The Saddledome is shown in Calgary, Alta., Friday, Sept. 15, 2017.A new home for the Calgary Flames will be debated Tuesday in city council chambers. The city and Flames owner Calgary Sports and Entertainment have a tentative agreement to equally split the cost of a $550-million event centre which would replace the 36-year-old Saddledome. CANADIAN PRESS/Jeff McIntosh

The Saddledome is shown in Calgary, Alta., Friday, Sept. 15, 2017.A new home for the Calgary Flames will be debated Tuesday in city council chambers. The city and Flames owner Calgary Sports and Entertainment have a tentative agreement to equally split the cost of a $550-million event centre which would replace the 36-year-old Saddledome. CANADIAN PRESS/Jeff McIntosh

Decision time looms for new Calgary arena and home for NHL’s Flames

The city vows municipal property taxes will not increase to pay for the event centre

A new home for the Calgary Flames will be debated Tuesday in city council chambers.

The city and Flames owner Calgary Sports and Entertainment have a tentative agreement to equally split the cost of a $550-million event centre which would replace the 36-year-old Saddledome.

City councillors can approve the deal, vote it down, or delay by asking for a longer period of analysis and consultation.

Mayor Naheed Nenshi intends to vote in favour of the project, calling it “a good deal for Calgary.”

If approved, the soonest shovels would go in the ground is 2021.

In the agreement unveiled last week, the city says the projected return to Calgarians is $400.3 million over the course of the 35-year agreement with the Flames.

That figure incorporates revenues from ticket sales, a portion of naming rights, retail property taxes in the building, CSEC donations to amateur sports programming and tax generation in the district where it will be built.

But a Calgary economist disputes that figure, saying inflation wasn’t taken into account.

“That number is unquestionably wrong,” University of Calgary associate economics professor Trevor Tombe told The Canadian Press.

“A dollar in 35 years is worth a lot less than a dollar today. Inflation alone eats away half the value of that dollar over the course of three and a half decades.

“They’re not at all incorporating these issues around the time value of money. It is just Finance 101. This is not how you do it.”

He also points out a $47-million net loss on the project wasn’t made public at the news conference last Monday, and that information only came to light when administration was pressed by councillors later that night in chambers.

But a loss of $47 million over 35 years isn’t necessarily a deal-breaker, he said.

“It’s a money loser, but that’s OK,” Tombe said. “We don’t fund the zoo because we think it will make money. We do it for other reasons and there are those non-economic considerations here too.”

The city vows municipal property taxes will not increase to pay for the event centre.

If revenue streams to the city stated in the proposal were eliminated, Tombe says the arena’s cost to the average Calgary homeowner would be $15 per year in perpetuity.

“Personally, I actually come down and say ‘hey, the intangible benefits, redeveloping that area and the arena for Stampede and other community stuff and civic pride’ to me, that’s worth fifteen bucks a year, but individuals will differ,” he said.

“Whether it is a good deal for the city or not, it’s subjective. We should really be talking about the non-economic intangible benefits.

“In order to have that conversation, we need accurate, transparent and digestible costs so we can say ‘OK, are those costs worth it?’”

Talks between the city and the Flames abruptly broke off in 2017 when a new arena became a fractious civic election issue.

CSEC is putting up the same amount of up-front cash it was prepared to give two years ago — $275 million.

One major difference in the current deal is the Flames will not pay property tax as the city proposed two years ago. The city would own the building.

CSEC, which also owns the WHL’s Hitmen, CFL’s Stampeders and NLL’s Roughnecks, initially didn’t want to give the city any ticket revenue.

The corporation has agreed to hand over 2 per cent from every ticket sold to the city as a facility fee, capped at $3 million annually for the first five years and estimated to bring in $155.1 million over 35 years.

All revenues generated by the event centre go to CSEC, minus its commitment to the city and the sharing of parking revenues with the Calgary Stampede board.

The Flames would be responsible for the operation, maintenance and day-to-day repairs of the event centre.

CSEC has committed to upping its contribution to local sport groups, which the city states amounts to $75 million over the course of the 35-year term.

The event centre is part of revitalization plan for the east side of downtown near the Stampede grounds.

Calgary’s mayor acknowledges the optics of committing to a new arena right now are poor in the wake of last week’s $60 million in budget cuts.

“Let’s be real. This timing stinks,” Nenshi wrote Saturday in social-media post.

