Understanding the deal: Critics skeptical of Calgary event centre agreement ahead of Monday’s public meeting
A public meeting will give Calgarians an inside look into the exact details of an agreement in principle that could land the city a new event centre, but critics are already skeptical of the cost breakdown.
Coun. Sonya Sharp, chair of the city’s event centre committee says a meeting on Monday will allow administration to answer questions from councillors that have come up over the past six weeks.
Here’s a look at the cost breakdown:
- The arena itself = $837.6 million
- Transportation and infrastructure improvements = $238.4 million
- 1,000 seat community arena = $52.8 million
- Unspecified other costs = $58.5 million
- Parking for the arena = $35.4 million
- Enclosed plaza = $35.4 million
- “On site public realm” = $28.7 million
The $1.22-billion announcement came just days before the start of the provincial election campaign as Alberta’s UCP government committed $330 million for infrastructure surrounding the event centre, as well as 50 per cent of the funds for a community rink.
The city will be putting in $537.3 million to the project (44 per cent of total cost) which will go towards the new event centre, parking, an enclosed plaza, and 25 per cent of the community rink.
Calgary Sports and Entertainment Corporation (CSEC) will cover $356 million, but they won’t be paying the full bill immediately. They’re paying $40 million up front, followed by annual payments that will start at $17 million and increase by one per cent each year over 35 years
As well, CSEC is paying $1.5 million yearly to community sports programs as part of the deal. The Calgary Stampede will contribute with a land swap.
Sonya Sharp, the new councillor for Ward 1
Sharp says the city portion of the deal will come from funds rolled over from the previous deal, with money from the financial stability reserve making up the difference.
She notes that there will be no tax hike to cover the city’s investment.
“What we anticipate is the questions that the committee on Monday will have for administration will be very much the questions that we hear every day that we're seeing on social media,” said Sharp.
“We want to make sure we myth bust some of the misinformation that's out there, because I think that's really important at this point.”
'THERE IS ZERO REVENUE'
The deal in principle has received unanimous support from council members, but some critics are questioning how the costs are being framed by the city.
Ziad Fazel is a Calgary engineer who hold a business diploma and has long been involved with due diligence efforts on capital investments for the local private sector.
“This deal is corrupt. Administration has presented a corrupt, deceptive report to council and council in one vote has agreed on it,” Fazel said.
“They're supposed to have a fiduciary duty to act in our best interest to invest this land and capital in our best interest and they're throwing it all away for nothing.”
He says the cost-sharing breakdown is wrongfully framed on the city’s website showing event centre portion of the agreement as 56 per cent from the city, 38 per cent from CSEC and eight per cent from the province.
Fazel notes however that those upfront costs put forth by the city will be much higher since CSEC is only putting in $40 million at the very start of construction.
He says this would mean that the city is actually putting forward an additional $316 million at the very start of construction, making its upfront cost share sit at 89.7 per cent.
“The city is putting in $853 million and the only return is the repayment of $316 million of it and overall taxpayers are putting in $1.1 billion up front and CSEC is putting in $40 million up front into a mega-block of 10 acres that’s going to generate tens of billions of dollars,” Fazel said.
“This revenue will come from the arena, retail around the arena, from what looks like a hotel in the redevelopment block, from a parkade, and the city is getting zero of that revenue. So, the land is for free, no property tax, zero revenue and that’s for tens of billions of dollars being generated.”
Fazel added that in the nine-page report to council that was unveiled on April 24, it specifically stated that CSEC will get the operating agreement.
“That’s what the Coyotes are fighting for in Arizona, they couldn’t get it from Glendale as an extension of the operating agreement and that’s where all the money is,” he said.
“When you have an arena on which you have no financing cost and no property tax, it’s pretty easy to run a profit, these things make stinking loads of money, so the operating agreement allows the private sector partner to operate the arena, get all the revenues and we don’t get to see what it is, but this is where all the money is.”
'THE CITY IS NOT ISSUING DEBT': SHARP
Sharp responded to Fazel’s claims on Sunday, noting that the city will ‘not be issuing any debt’ for the event centre.
“I think that what's important for everyone to understand is that we’re getting a predictable and stable payment that the city can count on for a long period of time,” she said.
“The second thing is that after the 35-year term is up with CSEC, they will have paid the city approximately $750 million towards the event center block, which is currently estimated at $924 million.”
Sharp added that the $750 million does not include another $50 million that CSEC will be paying to the community sport initiative and future land sales.
“What's happening is there's a little bit of misinformation that's kind of percolating through social media," Sharp said.
