Flames owners boost ticket fee to help make back extra costs to build arena
Increased facility levy will be applied to non-sporting events hosted at new facility
There will be an increased fee on your concert ticket or other non-sporting event once the new arena is built.
After the City of Calgary and Flames ownership announced each will pay an additional $12.5 million for the new arena, the team owners decided to recover their portion by changing a higher ticket fee.
The arena is now pegged at $608 million — an increase from the originally budgeted $550 million — and the Calgary Sports and Entertainment Corporation (CSEC), which owns the Flames, will contribute $321 million of that.
And while CSEC agreed to also cover cost overruns on the project, it will also boost the facility fee on each ticket from 8.0 to 9.5 per cent.
The fee will be added only to non-sporting events, such as concerts.
The city manager has already approved the increased fee and it doesn't require council's endorsement.
Mayor Naheed Nenshi says he's personally fine with the increase and that he doesn't think it will change anybody's desire to go to an event.
"I've always been a proponent of user pay on this project," he told reporters on Tuesday. "And to me, increasing the facility fee to cover some of these costs, it'll still be lower than the facility fee in Edmonton, for example, and in most U.S. cities."
Moshe Lander, an economics professor at Concordia University in Montreal, said that the ticket surcharges are an appropriate step — and one that should have been taken earlier, instead of the city putting more money into the project.
"The people who use it are the people who should pay for it, and so the easiest way to identify users are the ones who are buying tickets," he said.
With the new arena likely lasting for decades, millions of dollars can easily be recovered through higher ticket fees, Lander said.
However, Coun. Jeromy Farkas thinks if CSEC can increase the ticket price, then something should be done for the taxpayers.
"If taxpayers are being expected to put in more, I believe that the city should have some latitude to increase our [ticket] fee so that we have the opportunity to make back more of our money," said Farkas, who is running for mayor.
"This is a business deal that we're talking about. And I believe that, frankly, this council got out negotiated. It makes zero sense that we would allow the Flames the ability to make back their money faster, whereas city taxpayers would not have that same rate."
The new arena, to be built in Victoria Park, will replace the Saddledome, which is 38 years old.
With files from Scott Dippel