“It is one hundred per cent reasonable to ask what the heck council is thinking, bringing forward an agreement on a new arena, talking about spending on other projects, all while reducing the budget by $60 million.

“But we have to continue doing our work as a city on multiple fronts. The big picture remains to continue to build a great community while maintaining our position as the best place in Canada to start and grow a business.”

Donna Spencer, The Canadian Press

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta’s chief medical officer of health, Dr. Deena Hinshaw, announced the province surpasses one million COVID-19 tests Friday. (Photo by Chris Schwarz/Government of Alberta)
COVID-19: Central zone active cases up by 100 in last 24 hours

Most central Alberta communities under province’s enhanced measures list

Sylvan Lake RCMP, Fire Department and Victim Services will be out on Dec. 5 for the annual Charity Check-stop. File Photo
Give Sylvan Lake RCMP the bird at Charity Check-stop

Sylvan Lake RCMP will be accepting frozen turkeys for the food bank during the charity check-stop

Ecole H.J. Cody School. File Photo
Sylvan Lake high school temporarily moves to online classes

Over the weekend, H.J. Cody reported six positive cases of COVID-19

.
Alberta confirmed more than 1,500 COVID-19 cases Sunday

Central zone active cases slightly up

Kyle Charles poses for a photo in Edmonton on Friday, Nov. 20, 2020. Marvel Entertainment, the biggest comic book publisher in the world, hired the 34-year-old First Nations illustrator as one of the artists involved in Marvel Voice: Indigenous Voices #1 in August. THE CANADIAN PRESS/Jason Franson
VIDEO: Indigenous illustrator of new Marvel comic hopes Aboriginal women feel inspired

Kyle Charles says Indigenous women around the world have reached out

Russ and Luanne Carl are sharing about their experiences of fighting COVID-19 this past summer.
photo submitted
Stettler couple opens up about COVID-19 battle

Luanne and Russ Carl urge others to bolster personal safety measures amidst ongoing pandemic

This 2019 photo provided by The ALS Association shows Pat Quinn. Quinn, a co-founder of the viral ice bucket challenge, died Sunday, Nov. 22, 2020, at the age of 37. (Scott Kauffman/The ALS Association via AP)
Co-founder of viral ALS Ice Bucket Challenge dies at 37

Pat Quinn was diagnosed with Lou Gehrig’s disease, also known as amyotrophic lateral sclerosis, in 2013

Minister of Justice and Attorney General of Canada David Lametti speaks with the media following party caucus in Ottawa, Tuesday, January 28, 2020. THE CANADIAN PRESS/Adrian Wyld
Exclusion of mental health as grounds for assisted death is likely temporary: Lametti

Senators also suggested the exclusion renders the bill unconstitutional

Claudio Mastronardi, Toronto branch manager at Carmichael Engineering, is photographed at the company’s offices in Mississauga, Ont., Thursday, Nov. 19, 2020. As indoor air quality becomes a major concern in places of business, HVAC companies are struggling to keep up with demand for high quality filtration systems. THE CANADIAN PRESS/Chris Young
Business is booming for HVAC companies as commercial buildings see pandemic upgrades

‘The demand right now is very high. People are putting their health and safety ahead of cost’

Prime Minister Justin Trudeau speak to the media about the COVID-19 virus outside Rideau Cottage in Ottawa, Friday, Nov. 20, 2020. THE CANADIAN PRESS/Adrian Wyld
Long-awaited federal rent subsidy program for businesses hurt by COVID-19 opens today

The new program will cover up to 65 per cent of rent or commercial mortgage interest

Traffic crosses over the Lions Gate Bridge from North Vancouver into Vancouver on July 2, 2015. Motorists would have to pay a fee to drive into downtown Vancouver under the city's plan to slow climate change but one expert warns it could pose financial hardship for some. THE CANADIAN PRESS/Darryl Dyck
Vancouver’s climate plan ‘first 10 steps in a journey of 10,000,’ says expert

Almost 40 per cent of Vancouver’s carbon pollution comes from vehicles

Alberta has 1,910 active cases of COVID-19 as of Wednesday. Red Deer is reporting five active cases, with 108 recovered. (File photo)
After COVID-related transplant delays, 16-year-old N.S. girl gets lung transplant

‘This is the difficult time now of seeing Tahlia in ICU hooked up to 15 IVs and sedated’

Most Read