Calgary mayor says Flames intend to pull out of new arena project

Calgary Mayor Jyoti Gondek says the Calgary Flames intend to pull out of a multi-million dollar Event Centre project originally announced in 2019.

In a series of tweets, the mayor said Calgary Sports and Entertainment Corporation (CSEC) chair Murray Edwards called her Tuesday to “pull the plug” on the deal.

“Today I am bringing you the unfortunate news that we have come to the conclusion where the event centre deal is not moving forward,” Gondek said in a press conference Tuesday night. “There was additional funding that had to be taken on by Calgary Sports and Entertainment Corporation. It appears that they are unable to make that financial commitment, following the approval of their development permit, so it would appear that they are ending the deal.”

The city and CSEC originally agreed to split the costs of building an 18,000 seat arena — estimated to be between $550 million and $600 million. In April, the project hit a snag during budget negotiations and a development permit wasn’t granted until November, months after the original August groundbreaking date. After the permit was granted — by unanimous vote from the city’s planning commission — an early 2022 target was set to begin construction.

However, according to the mayor, the two sides continued to negotiate some costs — specifically related to “climate mitigation” and “road/sidewalk right of way issues.”

2/6 The deal struck in summer of 2019 envisioned a $550 m deal w/costs split equally between CSEC & the City. In addition, the City provided land, 90% demolition of the ‘Dome, excess flood/site remediation, & levies. Total City contribution: $275m + $22.4m = $297.4 plus land.

— Jyoti Gondek (@JyotiGondek) December 22, 2021

4/6 I did not support that deal.

Since I was elected Mayor, Administration & my office have been working with CSEC to mitigate any additional costs. Two costs were identified: climate mitigation of around $4m and road/sidewalk right of way issues of $12.1m.

— Jyoti Gondek (@JyotiGondek) December 22, 2021

“The City came to the table to assist with $6.4m in roadways leaving $9.7m for the Flames. Based on this gap, CSEC informed me they are walking away from our deal,” the mayor wrote on Twitter. “On a project worth over $650m, to have one party walk away for 1.5% of the value of the deal is staggering.”

The CSEC responded to the mayor’s comments in a statement released late Tuesday that called the outcome disappointing but pledged the organization would remain in their current home, the Scotiabank Saddledome.

“CSEC’s primary objective in pursuing the Event Centre Project has been to provide Calgarians a first class facility with an entertainment experience, not only for hockey, but for other events including concerts, comparable to other major cities. However, at this point, it is clear that the City and CSEC have been unable to resolve a number of issues relating to the escalating costs of the Project.

“Accordingly, as the City and CSEC have been unable to resolve these issues, CSEC has determined that there is no viable path to complete the Event Centre Project.”

The Flames have played at the Saddledome since 1983. City council voted 11-4 in July of 2019 to approve the project, with then-Mayor Naheed Nenshi stressing the deal provided “a great balance of social and financial return” for the city.

“It was important on this particular deal that we had a great financial deal and I think we did,” Nenshi said at the time. “It was also important for us to think about the intangibles that we’re investing in, those things that make a city work.”

The late Ken King, who was vice-chair of CSEC at the time of the announcement,” said it was “a great deal.”

“The most fun will be proving to the city of Calgary we can exceed their expectations,” King added.