Good morning, Mark Iype in Edmonton today.
It was a big week in Calgary after the city, province and ownership group of the Flames announced that plans to build a new arena complex have been resurrected.
While the $1.2-billion price tag may have caused some sticker shock, most notable was the amount of public money now being poured into the deal. In Calgary, there has never been broad support for municipal taxpayers to kick in significant funds to make the price more palatable to a privately-held corporation. The new proposal has taxpayers across the province chipping in.
The City of Calgary and Calgary Sports and Entertainment Corp. have been haggling for years over a new events centre, although the province has never been part of any deal to share the cost of replacing the famed Scotiabank Saddledome. The new price tag is roughly double the most recent estimate, which was $634-million when CSEC walked away from the project in late 2021.
Under the proposed terms, Calgary will pay $537.3-million, or 44 per cent of the total cost. CSEC, which is led by billionaire Murray Edwards, will pay $40-million upfront, then $17-million per year (plus an increase of 1 per cent per year) over 35 years, for a present value of $356-million. Alberta will cover $330-million.
Calgary Mayor Jyoti Gondek said the price tag escalated because the newest iteration includes elements such as transportation improvements needed for a new building in Victoria Park.
“We’re not focused on a singular facility,” she said. “We’re focused on actually bringing an entire district to life and it also includes the type of improvements that people need when they’re experiencing an event.”
While the city and the Flames owners have spent years trying to get a deal over the finish line, the newest member to the deal is Alberta Premier Danielle Smith, who wore a Calgary Flames jersey to the announcement Tuesday. And she did not shy away from tying her government’s pledge to the outcome of the coming provincial election. Calgary is one of the main battlegrounds in the vote, tentatively scheduled for May 29 and officially kicking off on Monday.
Ms. Smith said Alberta’s contribution must be approved by cabinet and the treasury board before the end of summer.
“That’s why, on May 29, I’m hoping Calgarians give our UCP government a clear mandate to proceed with this arena deal,” she said.
While this deal is preliminary, one question that has been raised is: Who is responsible for cost overruns?
The city said it would cover unanticipated expenses with cash from future land sales and investment income, while CSEC will also shoulder some potential overruns. Alberta placed a ceiling on the majority of its financial participation in the deal.
“Cost overruns is something that will have to be worked out between the Flames and the city of Calgary,” Ms. Smith said Wednesday. “They know what our maximum investment is.”
So while this deal is preliminary, and Flames fans can only jealously watch the Edmonton Oilers playoff run right now, at least there was something to cheer for in Alberta’s biggest city.
This is the weekly Western Canada newsletter written by B.C. Editor Wendy Cox and Alberta Bureau Chief Mark Iype. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here.
Wendy Cox