Calgary’s events centre project is moving forward after a pause since April due to cost overruns and design concerns.
On Wednesday, city councillors voted in favour of several changes to the deal between the City of Calgary and the Calgary Sports and Entertainment Corporation to allow for the project to continue.
“Much to my own surprise, all the hard work from the team has actually gotten a better deal for Calgarians,” Mayor Naheed Nenshi said following the vote.
The events centre is now pegged to cost $608.5 million, up from the $550 million originally laid out in the previous deal signed in 2019.
At one point in January 2021, the cost of the design had ballooned to $620 million.
In an effort to cover the funding gap, a clause in the previous agreement was triggered that forced both the city and CSEC to each put an additional $12.5 million into the project to bring the total contribution to $575 million.
“We were pretty comfortable with a $575-million facility, but our partners weren’t comfortable with that,” city manager David Duckworth told council. “They did not want to build a facility of $575 million because in their mind there were fundamental pieces that were missing.”
Council learned the events centre will seat 18,300 people.
According to city administration, CSEC has committed to covering the risk of all cost overruns moving forward, and will now contribute $321 million to the project.
“Our partners on the other side … have actually come very far to ensure that we’ll get a good building built, and they will be responsible for all cost overruns beyond that,” Nenshi said. “That’s a very big deal, it really reduces the risk for Calgarians.”
Council voted on the budget framework to cap the city’s contribution at $287.5 million, but there will be more costs incurred by the city off the arena site.
Councillors voted to approve up to $10 million for flood mitigation in the area, although city administration said costs for that work are believed to be closer to $5.4 million.
The revised agreement also means the city will need to develop a mobility and events management plan for the Rivers District to help deal with the amount of traffic before and after events in the area.
The city and CSEC will also split any incremental costs of that plan, anything above the $200,000 that is spent annually, down the middle.
With costs from the previous agreement, like the $12.4 million to demolish the Saddledome and $3 million in remediation costs, the total contribution for the city now sits at $312.9 million.
“Now is not the time to walk back on our commitments. Now is the time to stick to our guns as we lead a massive recovery, one that we have been staging here in Calgary for many months together,” Ward 6 city councillor and mayoral candidate Jeff Davison said. “We have begun one of the greatest comeback stories in our city’s history.”
As part of the changes to the deal, the Calgary Municipal Land Corporation, a city-owned agency, has been removed as project manager.
According to administration, CSEC will now act as development manager, which was approved by council.
Ward 3 city councillor and mayoral candidate Jyoti Gondek originally voted in favour of the arena deal in 2019, but voted against all seven recommendations in front of council on Wednesday.
“It’s my faith in CMLC that led me to vote yes at that time, I knew they would deliver something that was incredible in terms of placemaking, I knew they would steward a project that had public benefits,” Gondek told council. “With their leadership removed from this project, I can’t support it anymore.”
In a statement released Wednesday evening, CSEC’s president and CEO John Bean thanked Calgarians for their patience as both sides of the deal worked through the revised agreement.
“Calgary Sports and Entertainment Corporation is pleased with council’s endorsement today in support of amendments to this priority project for our City,” Bean said. “Following a fulsome review, this collaborative effort of partners has resulted in a revised agreement which will provide a vital community resource for decades to come.”
A development application for the events centre is expected to be submitted by Aug. 3, as project officials said the plan has shovels in the ground by early 2022.
Tickets for non-sporting events and concerts in the new events centre will include an increased fee.
According to a section omitted from a council report obtained by Global News, CSEC has boosted the facility fee on each ticket from eight to nine-point-five per cent.
The report said the increase would not raise the city’s portion of the facility fee and was approved by the city manager. The move did not require council approval, but will help CSEC recover a portion of its contribution to the events centre build.
“I’m fine with it because I’ve always been been a proponent of user pay on this project,” Nenshi said. “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 other U.S. cities.”
Although ticket fees are typical with similar projects, Ward 11 councillor and mayoral candidate Jeromy Farkas said he’d like to see the city have the ability to increase their portion of the facility fee as well.
“This is a business deal that we’re talking about, and I believe that, frankly, this council got out-negotiated,” Farkas said. “It makes zero sense that we would allow the Flames to make back their money faster whereas city taxpayers would not have that right.”