News Article: Lebreton...Interesting...NCC - PART 2

[Micklebot]

We shouldn't ignore fans in any area, but they should be mindful of where the more sought after fans are. A wealthier area of Ottawa should be weighted more highly than a not so wealthy.

So focus on places like Edinburgh, Rockliff park, Tunney pasture, Westboro, and the Glebe?

 

[aragorn]

I think we should also weight in the Melnyk factor, he did piss off a whole lot of people all over Ottawa & now that he is gone more people including in the west end will likely return to watch the team especially since they seem to be a young team on the rise. I expect attendance to rise significantly this yr, even on here a lot of people are talking about going to games now that EM is gone & the team is improved.

 

[JD1]

A downtown rink will get built when there's enough public money in the mix, not before imo

 

[ColinM]

So focus on places like Edinburgh, Rockliff park, Tunney pasture, Westboro, and the Glebe?

Tunney's Pasture and Westboro aren't that far from Kanata. It might not be Lebreton close, but if fans want to go they can.

I suppose as others have mentioned public funding will drive the move if it happens. Outside of the usual talking points what does everyone think the political will is for that?

 

[Relapsing]

Tunney's Pasture and Westboro aren't that far from Kanata. It might not be Lebreton close, but if fans want to go they can.

I suppose as others have mentioned public funding will drive the move if it happens. Outside of the usual talking points what does everyone think the political will is for that?

Municipally, I think the desire is pretty strong. Sutcliffe has been pretty vocal about it to date, and has floated multiple locations as options.

The desire at the Federal level to leave some notable buildings downtown could work out in the Sens favour here, although not all sites posed are under their jurisdiction.

Unsure where the Province will land. I know that Capital Sports Development Group met a number of times with the Province to date, but who knows what Ford will end up doing - he doesn't seem to care much about helping Ottawa development, to be blunt.

I think most people tend to think about this from a direct monetary perspective, but there are other mechanisms to support the Senators move, including a reduced tax burden. I suspect that if any of the 3 levels of Government are involved, it will be a mix of direct funding, reduced sale/lease costs, and tax reductions.

With that in mind, Sutcliffe seems to be the strongest proponent to support the Sens move downtown.

 

[Micklebot]

Tunney's Pasture and Westboro aren't that far from Kanata. It might not be Lebreton close, but if fans want to go they can.

I suppose as others have mentioned public funding will drive the move if it happens. Outside of the usual talking points what does everyone think the political will is for that?

Come on now, it's 23k to the ctc from tunneys, and 19 from Westboro, if they can head to CTC then the folks in Kanata can trek the 22 km to Lebreton flats

Why are people so afraid that people in Kanata are snowflakes that melt if they need to travel more than 5 mins ...

 

[OUT HOUSE]

I went to 12 or 13 games last year, and I take the express bus from Tunneys. Getting there isn't too bad, can be as quick as 25 minutes. Getting back, especially in the winter, can take up to an hour. I'd typically leave my house at 5:25, and then get home after 10:30pm.

 

[slamigo]

Ticket prices are set by demand, if ticket prices rise it's likely an indication of increased demand, that's a good thing.


Is attendance in Kanata good? I'd say acceptable perhaps, but I certainly wouldn't say it's amazing. Amazing is being able to charge above league average prices and still sell out, we haven't done that in a long time, if ever.


The estimates to build seem to balloon up all the time, but I suspect at 1 bill, you're including aspects that are non-hockey related revenue drivers, like retail space or condos.

Any build is going to look long term, so take into account the increasing maintenance cost, expected remaining lifespan of the ctc, tax implications ect. It's also going to offset costs by getting a return on selling the current location.


A move to downtown doesn't mean fans in Kanata stop showing up though, it's not moving the area out of reach from those communities it just turns a 5 min drive into a 20 min drive. I'm not convinced the the high tech sector in Kanata will suddenly thumb their nose at the team form moving 20 mins down the road, really not seeing how they'll lose corporate support with a move.

Well clearly they see the potential for profit in doing so, we just saw a bunch of billionaires competing for the privilege of spending 1 bil for the right to spend more on that move.