“I think people also aren't aware of the $300 million that is going towards the public realm improvements that the province had signed on for. This cost was something that was flagged in 2018 when the cultural entertainment district work was done, and actually not included in the last deal.”
The City of Calgary initially did not talk about naming-rights revenue or ticket-tax revenue, but those details have since been added to the city’s website.
“All revenue streams, which include ticket surcharge and naming rights, within the Calgary Event Centre Block, are consolidated into one committed and predictable lease payment to The City – $17 million per year for 35 years,” reads the website.
This 35-year payment also includes an annual one per cent escalation.
In the 2020-21 season, the Flames generated $238 million in revenue per Forbes magazine and will likely generate further revenue with additional opportunities for concerts and other events with a new arena.
In a statement to CTV News, Sharp added the following:
"The operating and maintenance costs associated with the building over the 35 year term are the responsibility of CSEC," she said. "Different from a private building owner - The City is not looking to earn a profit from this transaction.
"The community benefits associated with having this amenity in the culture and entertainment district is the return to the community," she said.
PARCELS OF LAND
Fazel noted that the city could generate one-time revenue from selling four parcels of land near the event centre at market value, as well as the Victoria Park Bus Maintenance Facility. CSEC however, gets the right of first refusal on all those parcels.
It means that if somebody else wanted to purchase the land, CSEC could match the bid.
“This is really a way for CSEC to continue to control the city. The city is granting CSEC the rights of a tenant, CSEC is the tenant in the Victoria bus barns and they have the right of first offer to prevent it from going to a condo developer, but CSEC isn’t a tenant there,” said Fazel.
“Tenants paid tons of money in leases to have the right of first offer to prevent the buildings from being sold out from under them, and here they get the right of first offer, so are they already beginning to be given tenant rights so they'll get to use that land for free?”
Concordia economics professor Moshe Lander also weighed in on the arena deal in principle.
He is also questioning whether or not the Flames are getting additional benefits, especially when it comes to building commercial and residential development around the event centre, like what’s been done in Edmonton’s ice district.
Economist Moshe Lander
“That land development is usually coming from, if not the actual owners of the hockey team itself, then some branch that's connected to the owners of the hockey team,” he said.
“So there becomes a question then of: are there some sort of unfair practices going on here where if I want to build on the other side of the CTrain line, I have to pay commercial rates for that land development? But somehow if I'm on the other side of the CTrain, on the actual Stampede Grounds, I'm not going to necessarily be paying commercial prices to develop that property.”
CTVNews.ca Top Stories
The federal Liberal government has made a lot of promises to Indigenous Peoples. But do those promises line up with what communities on the ground really want and need, or reflect their diversity?
A Scarborough family said they were shocked to get a notice from the City of Toronto that the artificial grass in their backyard, including a putting green, will have to be ripped out.
A new study finds walking an additional 3,000 steps per day can significantly reduce high blood pressure in older adults with hypertension.
Economists warn both Canada's economy and individual Canadians could suffer from impacts of a U.S. government shutdown, and that those impacts will deepen and broaden the longer it lasts.
Indian Foreign Minister Subrahmanyam Jaishankar said on Friday there was a 'climate of violence' and an 'atmosphere of intimidation' against Indian diplomats in Canada, where the presence of Sikh separatist groups has frustrated New Delhi.
The country's top soldier and outside experts say that finding almost $1 billion in savings in the Department of National Defence budget will affect the Armed Forces' capabilities, although the defence minister insisted Friday the budget is not being cut.
A bail bondsman charged alongside former President Donald Trump and 17 others in the Georgia election interference case pleaded guilty to misdemeanor charges on Friday, becoming the first defendant to accept a plea deal with prosecutors.
Last living suspect in 1996 drive-by shooting of Tupac Shakur indicted in Las Vegas on murder charge
A man who prosecutors say ordered the 1996 killing of rapper Tupac Shakur was arrested and charged with murder Friday in a long-awaited breakthrough in one of hip-hop's most enduring mysteries.
For the past five days, vehicles laden with refugees have poured into Armenia, fleeing from the crumbling enclave of Nagorno-Karabakh in neighbouring Azerbaijan. In a special report for CTVNews.ca, journalist Neil Hauer recounts what it's like on the ground in Armenia.
Premier Danielle Smith says the first steps are coming this fall to reconfigure Alberta’s health delivery system — a plan the Opposition calls a recipe for more chaos from a government fresh off turning lab testing into a debacle.
