The new home for the Calgary Flames could be the most expensive arena ever built in Canada under a deal unveiled last week, backed by more direct municipal cash than any hockey rink before it.
The city’s councillors and Mayor Naheed Nenshi, in the midst of approving $60-million in budget cuts, will vote Tuesday on whether to fund half of a proposed $550-million facility for Calgary’s professional hockey team.
The city and the owners of the Calgary Flames struck the deal now before council after four months of negotiation that involved almost no input from city councillors. Before those negotiations, there were years of sometimes acrimonious talks about building the new arena.
Councillor Jeff Davison, who chaired the city committee responsible for the arena, attended none of the hundreds of the meetings during negotiations. Instead, the deal was agreed to by Ernst & Young executive Barry Munro, city manager Glenda Cole and the head of the city’s redevelopment arm, the Calgary Municipal Land Corporation.
“It was really important that councillors didn’t have any influence on that negotiating group. None of us are experts. We needed the city manager, we needed someone who knew the land and someone who could put a deal together on our behalf. We found the right guy in Barry Munro and four months later, here we are,” Mr. Davison told The Globe and Mail. He described the process as “hands off” by elected officials.
Mr. Munro, who did not respond to an interview request, was brought on after Mr. Davison exchanged letters with the Flames owners that established what the two groups were looking for in a new arena. The $550-million budget could fund a smaller community rink in addition to the arena, although those details have yet to be finalized. No public information has been released on which party would be responsible for cost overruns in construction, which could start in 2021.
Councillor Evan Woolley questioned why the deal wasn’t shown to elected officials sooner, who now have only a week to digest the information and vote on it. Last week, council had to approve 23 pages of budget cuts and hold talks on whether to delay or redesign a $4.9-billion transit line.
“Just in terms of due diligence and process there’s a huge gap there and like a governor on the board of directors of a company, I have a fiduciary duty. And my due diligence has to be fast, just one week,” Mr. Woolley said. He asked council to delay the arena vote to September but his request was turned down.
The arena deal has attracted fans and critics since it was released late last Monday. Some have seen it as the best way to boost spirits and keep the Flames in a city struggling because of an oil crash that started in 2015, while others have asked why a profitable franchise can’t pay for its own facility at a time of shrinking municipal budgets.
On top of the city’s investment of $275-million, if the deal is approved, taxpayers will also be required to spend $12.4-million demolishing the nearly 36-year-old Saddledome and millions more for new infrastructure around the facility, which will be built about 100-metres away from the existing arena. In exchange, the city expects to collect a ticket tax as well as some additional property taxes in the expanding area east of downtown. The Flames will stay in Calgary for 35 years under the deal and will continue to support local community groups with over $2.5-million in annual funding. The arena itself will be city-owned and will not pay property taxes.
“The deal is very similar to the one the city has with the team on the Saddledome. It’s very status quo. But that $275-million is a big number and city council should have held out for a better deal and stared them down,” said Moshe Lander, sports economics professor at Concordia University in Montreal.
“I was pretty disappointed in the deal. This is by far the largest amount of public funds used to build any arena in Canada. No one has come close to that figure yet in direct public funds,” he added.
Rogers Place in Edmonton, the most expensive arena built in Canada to date, opened in 2016 and cost $506-million in 2019 dollars - about $370-million of which was publicly funded. That arena will eventually receive more in public support than Calgary’s proposed facility, however, much of Edmonton’s public funding comes from diverting future property-tax increases.
Mr. Davison rejected the criticism that the city is giving too much money to a profitable enterprise. “When people talk about us giving money to millionaires, that’s not it. This is a civic-owned facility, they are actually giving us money. To get a partner to write you a cheque for $275-million is hard,” he said.
Talks for a new arena broke down publicly in 2017. At the time, the Flames called those discussions “spectacularly unproductive.” National Hockey League commissioner Gary Bettman then visited Calgary and threatened that the Flames could be moved unless the city brought forward substantial funding for an arena.
Officials from the city and the Calgary Flames organization have been largely quiet on the arena deal since it was unveiled last week. Mr. Nenshi went into the 2017 mayoral election, which he eventually won, in a standoff with the NHL over the arena. The mayor has now come out in support of this latest deal. His office declined multiple requests to speak to speak about the arena. The Calgary Flames also declined multiple requests to comment.
After years of on-again off-again, often-bruising talks between the Flames and Mr. Nenshi, this deal has the fingerprints of a tired council, Mr. Lander said. “For city council, $275-million is the price of peace with the Flames.”
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Justin Giovannetti