I'm not against the downtown arena. I'm wondering what's the point from a hockey/business sense? What is the rationale for the downtown arena? I'm looking at the current arena location and the fact that it's fully paid for (assumption with new owner's deeper pockets). There is a large population, exploding tech scene and historically good attendance (when the team is performing well).
What issues do people see the downtown arena addressing? It would be neat and all, but I'm not convinced it's 100% necessary. People seem to have managed showing up at CTC in droves in the past. So, if attendance isn't the issue, is it just to build condos and develop downtown retail/restaurant space?
If I owned the team, I wouldn't be pouring money into a partnership with the NCC downtown with the hopes that attendance improves. Or just to make Ottawa a nice tourist attraction? There would have to be a major return on that investment to even consider it. If I was Andlauer, I'd be worried about over-extending and getting underwater in the downtown development plan.
I'm really hoping they hand him the keys soon and he can finally speak to the media about his vision for the team, the rink, etc.

 

[bert]

I'm not against the downtown arena. I'm wondering what's the point from a hockey/business sense? What is the rationale for the downtown arena? I'm looking at the current arena location and the fact that it's fully paid for (assumption with new owner's deeper pockets). There is a large population, exploding tech scene and historically good attendance (when the team is performing well).
What issues do people see the downtown arena addressing? It would be neat and all, but I'm not convinced it's 100% necessary. People seem to have managed showing up at CTC in droves in the past. So, if attendance isn't the issue, is it just to build condos and develop downtown retail/restaurant space?
If I owned the team, I wouldn't be pouring money into a partnership with the NCC downtown with the hopes that attendance improves. Or just to make Ottawa a nice tourist attraction? There would have to be a major return on that investment to even consider it. If I was Andlauer, I'd be worried about over-extending and getting underwater in the downtown development plan.
I'm really hoping they hand him the keys soon and he can finally speak to the media about his vision for the team, the rink, etc.

I assume you havent been to many other games in other markets if you actually think the Kanata arena is a good idea.

There is no possible concept on any level it wont help the teams attendance by moving it out of the worst situation in the entire NHL. The parking lot is the worst design of all time. Its impossible to get out. There are literally no walking amenities its more than an hour away from 35% of the greater areas population.

Getting to the arena from Gatineau, Findlay Creek, and Orleans is a horrid drive that represents over 600,000 people. You are talking atleast 2 hours round trip of travel from those locations and thats on a good day. 45 of that could be in the parking lot .

Lebreton flats/Bayview is still only 23 KM from Kanata. We get it you like having the arena in your back yard but it makes no sense. No one likes it except the 150,000 people from Kanata and the Ottawa Valley. Ottawa/Gatineau market is 1.5 million. Thats literally only only 10% that is still the closest suburb to the proposed location.

 

[Relapsing]

Come on now, it's 23k to the ctc from tunneys, and 19 from Westboro, if they can head to CTC then the folks in Kanata can trek the 22 km to Lebreton flats

Why are people so afraid that people in Kanata are snowflakes that melt if they need to travel more than 5 mins ...

Because people don't understand the concept that facilitating transit in multiple directions makes it better for everyone.

That, or they live in Kanata already.

I'm not against the downtown arena. I'm wondering what's the point from a hockey/business sense? What is the rationale for the downtown arena? I'm looking at the current arena location and the fact that it's fully paid for (assumption with new owner's deeper pockets). There is a large population, exploding tech scene and historically good attendance (when the team is performing well).
What issues do people see the downtown arena addressing? It would be neat and all, but I'm not convinced it's 100% necessary. People seem to have managed showing up at CTC in droves in the past. So, if attendance isn't the issue, is it just to build condos and develop downtown retail/restaurant space?
If I owned the team, I wouldn't be pouring money into a partnership with the NCC downtown with the hopes that attendance improves. Or just to make Ottawa a nice tourist attraction? There would have to be a major return on that investment to even consider it. If I was Andlauer, I'd be worried about over-extending and getting underwater in the downtown development plan.
I'm really hoping they hand him the keys soon and he can finally speak to the media about his vision for the team, the rink, etc.

Attendance, which would be facilitated by more transit options.

