Calgary arena battle looms large over municipal election

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Calgary's municipal election officially kicks off this week but already the first issue of the mayoral race is clearly defined: Incumbent Mayor Naheed Nenshi's handling of the negotiations for a new $555-million pro-sports arena.

The clash was laid out as Mr. Nenshi and the ownership group of the Calgary Flames took potshots at one another on an almost daily basis last week. As the list of candidates for the Oct. 16 municipal election becomes official, the Flames are expected to fire another salvo as they unveil the specifics of their proposal to replace the 34-year-old Scotiabank Saddledome.

Whatever Flames president and chief executive Ken King says this week is sure to fuel the debate over how much public money should go to a new arena, how much arena debate will overshadow other municipal issues, and whether the fight will benefit Mr. Nenshi or his political rivals on election day.

Mr. Nenshi's campaign chair Chima Nkemdirim says Friday's duelling press conferences between the city and the Flames resulted in an influx of donations and volunteers for Mr. Nenshi's camp over the weekend. However, his political opponents say the impasse is a clear example of the current mayor not being able to work constructively with those he disagrees with.

The issues involved in the arena deal are even more complicated than they first appear, because they also include Calgary envy of the Edmonton Oilers' gleaming new Rogers Place three hours north, the need for a new arena for a potential 2026 Olympic Winter Games bid, and the still-precarious state of Alberta's oil-focused economy.

The fracas began Monday, when Mr. Nenshi came out with a campaign-style video that showcased his vision for a cultural and sports centre in the Victoria Park and East Village areas of downtown Calgary. In the video, he states the city is at the table in negotiations for a new arena.

"He started it," mayoral challenger Bill Smith said of Mr. Nenshi's video. "He started negotiating in public. And I think you have to have more respect for your civic partners than that."

Calgary Sports and Entertainment Corp., the parent company for the Flames, certainly viewed the video as a provocation. They said the last meeting they had with city officials was July 31, with no progress since. By Tuesday, Mr. King said meetings on the financing of the new arena have been "spectacularly unproductive," and declared them finished.

In rebuttal, city council voted to release the details of their last proposal. Speaking to reporters on Friday, Mr. Nenshi said the city offered to chip in the equivalent of $185-million for a new arena in Victoria Park, including land and demolition costs, plus tens of millions in indirect costs such as upgrading utilities and a new light-rail transit stop. The Flames would contribute one-third of the costs and a ticket surcharge would cover the rest.

"The narrative that me or that council doesn't want a new arena – it just ain't true," Mr. Nenshi said. "Calgarians have told us, you know what, we're willing to make an investment. We're not willing to give away the farm."

Mr. King fired back shortly afterward, rejecting the idea that his disclosure was political – but adding it wouldn't have been fair for Calgarians not to know the two sides are at an impasse.

"We weren't trying to poke a stick in anybody's eye," Mr. King told reporters.

The Flames will reveal their negotiating position this week. According to municipal sources who spoke to The Globe and Mail, the ownership team wants an arena deal that includes more in the way of money, tax breaks and potentially even free public transit to games.

If this wasn't playing out during an election period, the position of the ownership group might be chalked up to simply playing hardball. But Mr. King's announcement that negotiations are kaput comes just a month before a municipal election where Mr. Nenshi is being seriously challenged by Mr. Smith, a well-known small-c conservative and lawyer, and city councillor Andre Chabot. It has opened the Flames organization up to criticism that they are playing politics.

Others question why Flames owners, who include billonaires such as Murray Edwards and Clay Riddell, are asking for more in the way of public dollars for a project that will almost certainly include more luxury suites to maximize profits.

Mr. Nenshi, on the other hand, is facing lower polling numbers than he has ever seen. His critics say spending in the recession-weary city – including on controversial public art and a public-transit megaproject – needs to be severely reigned in. He has often been criticized for being disconnected to his council, and some Calgary constituencies.

Mount Royal University political analyst David Taras said he believes the arena issue could galvanize a much higher voter turnout.

"Does the mayor become a hero? Does he become a villain? It depends how it plays out."

With a report from Carrie Tait