Flames organization, the Chairman being Murray Edwards, a billionaire ex-patriot who now lives in London, England but has major assets in the Canadian oil and gas and mining businesses. Was the so-called arbitrator at arm’s length? You be the judge.
This appears to be a complicated series of agreements between the Flames, the citizens of Calgary, the Saddledome Society and the Calgary Exhibition and Stampede. The word “appears” as used in the previous sentence is important because only a very select few have actually had an opportunity to see the governing documentation which, taken together, forms the ultimate agreement. Because of the secrecy surrounding this transaction, allegedly to protect “commercially sensitive information” (whatever relevance that has because there are no competitors who can benefit from shining a bright light on this deal), many questions come to mind which the parties to the agreement seem, probably for good reason, loath to answer. One thing is crystal clear: on paper, at least, the new facility will greatly enhance the value of the Flames’ franchise to the lasting benefit of Edwards and his wealthy co-owner pals. Another thing that seems certain is the citizens of Calgary will not benefit in any way from this franchise value bump-up caused almost exclusively by the construction of the new facility and its huge income generating possibilities.
One curious part of the agreement (and there are several others) requires the City of Calgary to give the Flames organization an option to purchase two parcels of land in the vicinity of the proposed site for the new facility. One parcel of land is smaller than the other but potentially very valuable inner city property. For this smaller parcel, it appears that the Flames were granted a one-year option to purchase the property from the date the new facility opens. The Flames effectively have a five- to six-year option to buy the land but at a price that is not at all clear and may be buried in the details of the Agreement that Calgary taxpayers are not allowed to see.
The second parcel contains 500,000 square feet on the banks of the Elbow River. The price option on this land is for a period of ten years commencing on the date the new facility opens, once again, practically speaking, turning a ten-year option into a fifteen- or sixteen-year option. Once again, we are denied specifics of the option deal. The local media has been cheerleaders for the Flames and generally support the deal, but at least one of their columnists is so dumb that they confuse an Option to Purchase with a Right of First Refusal, and there is a fundamental difference.
What the print and electronic media in Calgary do exceedingly well is puff up Calgary’s chosen ones and will support just about anything this favoured class desires. These “desires” were recently thwarted when the citizens of Calgary were allowed to vote in a plebiscite to gauge the public support for bidding on a future Winter Olympic Games. Calgary’s elites badly wanted the games for reasons that are hard to justify, but the idea was put to rest when the plebiscite clearly showed that the majority of those who voted opposed the idea. Virtually the very same supporters of the Olympic bid then pivoted and became enthusiastic supporters of the arena deal. I can’t help but wonder why.
I leave it to the reader to determine if this is a fair deal or not. Did the aforementioned mediator opine that the option provision, presumably requested by the Flames, was fair and reasonable for the citizens of Calgary who are, purportedly, to be in a partnership with the Calgary Flames? This aspect of the transaction begs the question: why were these options such an integral part of what the Flames insisted on being part of the agreement, an over half-billion dollar transaction that the Flames also insisted be approved or rejected by the “ Captains of Industry” who comprise the bulk of City Council, within a one-week period. Did the aforementioned mediator think that was fair? He must have, and that alone seems very odd (and totally suspect) to me.
The representation has been that the Flames organization and the City of Calgary are each contributing $275,000,000 to the construction of the new arena, giving the impression that this is a joint venture. However, the details the public is allowed to see seem to clearly dispute that idea. The City will own the building and the Flames will pay rent. How much rent? Well, we do not know. There is to be a 2% ticket tax to go to the City for a fixed period of time, but the agreement seems to be silent, or at least we are not told, what happens once the 2% tax period expires.
The Flames, it appears, get to charge what the market will bear for arena seats for all events, for food and beverage concessions, and for private boxes. Other revenue, like parking, will probably go to the friends of the Flames in the form of the Calgary Exhibition and Stampede, an organization that presently owns the land where the new facility will be located and which has, for the life of the Saddledome, had a very friendly, yet secret, relationship with the Flames organization, the owners of the Flames and their front man.
Of course, there are many other elements to this agreement, but most of what the agreement contains boils down to rank speculation. As previously noted the local media is gung-ho in favour of the deal, and that could be because of the aforesaid Vice-Chairman’s role as the former publisher of both newspapers. If that is true, and it may not be true at all, it surprises me because the Vice-Chairman, generally speaking, held many of the employees of these news outlets in low regard.
The real problem here is that Calgary is a city controlled by a group of elites who, while feathering their own nests as in the likes of Alberta Tourism, Canada Tourism and Calgary Tourism, and are the very ones who, if truth be known, can demand an audience with City Council and have their opinions heard and given credence in the press, even when those opinions vary from decisions made by properly elected civic officials. Local elites are appointed to bodies seized with the responsibility of attracting businesses to Calgary that will, hopefully, solve the downtown office vacancy problem, whether they are qualified to do what is required to be successful in this venture or not. The rest of us are relegated to look on with the appropriate amount of adulation.
These chosen few transcend local politics and are, too many times, the recipients of provincial and federal government largess as well.
My fear is that this arena deal will result in a favoured few enriching themselves on the backs of the average Calgary taxpayer. By the time this realization sinks in, the present council and mayor will be long gone, leaving a form of economic chaos in their wake. It seems pretty clear to me that the city representatives were out-negotiated and out-lawyered by the Flames organization, all with the support and blessing of the aforementioned local elites and a guy who billed himself as a neutral arbitrator. I can’t help but wonder if these folks will be required to pay the same admission price to the new arena’s events as the rest of us (and which most of us can ill afford). Something tells me that will not be the case.
I am not sure, but I think I could hear the cheering emanating from the Flames’ boardroom when this deal was approved by Calgary’s City Council. The invitees of the Flames to this victory celebration were many of the very same Calgary elites who made all of this possible and who sat in the City Council gallery when the vote was taken. It will behove them to maintain their anonymity because when the terms of this deal are, someday, finally revealed, these supporters will not be well-remembered by the citizens they have bamboozled.
Who among us is naive enough to think, even for a moment, that life is fair? It clearly is not. The rich get richer on the backs of pugs like you and me. The architects of this boondoggle, those who lent their names to the initiative, and those councillors who voted for the deal should all be ashamed of themselves.
I am hopeful, but not confident, that in due course the “wheel” will turn in favour of those who have been taken advantage of by others in our midst who have supported this venture with what many think were less than honourable, self-serving motives.
The funny thing is that although $275,000,000 in tax payer dollars are being given to the Calgary Flames organization, the average guy cannot afford to take his child to see a Flames game. Notwithstanding, that same guy will be required to pay his share of the city’s contribution in the form of higher taxes and for what, to line the pockets of a favoured few and their politically connected buddies? Shame on those who bent over for this scam, this legalized form of thievery!
When the new rink is built and the Flames have constructed their opulent private box and are serving themselves and their guests the best booze and the finest food, I want you to pay attention to those sitting in the box, grinning and
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