Calgary is going to build a new arena for its NHL team.
Council voted 11-4 on Tuesday approving a financial agreement to build an event centre, which will be the new home of the Calgary Flames and replace the 36-year-old Saddledome.
The city and Flames owner Calgary Sports and Entertainment announced last week a tentative agreement that would equally split the cost of a $550-million sports and entertainment centre.
Talks broke off two years ago when the arena became a fractious civic election issue. Mayor Naheed Nenshi voted in favour of the deal Tuesday.
“I think the public is split,” the mayor said just prior to the vote.
“In times when the public is split … and in times when the public is split, elected officials have to look at everything, in which public input is one aspect, and make the decision they think is right for the community and we do that every day.”
The agreement is for 35 years, which keeps the Flames in Calgary for that term, with options to extend it.
Councillor Jeff Davison, who headed an events centre committee, has said the earliest shovels would go in the ground if the deal was approved is 2021.
The city vows municipal property taxes will not increase to pay for the event centre.
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 net loss of $47-million over the 35 years on the project is also projected.
“The critical question we have to ask ourselves, are the thing we can’t count, the intangible benefits – and every economist agrees there are intangible benefits to this kind of thing – are those intangible benefits worth $47-million in today’s money for over a 35-year period? I am satisfied that they are,” the mayor said.
“Think about this spring. I was a very early convert to [Toronto] Raptors fever. You think about the economic activity in the bars and restaurants … you think about the community spirit, you think about what it means for people getting together.
“These things actually do have a value. It’s just not a value you can quantify. Economists agree that is a value that means something to the city.”
The arena is part of a revitalization plan for the east side of downtown near the Stampede grounds.
CSEC is putting up the same amount of upfront 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 which is a third party in the agreement.
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.
Calgary follows other large prairie cities investing in sports infrastructure over the past 15 years.
Winnipeg’s new football stadium opened in 2013 and the downtown arena completed in 2004 is the home of the NHL’s Jets who returned in 2011.
The Edmonton Oilers moved into Rogers Place in 2016. Another edition of Mosaic Stadium opened in Regina a 2017 for the CFL’s Roughriders.
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