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Calgary’s Event Centre share could reach $300 million

The City of Calgary could shoulder at least half the cost of a new Event Centre with a proposed new term sheet, LiveWire Calgary has learned.

Sources have confirmed the value of the city’s proposed contribution in the revised term sheet is nearing $300 million, but there are two additional amounts – land cost and demolition – that may not yet be accounted for in a potential arrangement. Both of these elements have been sticking points in past negotiations and have been estimated at a total combined cost of $50 million.

The sources said ownership of the arena and how potential property tax or rent would be allocated hasn’t yet been determined. How the city’s investment would be returned, directly or indirectly, also isn’t clear at this time and could be part of upcoming negotiations.

In mid-December last year, the Calgary Municipal Land Corporation (CMLC) told a city committe the cost for a new Event Centre would likely be between $550 million and $600 million for a 20,000 seat arena.

Calgary’s previous ‘final’ arena offer had them contributing $185 million from city coffers.

“Calgarians have told us, ‘We’re willing to make an investment. We’re not willing to give away the farm,”’ Mayor Naheed Nenshi said in September 2017, after revealing details of their final proposal.

Talks over a new NHL arena between the Calgary Flames broke off in 2017 when the two sides couldn’t come to an agreement after years of going back and forth – starting with the CalgaryNEXT West Village concept back in 2015 and then coming back to a Victoria Park project. At that time, it was estimated the cost of a new arena would be $500 million.

“The City’s proposal is just not workable (or even for that matter, “fair”, based on other arena deals in comparable cities),” reads a Calgary Flames public document right published after the talks broke down.

“As a result, after over two years of discussions, we see absolutely no basis upon which a new arena agreement can be achieved with the City, and we have concluded that there is no point to continue the pursuit of a new arena in Calgary.”

Calgary’s Scotiabank Saddledome. LIVEWIRE CALGARY FILE PHOTO

In their final pitch, the Calgary Flames said they would contribute $275 million towards the cost of a new arena, saying it was similar to prepayment for 35 years of tenancy.  Their proposal totaled $500 million, with the final $225 million being accounted for through a Community Revitalization Levy (CRL).

At the time, the city’s term sheet showed a cost split of: $185 million city contribution, $185 million from a ticket tax and $185 million from the Calgary Flames – totalling $555 million. The Flames saw the ticket tax as revenue that was already theirs, so they saw that as an additional contribution they were making – bringing it to $370 million.

In October of last year, council voted to re-engage the Calgary Flames at the negotiating table on an arena deal, striking the Events Centre Assessment Committee.

FLAMESNATION: Public funds could cover half of new Calgary arena, exceeding current trends

In early March, Calgary city council approved $1.5 billion in infrastructure projects that included the Event Centre, the BMO Expansion, the phase 1 expansion of Arts Commons and a multi-use fieldhouse.

The breakdown of how that $1.5 billion could be divided among the projects has not yet been made public.

Now, it appears the city is moving closer to the Flames’ final position, or a roughly 50/50 split, with who bears the extraneous costs (land, demolition) still unknown. Specific funding structure isn’t yet known, the sources indicated to LiveWire.

Council recently struck a subcommittee to take the next steps in negotiations with the Calgary Sports and Entertainment Corporation (CSEC), owners of the Calgary Flames.

It’s also expected that more details on a potential Event Centre negotiating framework, and information on the overall $1.5 billion infrastructure plan, are expected at the March 18 council meeting.