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Calgary arena: Done deal to stickhandling an election issue

Should further Calgary arena delays continue, this project approval could push past the city’s October municipal election.

After hearing that the project estimates – without a completed design – are between $50 million and $60 million over budget, mayoral candidates have already begun sounding off on the matter.

The project is already on pause because of budget differences. A scheduled August construction date will likely be missed.

Councillors held a closed session late in Monday’s combined meeting of council. They emerged on the Events Centre item to approve the session’s confidential content.  Coun. Jeromy Farkas, who is running for mayor, proceeded to ask a series of questions on the now-potentially $610 million arena project.

What do candidates have to say about the arena? Check their profiles here.

It was at that point that Planning and Development GM Stuart Dalgleish revealed that in order to satisfy some of the principles of each party, they were looking at a cost estimate that was as much as $60 million over the original $550 million agreed budget.

That latter amount ($550 million) was included in the 2019 agreement signed by both the City of Calgary and Calgary Sports and Entertainment (CSEC).  That agreement remains in place today.

Coun. Jyoti Gondek, also a mayoral candidate, said that’s an important aspect that’s being missed here. The city still has one deal – this deal – on the table.

Speculation that the arena will be $50 million to $60 million over budget, that a secondary facility is in play and that the CMLC is being removed as project manager are just that – speculation, she said.

“All three of those speculative points require a reconsideration vote,” she said.

“So, if any, or all of those things are on the table right now, it’s got to come back to Council for a public debate.”

Reconsideration votes require a two-thirds majority of council.

Mayoral candidates weigh in on arena fracas

While Coun. Farkas was able to extract some information during Monday’s meeting, he was chided by Coun. Jeff Davison – another mayoral candidate – after doing it.

“Now we have a ton of gaslighting going on and all kinds of allegations being made to try and alter deals,” he said during Monday’s meeting.

On Tuesday, more mayoral candidates jumped over the boards for a shift.

Jan Damery, who supports the arena project, said the process has been botched.

“When public funds are involved, it’s vital that there are clear lines of accountability. Two years after we thought we had a deal, it is obvious that we still do not have a defensible scope and budget,” she said in a prepared statement Tuesday.

“We are not seeing the accountability that is to be expected when spending public dollars. We have only had excuses that overruns are solely caused by inflation.”

She took shots at Couns. Gondek and Davison, saying they’re focused on having their names attached to a popular project and not on the governance of it.

Meanwhile, candidate Brad Field wants an urgent public hearing on the matter.

“A new arena is of vital importance to our city, but it appears to be 11 per cent over budget before we even get started. To get this right we need some sunshine to disinfect what clearly has been shown to be a poorly managed process by the council architects of the deal,” Field said in a statement.  

“It is time that Calgarians get real answers, not vague sprinklings of information in the middle of the night from a council that appears out of touch with what is going on with Calgarians’ money.”

The half-billion-dollar question

Gondek said that when the matter comes back July 26, councillors will be faced with a potential decision to put in more money.

“Who amongst us is ready to pump more money into this and who amongst us is saying that a deal is a deal,” Gondek told LiveWire Calgary.

“It’s a great deal. It was a great deal then, it’s a great deal now.”

LiveWire Calgary had previously reported that a cost overruns clause in the Project Framework Agreement could be triggered. This could add a minimum of $25 million in cost overruns, split 50/50 between the City and CSEC.  

There is a mechanism in place to recover the cost overruns through the Facility Fee Agreement.

In the event the item remains at an impasse through the summer, a deal would have to be hammered out prior to the Sept. 13 combined meeting of council for public debate.  

Nomination day opens Sept. 20. There are at least seven wards that will have a new councillor.

The next potential council meeting this item could be addressed is November 15, at the new council’s first combined meeting.