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Calgary Flames arena deal to include 35-year commitment to stay: city official

A $1.2-billion deal to replace Calgary's aging Saddledome with a new National Hockey League arena would come with a 35-year lease that includes a commitment from the owners of the Calgary Flames to stay in the city, says a city official.

The City of Calgary, Alberta government, Calgary Sports and Entertainment Corp. and Calgary Stampede reached an agreement in principle in late April.

The $1.2-billion price tag for the event centre project includes $800 million for the new arena in addition to parking, transit improvements, a new community rink and an enclosed plaza.

Council's event centre committee met Monday to receive a public presentation from city administration on the project and ask some of the questions that have come up since it was announced.

Michael Thompson, general manager of infrastructure services, said the city continues to negotiate the final agreement and hopes to have it complete by the end of summer.

"The parties have agreed to the major terms: the scope of what's being built, the estimated costs and the financial contributions," he told the committee.

The city, he said, would contribute about $515 million from its reserves and another $360 million from its working capital toward a long-term lease with the Calgary Sport and Entertainment Corp.

Thompson said CSEC would pay $40 million upfront.

It would then pay $17 million annually in lease payments, increasing by one per cent each year, for another $708 million over the 35 years.

The city will also sell off five parcels of land in the area, with CSEC having the first opportunity to bid on them.

Calgary's Chamber of Commerce says it supports the deal and believes city council will get it done.

"There's a sense of a commitment to redevelop those lands," said president Deborah Yedlin.

"There's opportunity, from a hotel standpoint, to really capitalize on the visitor economy that is, you know, really getting a lift from the expansion of the BMO Centre."

Coun. Andre Chabot said there are concerns from some Calgarians that a lease could be terminated.

"I know there are other provisions in that agreement that we can't maybe reveal at this point, but it's a question of certainty from our perspective and risk aversion," he said.

Thompson agreed it's important for the city to consider its risk.

"We've got a commitment from Calgary Sports and Entertainment Corp. that they will be staying in Calgary for 35 years as part of this agreement," he said.

One sports economist at Concordia University says the new details prove the deal is not as beneficial for the city as it is for the Flames.

"It was never a good deal for the city," said Moshe Lander.

"The only thing the city knew was that they had to replace the arena. But once you know that you have to replace the arena, the leverage shifts to the ownership group. They basically held the city over a barrel and now we're seeing the results."

No one from CSEC could immediately be reached for comment.

It owns the Flames in the NHL, the Wranglers in the American Hockey League, the Hitmen in the Western Hockey League and the National Lacrosse League's Roughnecks.

The Alberta government is not contributing directly to the arena but has said it plans to fund up to $300 million on public transit and road improvements, site utilities, reclamation and other supportive infrastructure as part of the deal.

The province would also contribute $30 million to cover half the cost of the 1,000-seat community rink if its share is approved by the provincial cabinet and the Treasury Board before the end of summer.

With files from The Canadian Press