I remember going to the Flames games growing up in Tucker, GA in the early 1970s (and playing street hockey!):
The Calgary Flames’ plan for a new $890 million arena/stadium complex would require the public to pay $690 million of it, and that doesn’t include the potential $300 million cleanup of a creosote contamination. Don’t do it, Calgary! What are they gonna do, move to Atlanta?
via deadspin.com
I wonder where the team name came from, Sherman's March? After a bit of research, the answer is yes! Odd (Remember that time we tried to secede from the union because of slavery/"state's rights", so the yankees came to town, beat us to a messy pulp and and then torched the place? That was so great we should name a sports team after it.).
Anyway, here is what we found in Whitehead et al. (2013) about the benefits (use value) of a new downtown hockey arena in Calgary:
There are a number of alternative benefit-cost analysis scenarios and we consider only one. We estimate the benefits of a new arena by the sum of consumer surplus of additional seats and the additional consumer surplus of improved seating of the existing number of seats. We assume the new arena reaches the maximum NHL capacity of 21,273 seats and the additional seats are filled with (revealed preference) nonattendees. The per game consumer surplus for additional seats in a new arena is $45 and $16 for those metropolitan residents in the Calgary and Edmonton markets who do not currently attend games. Forty-one home sellout games would generate annual consumer surplus of $3.6 million and $2.8 million in Calgary and Edmonton for the additional seating capacity. The Calgary Flames would generate additional consumption benefits with a new arena. Current metropolitan attendees in the Calgary Flames market would enjoy an additional $12 in consumer surplus per game in a new arena. At current arena capacity over 41 home games, the annual benefit of additional quality for the existing number of seats is $9.5 million. The total annual benefit of a new arena in Calgary is $13 million. ...
We consider two alternative discount rates: 2% and 7%. With a 2% discount rate and consumption benefits accruing for 30 years, the present value of consumer surplus is $292 million in Calgary .... With a 7% discount rate, the present value of consumer surplus is $162 million in Calgary .... A new NHL arena costs between $275 million and $450 million. ... Considering the Calgary Flames, the consumption benefits only justify a new arena in a best case scenario: at the lower end of the range of arena costs and when future consumption benefits are discounted at 2%.
The addition of the civic pride benefits (nonuse value) don't push it over (Johnson et al. (2012)):
After discounting and aggregating, the estimated benefits of a downtown location for a new arena complex are about $33.2 million, unadjusted for hypothetical bias, in both cities. Adjusted for hypothetical bias, it is about $24.1 million in Calgary and about $24.6 million in Edmonton.
Good luck Calgarians!