 

[AchtzehnBaby]

if they get rid of 2 or 3 lanes on the the 417, and make them bike lanes, CTC would be sold out 24/7

 

[Masked]

But the bottom line is the company bottom line: why spend money to move if it isn't necessary?

One, a new arena will increase revenues just due to the novelty factor.

Two, a central location should increase revenues.

Three, the CTC has outlived its depreciation period. I'm not sure what sort of renovations are eligible for depreciation but a new arena would be. Not taking advantage of depreciation is leaving money on the table.

Assen na yo!

 

[Relapsing]

One, a new arena will increase revenues just due to the novelty factor.

Two, a central location should increase revenues.

Three, the CTC has outlived its depreciation period. I'm not sure what sort of renovations are eligible for depreciation but a new arena would be. Not taking advantage of depreciation is leaving money on the table.

Assen na yo!

Don't sleep on growing the fanbase locally either.

If I was Andlauer, one of my first priorities would be finding new fans, wherever I can find them. And they ain't gonna be found in Kanata at this point. They'll be found in Gatineau, the east end and the region beyond it.

 

[Beech]

if they get rid of 2 or 3 lanes on the the 417, and make them bike lanes, CTC would be sold out 24/7

gets my vote

 

[Beech]

I'm not against the downtown arena. I'm wondering what's the point from a hockey/business sense? What is the rationale for the downtown arena? I'm looking at the current arena location and the fact that it's fully paid for (assumption with new owner's deeper pockets). There is a large population, exploding tech scene and historically good attendance (when the team is performing well).
What issues do people see the downtown arena addressing? It would be neat and all, but I'm not convinced it's 100% necessary. People seem to have managed showing up at CTC in droves in the past. So, if attendance isn't the issue, is it just to build condos and develop downtown retail/restaurant space?
If I owned the team, I wouldn't be pouring money into a partnership with the NCC downtown with the hopes that attendance improves. Or just to make Ottawa a nice tourist attraction? There would have to be a major return on that investment to even consider it. If I was Andlauer, I'd be worried about over-extending and getting underwater in the downtown development plan.
I'm really hoping they hand him the keys soon and he can finally speak to the media about his vision for the team, the rink, etc.

Ottawa is diamond shaped.

The north tip is parliament and close to Lebreton. The North tip is where many of the Ontario/Quebec bridges are. The Franco population is at the heart of hockey and has been for 150 years. Howie Morenz, Auriel Joilette, Newsie Lalond and a few hundred early stars are all Francos, many of whom are from Western Quebec.. the great Guy Lafleur is from Turso.. Denis Potvin is from here and so on.

So 300,000-500,000 Quebec Francos are a precious commodity and a reliable fan base to lure.

Now go east and you enter a large population sector. Again, heavily Franco. So, it makes sense to chase it.

South is where I live and has a heavy ethnic population and a booming Asian/South Asian population. It is unclear on whether they will adopt hockey as they integrate. As I see it, and being one of them. They love the sport, watch it on TV, but generally do not attend games in large numbers. The combination of financial wherewithal and lack of familiarity (many 3rd world nations, do not have Western like sports structures) does hurt.

West is heavily Anglo and is reliable and can carry a small burden of minor travel to a central locale.

Downtown makes the most sense and did so 30 years ago.

 

[slamigo]

Again, I'm not against a downtown arena. It's just that I can see the validity in some of the points of the article. I am also really looking forward to hearing from Andlauer about his future plans and vision for the team.
I even bought a half season ticket package. Arena downtown or in Kanata isn't a huge issue for me.

 

[Sun God Nika]

Again, I'm not against a downtown arena. It's just that I can see the validity in some of the points of the article. I am also really looking forward to hearing from Andlauer about his future plans and vision for the team.
I even bought a half season ticket package. Arena downtown or in Kanata isn't a huge issue for me.

Honestly a Downtown/Hurdman/Central arena falling through again would be gut wrenching. Like I am ready to buy my next condo/home at the flats/where ever they go.

I love the vibe of a downtown arena watching a game in New York/MTL/Toronto are way different experiences than watching a game in Ottawa. I leave my BNB walk 10-15 mins at the game and then I get drinks after and not end my night. Vs Driving 30-40 mins from south keys in traffic or taking a bus and then getting stuck in traffic on the way out for another 30 mins or taking a 40? bus to downtown and then having to switch again since there isnt a bus from South Keys to the game anymore.

