Calgary City Council tries to revive failed arena deal

The chairwoman of a new Calgary city council committee aiming to revive a deal to build a new arena says she and her colleagues hope a previously approved plan can be resurrected.

The city and the owners of the Calgary Flames hockey team reached an agreement in 2019 to build a new arena, but Calgary Sports and Entertainment Corp., or CSEC, pulled out late last year, citing rising costs. Since then, the city has been looking for ways to save the project, which is also the centerpiece of a large redevelopment plan for an area southeast of downtown where the existing arena, the Scotiabank Saddledome, is located.

Councilwoman Sonya Sharp, chair of the council’s new committee, which met for the first time on Monday, described the arena project as a “catalyst” that will be needed as part of the city’s economic recovery. She said that using existing permits and approvals would make it easier to reactivate.

“It’s an investment in downtown Calgary and it’s part of the success of the arts and cultural district,” Ms. Sharp said in an interview. “It adds vibrancy and high-density mixed use to the community.”

The original agreement between the city and CSEC pegged the cost of the arena and event center at about $550 million, but the effect of the COVID-19 pandemic on supply chains and the construction industry has pushed costs down. projected to skyrocket to $634 million.

Construction was scheduled to begin in January this year, but CSEC pulled out weeks earlier, citing concerns about rising budget overruns related to road and sidewalk infrastructure, as well as weather-related costs. Mayor Jyoti Gondek and other council members maintained that the CSEC already knew about those additional costs.

Why can’t the Calgary Flames and the city seal an arena deal?

Ms. Sharp said bringing CSEC back, with the same proposed project, would allow the city to begin construction more quickly since the design and permits had already been approved by the city planning commission and city council. . She noted that the proposed arena has already cost the city and CSEC a combined total of close to $25 million.

“No one benefits from delays,” he said. “The faster we move and get this work started, the better this project is going to be in the sense that it’s being built and taking into account inflation and other circumstances that are going on in the world right now.”

CSEC and the City of Calgary agreed to split the $550 million asking price, with the City also providing the land, covering flood mitigation expenses and paying 90 percent of the cost of demolishing the Saddledome. For July 2021, the revised budget reached $608.5 million, and CSEC has agreed to bear a larger share of the costs and cover future price escalations. The amended agreement also allowed CSEC to bring in its own developer to replace the city-owned Calgary Municipal Land Corp.

The arena plan has been controversial since it was proposed and Ms. Gondek, who was a city councilor when the original agreement was signed, did not support the amended agreement last year.

After the immediate shock of the deal falling apart, the council moved quickly in early January to put a new plan in place to restart the project.

The council directed the city administration to hire a third party who would be responsible for contacting CSEC to gauge the company’s interest in resuming negotiations. The third party, which has not been named, is also expected to explore other potential funding partners.

CSEC did not respond to a request for comment Monday.

The arena is also the centerpiece of the city’s planned culture and entertainment district, which is part of a larger vision for an area called the Rivers District.