Less than two weeks after the collapse of an agreement between the city of Calgary and the Flames estate to build a new event center, the city council is looking for a third party to help find a way forward.
On Wednesday night, after hours of closed-door debate, the council voted unanimously to engage with a third party to determine whether the Calgary Sports and Entertainment Corporation (CSEC) would be interested in re-engaging in discussions about the construction of an event center or if there are other parties interested in partnering with the City of Calgary to complete the project.
Construction on the $600 million-plus arena project was scheduled to begin this month, but the deal was formally terminated on Dec. 31, 2021 after CSEC notified the city that it was withdrawing from the deal due to rising costs. .
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Mayor Jyoti Gondek told reporters Thursday that a new deal to build an events center would be a new opportunity for all partners involved.
“What we have before us now is an opportunity to work in this environment with partners and come to an agreement that respects the fact that economic conditions are completely different globally, including in Calgary,” Gondek said. “It’s a new opportunity that frees us from the old arrangement.”
According to the council’s direction, the third-party intermediary is expected to report with more information on March 8.
district 1 county. Sonya Sharp led the charge to bring in a third party.
“A third party allows some distance for the city and is the best deal for everyone,” Sharp told reporters Thursday. “We can start fresh, without any… I hate to use the word baggage, but that’s really what we have to do here.”
CSEC did not respond to Global News’ request for comment.
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Ryan Gauthier, associate professor at TRU Law in Kamloops BC, said retaining a third party is not uncommon, but questioned what the city of Calgary had in mind for other partners to join the fray.
“Are we talking about the provincial government? Federal government? That could be one thing,” Gauthier said. “If we are talking about a private investor, my question is, what is the investor going to want? Because if I’m going to put $20, $30 or $40 million into a stadium, now I want naming rights, I want event rights, I want parking (revenue).”
According to Gondek, “anything is possible” when it comes to a private partner helping build and run a new event center, including a lease.
“Other cities have managed it differently. They also have partners who are responsible for entertainment outside of sports,” Gondek said. “In 2019 we had looked at all sorts of different models, and we’re going to go through some of them and find out which one works best for us.”
The entertainment district moves on
The Calgary Municipal Land Corporation (CMLC) was eliminated as event center development manager as part of a revised agreement in July 2021, but remains the leader in managing the development of Calgary’s cultural and entertainment district in the eastern edge of downtown.
But the organization was “disappointed” when it learned that the agreement between the city and the CSEC had not materialized.
CMLC President Kate Thompson said she was still optimistic about the area’s future after the lengthy discussion at city council on Wednesday night.
The events center, along with the BMO expansion, the Stampede Trail redevelopment, and the 17 Avenue S extension were seen as key pieces of the new entertainment and cultural district. Thompson said the work will continue with or without an event center.
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“Would we like to see the event center move forward? Absolutely,” Thompson told Global News. “If not, and we have to think of new things to do in the area, we will also do that for our council.”
According to Thompson, the $500 million expansion of the BMO Center remains on budget and on schedule.
The Calgary Stampede is also confident in the progress of the entertainment and cultural district, but hopes the city and CSEC can still come together to build the Saddledome replacement.
“We’re hopeful that (the city) can do something with the Flames because they and their fans certainly deserve a new place to play,” said Calgary Stampede CEO Joel Cowley. “There is no question that an event center would serve the community well.”
During a virtual news conference Thursday, Gondek was asked if she or Flames ownership terminated the deal in a Dec. 21 phone call with Flames majority shareholder Murray Edwards.
“No mayor, including myself, has the ability to negotiate on behalf of the council or the city of Calgary and no mayor has the ability to back out of a deal,” Gondek said. “The end of that conversation on December 21 resulted in both myself and Mr. Edwards agreeing that we would be very public about the situation he and his partners found themselves in.”
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With the city planning to move forward with the project, Gondek said it’s too early to determine whether a new deal would mean more or less of a financial commitment from the city of Calgary.
The recently terminated agreement saw a total contribution from the City of Calgary of $323 million, which did not include the value of the land.
“There is an opportunity for the public component to be the same, there is also an opportunity for it to be different. And let’s remember that there is also land involved that has a lot of value,” said Gondek. “It’s a new opportunity to do this right.”
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