 

[Tnuoc Alucard]

A downtown arena is not some sort of panacea. If anything, it will drive up the price of tickets.

Attendance in Kanata is good. And it's actually amazing when the team is playing well.
So if attendance isn't the rationale to build downtown, what is the purpose of the move?

A new downtown arena is estimated at $800-1B. As owner of the Sens, why add that overhead if the team is competitive and selling out in Kanata?

And the article is correct in pointing out that Kanata, Stittsville, Barrhaven, etc all have had massive growth in population AND it's a population with high family incomes. Kanata has also seen a resurgence of the 'Silicon Valley North' placement of tech companies. It's a good spot for an arena for many reasons.

But the bottom line is the company bottom line: why spend money to move if it isn't necessary?

Arenas have a “life span” before they need massive a retrofit or upgrades, or replacements… and the CTC probably, at the most has about 10 years left before a decision on it’s future is needed.

Moving to the centre of your market will increase demand for tickets, and as you point our , raise the price…. Supply and Demand… and that is in the best interests for the franchise.

take a look around the NHL, are there any other NHL teams playing on the periphery of their market? And if there is ( Arizona ) are they doing well?

A move to a central location is in everyone’s best interests …. The City, the businesses in and around the new location, the Senators ( more wake ups and higher revenues) the fans now in areas far from the CTC that don’t attend games, or games on a regular basis.

the bottom line is, when it comes time to retrofit or relocate… which has the greater ROI in the long term?

 

[JD1]

I assume you havent been to many other games in other markets if you actually think the Kanata arena is a good idea.

There is no possible concept on any level it wont help the teams attendance by moving it out of the worst situation in the entire NHL. The parking lot is the worst design of all time. Its impossible to get out. There are literally no walking amenities its more than an hour away from 35% of the greater areas population.

Getting to the arena from Gatineau, Findlay Creek, and Orleans is a horrid drive that represents over 600,000 people. You are talking atleast 2 hours round trip of travel from those locations and thats on a good day. 45 of that could be in the parking lot .

Lebreton flats/Bayview is still only 23 KM from Kanata. We get it you like having the arena in your back yard but it makes no sense. No one likes it except the 150,000 people from Kanata and the Ottawa Valley. Ottawa/Gatineau market is 1.5 million. Thats literally only only 10% that is still the closest suburb to the proposed location.

Everything you've written here is 100% true. But on the flip side, so what?

Suppose we average 16,000 fans at CTC. That's pretty easy to imagine. Ok. Suppose downtown averages 17,000 and each ticket is 10 bucks more.

So, you have
16,000 * 10 * 41 = 6.5M
1,000 * 75 * 41 = 3.0 M

So maybe we have an additional 10 M in revenue from moving downtown? And maybe you can make an argument that the facility could book more shows...but to me that argument is pretty thin.

Now, throw out a number to build a new facility. Let's say 1 billion. And let's say that half that money comes from the various levels of government. So Andlauer is on the hook for 500M.

Now you need to write a business case that Andlauer can generate enough additional revenue that making the 500M investment makes sense versus staying put. And that's not all from Andlauer's perspective because there's the opportunity cost on the 500M. What else could Andlauer invest 500M in that results in better returns. Presumably an arena would need to compete for capital within Andlauer's business portfolio.

I'd love to have a downtown rink. Once the train setup works, I'm a 7 minute walk to a train stop. Downtown we go right to a facility. That'd be awesome. But there's some hard math to be done on a facility that's not in danger of needing to be shut down.

if they get rid of 2 or 3 lanes on the the 417, and make them bike lanes, CTC would be sold out 24/7

Sadly, the morons that run this city might do something that stupid.

 

[JD1]

One, a new arena will increase revenues just due to the novelty factor.

Two, a central location should increase revenues.

Three, the CTC has outlived its depreciation period. I'm not sure what sort of renovations are eligible for depreciation but a new arena would be. Not taking advantage of depreciation is leaving money on the table.

Assen na yo!

Idk about that.

