Event Centre committee members got a rundown of the agreements in principle for Calgary’s proposed $1.23 billion project, but no substantive new details were shared.
The Event Centre committee met Monday, the first time since the agreement in principle was announced in the weeks leading up to Alberta’s provincial election.
“I firmly believe a decade from now, we will celebrate the transformative and positive impact the Event Center and culture and entertainment district improvements has had on Calgary, our downtown and all Calgarians,” said GM of Planning and Development, Stuart Dalgleish.
“This is good city planning. This is good city building.”
The deal, as it stands would see the City front $830 million cash for the arena, with Calgary Sports and Entertainment Corporation (CSEC) putting in $40 million upfront, including their share of the community rink.
From there, CSEC will pay $17 million annually, plus one per cent (compounded) over 35 years, for an implied total of $748.3 million. (The final amount doesn’t specifically account for the inflation-adjusted value of that amount over the 35 years.)
CSEC will also provide $1.5 million annually to community sports funding over 35 years.
Also, the province is paying for infrastructure upgrades in the area – a cost that would have been shouldered by the City of Calgary under the prior Event Centre agreement ($300 million). The province will also purchase four redevelopment blocks which will be turned over to the city, who then gets to sell them for redevelopment. CSEC has the first right of refusal on those parcels.
The Rivers District Community Revitalization Levy uplift was also touted as a revenue generator. That’s the levy on the incremental property value increase due to a development in that district. While CRLs have been shown in some cases to have negligible impact on property tax uplift due to a displacement effect, the addition of new development on the four aforementioned blocks could significantly change the equation.
Other material changes in this plan versus the prior Event Centre deal
Michael Thompson, GM of Infrastructure Services for the City of Calgary, said this deal and the prior failed deal are materially different.
The new plan covers 10 acres, not seven, he said. There will be a community rink that’s open to the public after 4:30 p.m. and on weekends, serving a need for recreation space in that part of Calgary. There will also be indoor and outdoor gathering spaces, street facing retail, and they will own the infrastructure connecting to the new arena (roads, sidewalks, etc.)
Also different: The ticket tax and naming rights discussed in the last Event Centre agreement have been bundled together in the $17 million (+1%) annual payment, Thompson said.
“Our objective with this project is to enable the vision of the Rivers District and Culture and Entertainment District with commercial developments surrounding the new Event Center block,” Thompson said.
“This will generate both excitement and activity in the district and they’ll generate property tax which will be a further return to the City of Calgary.”
Event Centre committee chair, Ward 1 Coun. Sonya Sharp, said it’s impossible to compare the last deal and this one. She said she believes this is a great deal for Calgarians.
“This deal is bigger. It’s got a bigger scope. The funding is different. The site is different,” she said.
She pointed to one big aspect – $300 million for infrastructure and public realm, now covered by the province – as one the city would have had to tackle in the old deal.
Definitive agreements are still being negotiated, Sharp said. She said once that’s done and they get further confirmation from the provincial Treasury Board, the committee will have a better idea of the project timeline.
Some Calgarians have been critical that with the size of the investment, the city’s not garnering a revenue return from the building itself.
“The city isn’t in the business of making a profit on any city-owned building,” Sharp said.
“You can look at that within the Green Line, the LRT, libraries; I think what’s important is again, this is a public building. It is owned by the city and we have private investment supporting it.”
The City would own the land and the building after the 35-year term has expired, committee members were told.
No one gets exactly what they want: Coun. Chabot
Ward 10 Coun. Andre Chabot, who also sits on the Event Centre committee, said he believes this is a reasonable compromise for all parties involved. He said there were a lot of back-and-forth negotiations.
“As is typical in any good agreement, no one gets exactly what they want,” he said.
One thing that stuck out to him was the predictable annual return of $17 million, + one per cent annually.
“That would have been volatile under the previous agreement. Now it’s a very fixed, definitive amount that we will be receiving from Calgary Sports and Entertainment on an annual basis increasing on a 1% per year basis. And, there’s a lot more certainty around the longevity of the team in our city,” Chabot said.
Chabot also pointed to the Rivers District CRL and the pieces of that coming together. In 2020, Calgary city council approved extending the CRL to 2047 as it was set to expire in 2027.
“I’d say the seed has been planted,” he said.
“There are things that are already growing, and you can expect that things are not going to slow down. They’re going to only accelerate as we move forward.”
Calgary Chamber of Commerce president and CEO Deborah Yedlin also hailed the project as one important for Calgary’s future.
She said it was important for outside businesses and labour talent to see that the city invests in itself.
“As we look at our city as a place where we compete for capital, talent and opportunity, we need to have the facilities that show that we’re prepared and we’re looking forward in terms of what the potential of the city is,” she said.
Yedlin also said it will activate an area that, from a property tax perspective is “fallow.” She said it stimulates the area’s tax base.
“I think what we have to remember is that you’re taking up part of the city that is has been fallow, really, from a tax base perspective, and this presents a tremendous opportunity for the city going forward,” she said.
“If we want to really rebalance the tax base in the city, this is actually one way to do it.”
The timeline for definitive agreements to be in place is still by the end of summer 2023. No specific date was set for that to happen.