Calgary agrees to fund half of new $550M hockey arena for Flames

Read the latest on this story | Nenshi says Calgarians angry over arena deal can have their say... in 2021

Calgary city council has approved a deal with the owners of the Calgary Flames to help finance what it calls a new event centre in East Victoria Park. 

Council voted 11-4 Tuesday afternoon, with Councillors Evan Woolley, George Chahal, Jeromy Farkas and Druh Farrell voting against.

The building will be the new home of the Flames and will act as an anchor for the planned entertainment district bordering the Stampede grounds on the east side of downtown. 

Coun. Diane Colley-Urquhart said the arena will be about more than hockey — it will be about development. 

"It is a fair deal and it is the right deal, for the right time," said Colley-Urquhart, who wore a Flames pin on her jacket for the occasion.

Just one week of feedback

The deal was announced last week and Calgarians were only given seven days to provide feedback. Council heard on Tuesday that over 5,200 residents submitted their views. 

That said, the deal was a take-or-leave-it proposal.

The Calgary Stampede and the Calgary Sports and Entertainment Corporation already approved the deal based on the understanding it would be dealt with by the city by Tuesday. 

"The deal that we have in front of us today … was really done on a commitment to timing," said Barry Munro, who led negotiations on behalf of the city.

Coun. Jeff Davison, the chair of the event centre assessment committee and a staunch proponent of an arena deal, said engagement would not change the deal. 

"Now is not the time to amend a signed multi-party agreement," he said at the start of Tuesday's meeting. 

Couns. Woolley and Farkas had both asked for more time for feedback, but that was not granted. City manager Glenda Cole told council the timeframe was pushed by all three negotiating partners — the city, the Stampede and CSEC.

"There is no reason to rush the deal. I find it to be a bullying tactic and an unnecessary ultimatum … being critical of one week of engagement doesn't make me anti-Flames, it doesn't mean I'm trying to kill this deal. It means I'm trying to do my job," said Woolley, who voted against the deal.

The approval of the project comes just shortly after council approved $60 million in cuts to the fire department, transit and affordable housing. 

The basics of the deal are that capital costs of the building would be split evenly between CSEC and the city, with each providing $275 million in cash. 

The city will own the arena and the land it's built on — while CSEC will pay 100 per cent of the operating, maintenance and day-to-day repair costs — but all revenues will go back to CSEC.

The team also will get the option to acquire some nearby land — the site of the former Enoch Sales house and the Victoria Park bus barns, with valuations to come.

The city will get two per cent of ticket revenue at all events held at the building and a facility fee that  will be capped at $3 million a year for the first five years.

Calgary Mayor Naheed Nenshi said following the vote that it was a question of intangible versus tangible benefits.

"Are those intangible benefits worth … $47 million in today's money over a 35-year period? And I am satisfied they are," he said.

"You think about community spirit, you think about what it means for people getting together. These things actually do have a value. It's just not a value you can quantify. And economists agree that value means something to the city."

But not everyone agreed the benefits outweigh the costs.

"In comparison, there's a number of smaller city initiatives that received more consultation than this $300-million arena deal," Franco Terrazzano, Alberta director for the Canadian Taxpayers Federation, said.

"To be frank, city councillors should be ashamed of themselves for how they handled this deal."

There has been extensive debate about the return on investment for the city, and council heard on Tuesday that over the course of the 35-years of the deal, the city would net -0.6 per cent with direct returns, and 1.4 per cent when indirect benefits are considered. 

Those indirect benefits stem exclusively from forecast property tax revenues from development spurred by the project and rejuvenation of the area.

The Rivers District, as it's known, incorporates the fast-gentrifying East Village and is guided by the city-owned Calgary Municipal Land Corporation and uses a community revitalization levy as a carrot for development. 

Essentially, property taxes from the area are segregated from the rest of the city's haul and are used to fund projects in the area in order to entice private developers to set up shop, thereby driving more tax revenues. The plan has succeeded so far in the transformation the once-moribund East Village. 

In the entertainment district that would house the event centre, council has already approved funding for an extension of the BMO Centre for conventions and major events and has an eye on expansion of Arts Commons. 

A fourth major project, a multi-use fieldhouse that's envisioned for the area around McMahon Stadium, was also identified as a priority by city council. 

Coun. Joe Magliocca said before the vote that he guarantees the new event centre will lead to the Flames bringing home the NHL's Stanley Cup championship.

"That didn't work so well for the Oilers," Nenshi joked.