City, Flames agree to formal event centre negotiations

The City of Calgary and the owners of the Calgary Flames upgraded their relationship status Wednesday to something a little more serious.

The city issued a release stating that they've agreed to begin formal negotiations with Calgary Sports and Entertainment Corporation on the terms of a new event centre that would house the Flames, Hitmen, Roughnecks, big-name concerts, and high-profile comedians.

"We’re at the beginning of an important stage," said Ward 1 Coun. Sonya Sharp, chair of the event centre committee. "A new event centre for our city will attract investment and international events. It will have enormous benefits for visitors and for Calgarians. We look forward to working with CSEC for our mutual benefit and for a result that works for everyone."

The announcement marks the formal resumption of direct negotiations between the two groups after the previous deal broke down when CSEC pulled out over concerns about supply chain disruptions and rising costs.

The latest series of negotiations was facilitated by a third party group led by Guy Huntingford, John Fisher, and Phil Swift, who the Flames said played an instrumental role in keeping the conversation moving forward.

"We appreciate the efforts of Guy, John and Phil," said John Bean, president and CEO of CSEC. "All parties share a collective desire to see a new event centre constructed in Calgary. We look forward to discussions with the city to see if we can find an acceptable path forward."

For the next round of negotiations, the city will be represented by management consultants CAA ICON, a division of CAA Sports. The organization has helped negotiate numerous arena and stadium deals across North America, including the new Chase Center in San Francisco, Allegiant Stadium in Las Vegas and Petco Park in San Diego.

"This new team has the right expertise to get the best outcome possible for Calgary," said Sharp. "Our environment has changed quite a bit over the past couple years. With everything we have learned, I am confident that CAA ICON representing the city is our best path forward and reflects how important this project is."

Sonya Sharp, the new councillor for Ward 1

There is no fixed timeline for the next stage of negotiations but the city says there is a sense of urgency moving forward, to find the right blend that fits the needs of both parties.

"I must emphasize this point," said Stuart Dalgleish, general manager of planning and development services for the city. "We must do this right, which means we will need space and we will need time to work on a successful agreement. We will be keeping our discussions confidential and reporting to the event centre committee when the time is right."

'A VERY HIGH PRICE MEDIATOR': SPORTS ECONOMIST

Sports economist with Concordia University, Moshe Lander weighed in on the formal negotiation process for Calgary’s event centre.

He says the prospect of working with CAA ICON is promising, but also likely comes with a hefty price tag.

"It’s a very high price mediator and so their job is to make sure that a deal does get done and so since CSEC and the city were unable to come up with a deal by themselves, then this will at least ensure that a deal gets done," said Lander.

Economist Moshe Lander

"What's going to be missing, of course, is that CAA ICON is not going to charge an insignificant sum. They're not going to do it as an act of generosity."

Lander adds that the rising inflation rate is also expected to add to the burden of construction costs the longer it takes for a deal to be struck.

"When we talked about the original Saddledome deal, the issue was always that ‘whatever number you tell me, double it’ and that's probably what it's going to be and anybody who's ever done home renovations will understand that right now."

"Those were good ideas in periods of inflation of two per cent. Now we're talking with today's figure of 6.9 per cent and that thing's not going to come down to two per cent anytime soon."

The cost is a factor, but also the timing depending on how the Calgary Flames fare in the NHL season and if a postseason run is once again in the cards.

Lander says if the Flames go on a longer playoff run, then construction on a new arena could be pushed further into the year.

"I don't envision that we're going to see any shovels in the ground probably for another six to 12 months, but it really can happen as fast as everybody wants it to," he said.

"The city and the Flames were so close to a deal last time so what are we doing here now? Just figure out the missing number shared two ways and let's be done with this already. We're going to drag this out now for an entire season."