CalgaryNext proposal torpedoed by city report that pegs total cost at $1.8B

The actual cost of the CalgaryNext arena-and-stadium proposal would likely reach $1.8 billion, with Calgary taxpayers on the hook for at least $1.2 billion, according to a new city report that effectively scuttles the project as it stands.

Actual price tag would be twice what Calgary Flames owners claimed last summer, city staff say

Calgary Flames CEO Ken King says it makes sense to put the new sportsplex in the West Village because of the proximity to the Sunalta C-Train station. (Calgary Flames)

Hear what the Flames' Ken King thinks about the future of CalgaryNext: He spoke with the Calgary Eyeopener the morning after the report came out.

The actual cost of the CalgaryNext arena-and-stadium project would likely reach $1.8 billion, with Calgary taxpayers on the hook for at least $1.2 billion, according to a new city report that effectively scuttles the proposal as it stands.

That's double the $890-million total price tag put forward last August, when the Calgary Flames and Calgary Stampeders ownership group first revealed their proposal to build a new professional sports complex on the west end of downtown.

Given those costs, the report recommends looking at alternatives for replacing the aging Saddledome and McMahon Stadium, in conjunction with the Calgary Flames, Calgary Stampeders and the city-owned Calgary Municipal Land Corporation.

"Administration has come to the conclusion that CalgaryNext is not feasible in its present form or location," the report reads.

The best alternative, according to the report, is to build a new arena at Stampede Park and a new football stadium and field house at the existing McMahon Stadium/Foothills Stadium site at the University of Calgary.

Ken King, president and CEO of the Calgary Sports and Entertainment Corporation, unveils plans for a new enclosed sports complex in Calgary in August 2015. (Canadian Press)

Calgary Sports and Entertainment Corporation — which owns the Flames and Stampeders in addition to the Calgary Hitmen junior hockey team and Calgary Roughnecks lacrosse team — said last summer it was willing to put up $200 million of its own money for the $890-million project.

The company proposed finding the other $690 million through a $250-million ticket tax, a $240-million community revitalization levy (CRL), and $200 million direct from city taxpayers, in exchange for public use of a field house that would be included as part of the stadium component of the facility.

But the city report concludes the actual cost — including financing, related infrastructure and creosote clean-up of the contaminated land on the identified site — would be much higher.

Of the $1.8-billion total, the report estimates the total city contribution would be between $1.2 billion and $1.4 billion.

The estimate of the city's share includes direct contributions, the cost of the creosote cleanup, and the CRL, which is a sort of loan to be paid back by anticipated growth in property-tax revenues resulting from the project and related development.

The report cost the city $375,000 to do, not including the price of an environmental study the Calgary Municipal Land Corporation carried out to examine the creosote contamination, specifically.

City council is set to discuss the report at its meeting on Monday.

Time for an 'Option B'

Coun. Andre Chabot said the city needs to start looking for an "option B" because he sees no way the current CalgaryNext proposal can work.

"We might want to consider looking at a second option, which might be something of a scaled-back version of what was envisioned," he said.

"I don't think taxpayers are prepared to foot the bill on for-profit organizations," Chabot added.

Mayor Naheed Nenshi issued a statement Wednesday afternoon, highlighting the "significant challenges" identified in the report.

"I know many Calgarians are looking for a better arena space, but this is just one option," the mayor said of the CalgaryNext proposal.

"I've always said: public money must be used for public benefit and council will have a robust discussion about this on Monday," Nenshi added.

"City administration has also identified a potential alternative for council's consideration that may accomplish the same objectives, but at a lower cost."

Start of a conversation

Coun. Druh Farrell said the report validates the concerns she has had all along.

"The vast majority of it would be covered by Calgarians and we've got other priorities," Farrell said.

"I think it's just the start of a conversation."

Coun. Druh Farrell said public dollars towards an arena for a for-profit organization, is a tough sell in this economy. (CBC)

She said in the current economic environment, public funding would be a tough sell to taxpayers.

"The principle of public dollars going to public benefit of course is a fundamental one so they will have to look at sharpening their pencil," Farrell said.

"I can't imagine, especially during this economy, that Calgarians would welcome paying for an arena for a private organization, a for-profit organization, so there are other mechanisms to pay for this, I hope they explore them."

With files from Scott Dippel


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