Done deal: Calgary taxpayer-funded arena now carved in stone

It's no longer hypothetical. A final deal has been signed to build a new home for the Calgary Flames, with the help of $290 million from city taxpayers.

Formal agreement signed between city, Stampede and Flames owners

This rendering by The Rapid Eye Movement shows the proposed events centre that would replace the Saddledome in Victoria Park in Calgary. (The Rapid Eye Movement/City of Calgary)

It's no longer hypothetical. Calgary taxpayers have bought themselves a new NHL arena.

Coun. Jeff Davison says a final deal has been signed to make the controversial new event centre — a new home for the Calgary Flames — a reality.

"I am pleased to announce that definitive agreements are signed between the city, the Calgary Flames and the Stampede for Calgary's new event centre and culture and entertainment district. Onward to the next chapter of our city's story," Davison tweeted Thursday morning.

That taxpayers are paying $290 million toward the project — pegged at $565 million — has divided the community, while the city makes deep cuts to services and positions.

The Calgary Flames are paying $275 million toward the arena as the main tenant.

Coun. Jeff Davison, an enthusiastic cheerleader for the arena, says the city agreed to commit an additional $15 million in taxpayer funding to cover land transfer and demolition costs. (Scott Dippel/CBC)

The city had originally committed to simply match what the Flames were offering — $275 million — but through the negotiation process, increased the taxpayer portion by $15 million to cover land transfer and demolition costs, Davison explained later Thursday.

Coun. Evan Woolley convinced only three fellow councillors that reconsidering the taxpayer-funded portion of the arena was the way forward. Most of his colleagues voted against that idea last Friday.

Woolley had floated the idea of diverting funds to the Green Line project instead.

The arena deal also comes just over a month after a provincial budget slashed funding to the Green Line over the next four years by roughly 85 per cent — from $550 million to $75 million.

The Green Line is a new leg of the city's light rail transit system originally proposed to run from the far north to the far southeast of the city, connecting communities previously served primarily by bus routes.

The $4.9-billion project — Calgary's largest infrastructure project ​​ever — had commitments from all three levels of government, until the provincial election in April made the province's portion less certain.

The building will be home to the Flames and will act as an anchor for the planned entertainment district bordering the Stampede grounds on the east side of downtown. 

Coun. Diane Colley-Urquhart had argued the arena will be about more than hockey — it will be about development. 

"It is a fair deal and it is the right deal, for the right time," she said in July.

The proposed deal was announced mid-July and Calgarians were only given seven days to provide feedback. Council heard from more than 5,200 residents who submitted their views. 

The deal was a take-it-or-leave-it proposal. The Calgary Stampede and the Calgary Sports and Entertainment Corporation already approved the deal based on the understanding it would be dealt with by the city at that time.

"The deal that we have in front of us today … was really done on a commitment to timing," Barry Munro, who led negotiations on behalf of the city, said back in July.

Enthusiasm for taxpayer funding has evolved significantly over the past five years. In 2014, nearly every councillor was against spending tax dollars on an arena, the Calgary Herald reported.

The Flames have agreed to be the primary tenant, former city solicitor Glenda Cole said Thursday.

Munro said there are 16 or 17 agreements that make up the entire package. He said, in his view, the deal is consistent with what was approved in July.

The Flames ownership group says the agreement is a move in the right direction.

"[This] represents another important step in the process that was announced in July," Calgary Sports and Entertainment Corporation (CSEC) CEO John Bean said in a statement. "We now turn our attention to the execution of the project."

'Not the right deal'

A sports economist says the city's current economy and tax environment add to a perfect storm of reasons not to proceed with this arena.

"The Flames turned an amazing regular season last year into a shocking first-round exit and current on-ice performance that is disappointing at best and the team lost its coach to admissions of racism and generally abusive behaviour toward his players and now the city decides to announce taxpayer money for the arena?" asked Moshe Lander of Concordia University.

A good public relations campaign should have been employed by the city, he said.

"They learned nothing from the announcement of the deal-in-principle this summer when they also mangled the news release to coincide with millions of dollars of cuts in essential services. The city needs a new arena, no doubt, but this was not the right deal and it creates the template for CSEC to follow with city council when it wants to get a replacement for McMahon Stadium."

The Calgary Municipal Land Corporation (CMLC) will be the project development manager.

An environmental assessment of the site will start this month, followed by public information sessions, CMLC's Kate Thompson said.

Public engagement on details around the project will start in the new year, with a report scheduled for April.

With files from Scott Dippel, Drew Anderson