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Realtor Kamil Lalji near the Saddledome, in Calgary, on Oct. 27.Todd Korol/The Globe and Mail

For more than seven decades, the east end of Calgary’s Beltline, also known as East Victoria Park, has been waiting for its renaissance. Building a new arena for the Calgary Flames could do just that, at least on paper.

On Oct. 5, the city council finalized the city’s agreement to move forward with the construction of a new arena, replacing the 40-year-old Saddledome.

With an expected cost of $1.2-billion, this development has brought renewed hope and a reason to believe that the latest vision for East Victoria Park, now rebranded as Calgary’s Culture and Entertainment District, is one step closer to its realization.

Bounded by the Elbow River, Stampede Park, and the CP and LRT tracks, the Culture and Entertainment District is home to the Saddledome and BMO Centre. But despite the growing number of visitors this area receives each year, efforts to revitalize it have been slow to materialize.

The latest attempt to redevelop the area launched in 2018, when Calgary Municipal Land Corporation (CMLC), a wholly owned subsidiary of the City of Calgary, unveiled the Rivers District Master Plan, a detailed road map of how the Culture and Entertainment District’s 286 acres should evolve to accommodate 8,000 residents and 3 million visitors in a dense, mixed-use neighbourhood.

“The ambition of this master-planned area was to look at how we can really catalyze new development in the area to see the build-out of underutilized land,” says Kate Thompson, president and CEO of CMLC. “As we saw in East Village, the public investment being made in the area attracts the attention of private industry … so in [East] Victoria Park we’re taking the same approach.”

For Ms. Thompson, the expected completion of three milestone projects in 2024, including the BMO Centre expansion, 17th Avenue extension, and the Victoria Park/Stampede C-train station rebuild, compounded with the construction of a new arena, is key to the success of the Culture and Entertainment District.

“We’re seeing interest piqued now that major projects are under way, and it’s giving investors and developers confidence that they need to look into the area again,” Ms. Thompson says. “Developers crave certainty, and that’s basically the biggest success of the addition of the arena moving forward. It provides certainty for developers across Canada.”

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Renderings of Calgary's planned Culture and Entertainment District surrounding a new arena.Calgary Municipal Land Corporation

Indeed, according to Ray Wong, vice-president of data operations at Altus Group, public investment on large projects like the new arena and the convention centre, alongside upgrades to complementary infrastructure, boost Calgary’s attractiveness – as well as property values.

“In theory, if you reinvigorate a certain area, and generate increased demand for a location, there’s spillover effects for neighbouring properties and values,” he says, pointing at the effects Rogers Place has had on Edmonton’s Ice District. “They’ve definitely improved that area with respect to increased retail and residential, but I think it’s taking a little bit more time than they had anticipated.”

Despite the initial hype created by Rogers Place, and $4.7-billion invested in redeveloping Edmonton’s downtown, the area is suffering from the same woes as any other city in North America, including Calgary.

As office and retail vacancies in downtown Edmonton remain elevated, the value of commercial buildings in the city’s core is dropping.

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Evidence shows that the economic benefits of new sports venues have more limits than boosters claim.Calgary Municipal Land Corporation

Since the completion of the Edmonton Oilers’ arena in 2016, the assessed value of commercial properties has decreased by nearly 40 per cent, according to the city’s latest tax assessment.

This situation is delaying the construction of commercial projects in the area. Recently, Ice District Properties paused the development of a 16-storey office tower in downtown Edmonton.

Such an outcome, however, shouldn’t be unexpected. Evidence shows that the economic benefits of new sports venues have more limits than boosters claim.

“What we see is that there is really very little in the form of job growth and income creation,” says Dennis Coates, an economics professor at the University of Maryland, about new arenas. But politicians perceive this to be a better outcome than the prospect of losing their city’s team.

For this reason, cities across North America fund new arenas based on “the claim that there are benefits that occur as a consequence of having a professional sports team, and the implied threat of a team leaving.”

However, there is one promise new sports venues in central locations seem more likely to deliver: a rise in the value of residential properties located within five kilometres of the facility – and downtown Edmonton is no exception.

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While Calgary’s new arena could accelerate redevelopment, the future of this area will be ultimately determined by the number of people willing to live there full-time.Calgary Municipal Land Corporation

Burgeoning redevelopment between 2016 and 2023 has caused the assessed value of residential properties in the area to increase by over 10 per cent, despite a dwindling population.

Over the past seven years, more than 1,525 apartments have been built in the area, and there are 1,471 more currently under construction across four projects, including Pangman’s The Parks and Qualico’s Station Lands.

While Calgary’s new arena could have a similar effect on the Culture and Entertainment District and accelerate redevelopment, the future of this area will be ultimately determined by the number of people willing to live there full-time.

To ensure the spillover effects of Calgary’s new arena materialize, investment in complementary amenities that serve full-time residents, not just visitors, is essential, says Mr. Wong of Altus Group. “Ideally, you want people to live there year-round, rather than transitory people, and Airbnb and so on.”

The City of Calgary’s contribution to the arena deal includes the construction of car and pedestrian infrastructure to improve the connection between the new facility to its surroundings, as well as new and upgraded utilities. Public realm improvements brought forward by the Rivers District Master Plan, such as the second phase of the RiverWalk and 12th Avenue Promenade, are yet to be funded.

Kamil Lalji, a local realtor and investor, is brokering one of the three parcels currently listed in the vicinity of the Culture and Entertainment District. a 7,003-square-foot site on 14th Ave, zoned for multifamily high-rise – and he is bullish about the area’s future.

“One of the main principles of real estate development is buying and developing land in the path of other bigger developments,” he says.

But until further improvements to the area are realized, Mr. Lalji believes developers are more likely to buy and hold land than redevelop it. “It’s kind of wait until everything is done, and then really capitalize on the increase in value.”

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