Rendering of the Calgary Event Centre.HO/The Canadian Press
There are few things quite as tiresome as negotiations over a new professional sports stadium.
The idea of a sparkling fresh arena to boost civic pride always begins with the best of intentions. But getting from there to the end usually involves a long-running soap opera, with threats and counterthreats and promises by one side or the other to walk away from the whole thing.
And indeed, this is where we are with a proposed arena for the city of Calgary.
Calgary Sports and Entertainment Corp. (CSEC), the company that owns the city’s NHL team, the Calgary Flames, recently announced it was terminating a tentative agreement with the city because of last-minute changes and costs to the project that the company says it was expected to pick up.
Back when the original deal was agreed to, the $550-million cost of the undertaking was supposed to be split 50-50 between the company and the city. According to CSEC, recent cost estimates place that number closer to $634-million – an increase that the company had agreed to pick up a disproportionate share of because of contract provisions related to unanticipated increases in design and construction costs.
According to a statement by the company, this meant it would pay $346-million toward the new events centre, and the city would fork out $287.5-million.
Then, according to CSEC, last month the city tacked on an additional $19-million in costs related to infrastructure and climate mitigation measures and wanted the company to pick up $10-million of it. This appears to have been a final straw for the team’s owners.
And this is the juncture in the story where versions of events diverge.
Doing the talking for the owners is billionaire Murray Edwards, primary shareholder and legendary Calgary oilman. On the other side is Jyoti Gondek, the city’s new mayor and her chief political adviser, Stephen Carter, a long-time Alberta backroom operative.
Recently, Mr. Carter said in an interview with the Calgary Herald that Mr. Edwards’s version of events was a “lie.” He said CSEC knew about the extra costs long before last month, although he failed to provide any proof of this. Then Mr. Carter threw former mayor Naheed Nenshi under the bus, saying that the collapse of the deal was effectively his fault.
Mr. Carter, it should be noted, was the architect of Mr. Nenshi’s unlikely rise to mayor in the first place.
Meantime, city council is upset that so much of the final negotiating leading up to CSEC’s decision to walk away from the deal happened without their knowledge. Although it’s a new and very raw council in terms of experience, many of those on it have a different perspective than the Mayor about giving CSEC a take-it-or-leave ultimatum about the extra costs related to infrastructure and climate mitigation.
Is $10-million worth losing a brand new arena over?
The collapse of the deal did allow Premier Jason Kenney to put the blame firmly at the feet of Ms. Gondek. No surprise. Mr. Carter has been one of the Premier’s fiercest critics, which should complicate relations between the city and the province going forward. It’s certainly something to watch.
I think everyone knows where this is ultimately heading: a deal is going to get done.
There is little chance that the new mayor is going to allow this deal to just explode in her face. The Saddledome is a falling-down wreck. It has to be replaced. The hockey team is central to the city’s very existence. There is no chance people living there want to see the team leave because the barn in which it is playing is an embarrassment that is no longer safe.
What we are witnessing now is mostly theatrics and CSEC and Mr. Edwards playing hardball. There is a raft of other projects that are supposed to be part of the arena build including a new bridge and renovations to buildings on the Calgary Stampede fairgrounds. All those initiatives are in jeopardy now, too.
So far, Ms. Gondek is trying to appear nonplussed by the turn of events. She’s talking about trying to find other partners for the project, and perhaps re-envisioning what it could be. That sounds a lot like starting from scratch, and I don’t think there’s a wide appetite for that.
My guess is this deal ultimately gets done. City hall is going to have to find a way to mollify Mr. Edwards and company without it looking as if they’re caving in completely. That could be difficult.
But the alternative is likely worse, for both the mayor and her city.
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