One of the most cited reasons for a lack of business investment in Canada is the shitty capital cost allowance treatment

Study after study points to lower productivity of labour in this country. Why? Because businesses invest their capital elsewhere because they get better CCA treatment

 

[Micklebot]

Everything you've written here is 100% true. But on the flip side, so what?

Suppose we average 16,000 fans at CTC. That's pretty easy to imagine. Ok. Suppose downtown averages 17,000 and each ticket is 10 bucks more.

So, you have
16,000 * 10 * 41 = 6.5M
1,000 * 75 * 41 = 3.0 M

So maybe we have an additional 10 M in revenue from moving downtown? And maybe you can make an argument that the facility could book more shows...but to me that argument is pretty thin.

Now, throw out a number to build a new facility. Let's say 1 billion. And let's say that half that money comes from the various levels of government. So Andlauer is on the hook for 500M.

Now you need to write a business case that Andlauer can generate enough additional revenue that making the 500M investment makes sense versus staying put. And that's not all from Andlauer's perspective because there's the opportunity cost on the 500M. What else could Andlauer invest 500M in that results in better returns. Presumably an arena would need to compete for capital within Andlauer's business portfolio.

I'd love to have a downtown rink. Once the train setup works, I'm a 7 minute walk to a train stop. Downtown we go right to a facility. That'd be awesome. But there's some hard math to be done on a facility that's not in danger of needing to be shut down.


Sadly, the morons that run this city might do something that stupid.

I think you're omitting a lot of factors,

1. If the facility is going to cost 1 billion, it's probably not just an arena, so you're likely mitigating some costs with other revenue generators like retail space, offices, hotels, condos or whatever.

2. How much can you sell the current property for? Past estimates were around 100 mil, could be more now, idk, but that's an opportunity that only opens up with the building of a new venue.

3. Depreciation period was mentioned by others, the current building has likely fully realized that tax benefit, a new one would restart that clock. That helps offset the cost of a new build.

4. Maintenance cost of the current building; The CTC is going to need upkeep in excess of what a newer building does, and eventually, it will need extensive upkeep or to be replaced.

5. Long term value; Sports teams are less about the operational profits, and more about the appreciation on the asset, I suspect a downtown arena will have a substantial impact on the later.

You're right that it's not as easy as just saying a downtown arena will make more profit, there's a balancing act to play out to see if it makes financial sense. my biggest concern relates to point 5 above, I feel like the down town arena factor may have been baked into the purchase price, so the Melnyk's already realized at least part of that gain.

 

[bert]

Everything you've written here is 100% true. But on the flip side, so what?

Suppose we average 16,000 fans at CTC. That's pretty easy to imagine. Ok. Suppose downtown averages 17,000 and each ticket is 10 bucks more.

So, you have
16,000 * 10 * 41 = 6.5M
1,000 * 75 * 41 = 3.0 M

So maybe we have an additional 10 M in revenue from moving downtown? And maybe you can make an argument that the facility could book more shows...but to me that argument is pretty thin.

Now, throw out a number to build a new facility. Let's say 1 billion. And let's say that half that money comes from the various levels of government. So Andlauer is on the hook for 500M.

Now you need to write a business case that Andlauer can generate enough additional revenue that making the 500M investment makes sense versus staying put. And that's not all from Andlauer's perspective because there's the opportunity cost on the 500M. What else could Andlauer invest 500M in that results in better returns. Presumably an arena would need to compete for capital within Andlauer's business portfolio.

I'd love to have a downtown rink. Once the train setup works, I'm a 7 minute walk to a train stop. Downtown we go right to a facility. That'd be awesome. But there's some hard math to be done on a facility that's not in danger of needing to be shut down.


Sadly, the morons that run this city might do something that stupid.

Your projections are as low as possible given the potential upside. You are assuming they are fact in this scenario which I am very confident it is not.

A more accessible arena gives the team a much larger opportunity at grabbing market share first and foremost. An arena right across the bridge gives access to all of Gatineau. Orleans which is very much split between Montreal and Ottawa due to arena location its not that much further to go to Montreal which is the best in game experience in the league. Polar opposite of the CTC.