A ceremony was held on Friday to mark the reopening of Edmonton's Queen Elizabeth Planetarium after years of restoration work.
A 39-year-old man who was recently released from jail with court-issued conditions was the subject of a public warning by Edmonton police on Friday.
According to police, Dr. Tracy Pickett, 55, was reported missing on Wednesday, prompting a large search at Pacific Spirit Regional Park. Her remains were discovered Thursday evening.
The B.C. Supreme Court has dismissed a neighbourhood association's attempt to stop the City of Vancouver from providing services to the massive Senakw development currently under construction at the south end of the Burrard Bridge.
The group behind the tiny yellow stickers that are being spotted at intersections all over Vancouver hopes they will lead to safer roads.
Newfoundland and Labrador Premier Andrew Furey made a solemn apology today to survivors of residential schools in southern Labrador.
Joshua Ghiringhelli is still be waiting to be fully licensed as a pharmacist in Nova Scotia almost a year after he moved to the picturesque rural community of Boutillier’s Point.
Every homeless person has a different story, no matter where they come from, and that is no different for Dianne Munnings from the Bahamas.
Tech holding company Tiny Ltd. says it's buying a majority stake in movie review platform Letterboxd. Victoria, B.C.-based Tiny has not shared what it will pay for the 60 per cent stake it will take in the film diary and rating website.
B.C.'s Green Party leader is dismayed Alberta's fossil fuel “war room” is targeting Nanaimo for phasing out natural gas hookups.
The return of a memorial totem pole to a remote community in northwestern B.C. nearly 100 years after it was taken allows the Nisga'a Nation to reach back for old values of respect, helping to chart a new path of reconciliation, the nation's president says.
An orphaned burgundy brick house sitting in the shadow of a midtown Toronto tower – one of the area’s last hold-out properties – sold for more than one million over asking this month.
The Toronto Blue Jays moved closer to securing a playoff berth Friday night with an 11-4 victory over the Tampa Bay Rays at Rogers Centre.
Three family members recently scored a major lottery prize and kept their win a secret from the rest of their loved ones.
The Societe de transport de Montreal (STM) is equipping special metro constables with a gel form of pepper spray to deal with violence. The irritant would be used "as a last resort in cases where safety is at stake," said an STM spokesperson in a statement Friday.
One person was arrested Friday as hundreds of protestors marched through the streets of Montreal to denounce the government’s response to climate change.
It's been a long wait, but six Ukrainian students who arrived in Quebec City to start school last month are finally in a classroom. The teenagers have been waiting for the education ministry to issue their eligibility certificates so they can study in English as they requested.
Passengers will not be boarding the Trillium Line until the spring of 2024, as construction continues on the new north-south light-rail transit line between Bayview Station and Riverside South.
The National Capital Commission held a ceremony to unveil the new sign for the Kichi Zībī Mīkan on Friday ahead of the National Day for Truth and Reconciliation.
The lowest-paid workers in Ottawa and eastern Ontario will receive a $1.05 an hour pay bump this weekend.
'Still so many questions': Arrest in Joshua Tarnue murder case brings mixed emotions for family, friends
The family and friends of Joshua Tarnue are left with questions following new police developments in the murder case.
A number of events are being organized around Waterloo Region to mark the National Day for Truth and Reconciliation on Saturday Sept. 30.
A major development in a local infrastructure project has been unveiled by the province.
A Prince Albert Police Service (PAPS) officer is facing charges in connection with two separate incidents.
Amid cries of support and criticism, the Saskatchewan government stays committed to expediting its plans to force a pronoun policy into law.
A Saskatoon woman is recovering after a harrowing incident in front of a city library in September.
A worker who was found unconscious Friday at the Cote Gold Mine site in Gogama has died, officials said Friday.
The man at the centre of a massive police search this week in Bracebridge has been found dead.
The North Bay Regional Health Centre said Friday that a critical shortage of emergency room doctors means longer wait times for less urgent cases.
Manitoba finance officials are reporting a $270 million surplus for the end of the 2022-2023 fiscal year.
A Winnipeg woman has pleaded guilty to handing out cannabis gummies to kids last Halloween.
A political expert says a new NDP candidate could change things in the Liberal stronghold of River Heights.
Amid cries of support and criticism, the Saskatchewan government stays committed to expediting its plans to force a pronoun policy into law.
Two men have now been charged with attempted murder after a stabbing incident involving a machete in Moose Jaw, police said.
A Regina high school volleyball tournament is educating student athletes on Indigenous culture and reconciliation.