Calgary Flames arena deal on thin ice after team asks for $70M more from city: sources
CALGARY -- Development on the city's new event centre, which is expected to be the new home of the Calgary Flames, has been paused over a discrepancy over the budget for the project, officials have confirmed to CTV News.
The Calgary Municipal Land Corporation (CMLC), along with its partners with the City of Calgary, provided an update on the progress of the project planning at a closed-door meeting of council on April 13.
At that meeting, the CMLC said "there is a difference in the current budget estimate and the program requirements for the facility."
There is no official statement about what the differences could be, but sources with direct knowledge of the negotiations, who is not permitted to speak publicly about the details, tells CTV News that the Calgary Sports and Entertainment Corporation (CSEC) requested:
- An additional $70 million
- The CMLC removed as a project manager
- More land allocated for the project
- Control over traffic around the new rink
As a result of the issue, the CMLC says it will call for a temporary stop on the planning work until it can be resolved.
"The decision to take this pause is the responsible and prudent approach to ensure we find the best solutions to move the project forward successfully, without incurring any additional costs on the project while these discussions progress. The team is working collaboratively to find a suitable path forward," said Kate Thompson, president and CEO of the CMLC, in a statement.
CSEC won't provide any further statement beyond what the CMLC said regarding the project.
Mayor Naheed Nenshi says the situation involving the arena deal is not unique and it's better that it unfolded this way right now rather than at a later date.
"(It's) far better to have these issues sorted out at this stage than to have unexpected cost overruns after construction has begun."
The deal for Calgary's new event centre was signed back in December 2019, with $550-million price tag split 50/50 between the Calgary Sports and Entertainment Corporation and the City of Calgary.
The land and building will be owned by the city and the Flames’ ownership group will cover the operation and maintenance costs for 35 years.
The city will get two per cent of the ticket revenue and $250,000 per year for the first 10 years for the naming rights. Once the arena is completed and turned over to CSEC, it will pay taxes to the city, though the exact amount is redacted in the public agreements.
CMLC will get $8 million to work as the project manager for the planning and building stages of the rink.
All cost overruns when building the area would be covered through a contingency fund or by scaling back the project. However, if more funding was needed when both of those options had been exhausted, the Flames and the City agreed to split the costs.
Construction of the arena is expected to begin sometime this year.
(With files from Jordan Kanygin)