When 90% of the population is driving to the games in Kanata then the alcohol consumption will be way less than if people are using public transit or can justify uber/or taking a taxi because its not very far.

Corporate events become way more attractive which increases consumption. A total actual game day experience will push more money into the economy which is also great for the city.

The amount of extra revenue this team misses out on is astronomic due to the entire experience in Kanata.

Its also something that will attract players to this team. They dont want to play in the middle of no where they dont want the arena to be empty on Mondays and Tuesdays. Guys want to play in front of a packed house.

Lastly the CTC needs massive renovations putting more money into it doesnt make sense if there is an option for a central arena.

Its an absolute no brainer to move the arena downtown its not a matter of if..... Its when.

 

[slamigo]

To keep playing both sides of the fence, lol, I remember one of the talking heads on TSN1200 saying that the CTC may not be able to be physically upgraded to new standards for multipurpose arenas like most major cities now have. Hockey is only 41 home games plus some exhibition etc. The facility needs to be in use for all sorts of major events and the CTC may not be able to support them.
Someone else can chime in on the specifics if they know more. But it had something to do with the structural demands on the facility by traveling shows, concerts, etc.

 

[JD1]

Your projections are as low as possible given the potential upside. You are assuming they are fact in this scenario which I am very confident it is not.

A more accessible arena gives the team a much larger opportunity at grabbing market share first and foremost. An arena right across the bridge gives access to all of Gatineau. Orleans which is very much split between Montreal and Ottawa due to arena location its not that much further to go to Montreal which is the best in game experience in the league. Polar opposite of the CTC.

When 90% of the population is driving to the games in Kanata then the alcohol consumption will be way less than if people are using public transit or can justify uber/or taking a taxi because its not very far.

Corporate events become way more attractive which increases consumption. A total actual game day experience will push more money into the economy which is also great for the city.

The amount of extra revenue this team misses out on is astronomic due to the entire experience in Kanata.

Its also something that will attract players to this team. They dont want to play in the middle of no where they dont want the arena to be empty on Mondays and Tuesdays. Guys want to play in front of a packed house.

Lastly the CTC needs massive renovations putting more money into it doesnt make sense if there is an option for a central arena.

Its an absolute no brainer to move the arena downtown its not a matter of if..... Its when.

@Micklebot to include you

I've worked on business cases that involve >500M in investment. There's lots of variables. Sure, I didn't include various revenue types in a 300 word post, I also didn't include revenue losses by moving rinks. The parking loss is huge.

I live in Orleans. My friends are all Sens fans. Driving to Kanata is a pita. But it's not really a deterrent in anyway for anyone I know here that can afford to go to games. And it's not the same as going to Montreal. It's not close. Minus winter weather I can leave at 630 and be in my seat at 730 with a beer. Mind you I live in the west end of Orleans so time wise it'd be worse for those that live in the Cumberland side of Orleans

It's a hard business case to make and not one that is without risk. I recall Melnyk saying about the original LeBreton deal that there were various assumptions and "if we're wrong, we're really wrong" I've said for years that I couldn't make a business case on the original LeBreton deal. I clearly didn't have access to all of the data so admittedly there's things you cannot see, but I'm also one with a resume that could have seen me engaged on such a business case.

It's not a slam dunk. It's possible. It's also not possible.

As a fan, I get it and I'd like the downtown rink. I'd be ecstatic. But an awful lot has to go right for it to eventually happen and imo it won't until enough public sector money comes to the table.

 

[Micklebot]

To keep playing both sides of the fence, lol, I remember one of the talking heads on TSN1200 saying that the CTC may not be able to be physically upgraded to new standards for multipurpose arenas like most major cities now have. Hockey is only 41 home games plus some exhibition etc. The facility needs to be in use for all sorts of major events and the CTC may not be able to support them.
Someone else can chime in on the specifics if they know more. But it had something to do with the structural demands on the facility by traveling shows, concerts, etc.

Can't say I have any insight on the matter, at least not of the "informed opinion" variety, but these venues are typically booked for 2 main reasons, sports (hockey and basketball primarily) and concerts. I don't see why the CTC can't continue to be used for either of those, the only thing I can think of is that the building is not conducive to modern sound reinforcement techniques, but that seems like a stretch.