Calgary’s new arena has travelled a long, winding road at City Hall – but the finish line is in sight

If you’ve lived in the Calgary area or followed Calgary news, you’ve probably been hearing about the need for a new home for the Calgary Flames for literally decades. If you’re a fan of the team, or even just an onlooker who’s been casually following the story, you’re probably fairly relieved that there’s an arena deal in place, the contracts are all executed, and that work on the arena site could start soon after the 2024 Calgary Stampede.

Now, imagine you’re working for the City and have been dealing with this file, on and off, for the better part of two decades. Especially over the past decade, it’s been… a lot.

Two decades of history summarized

Following the 2004-05 lockout, Flames president and CEO Ken King’s attention turned towards pondering a potential new arena for the Flames. His work on the file kicked into high gear following the June 2013 flood that saw the majority of the Saddledome’s lower bowl underwater. (By that point the Flames owned more than just the Flames and had formally reorganized into the Calgary Sports and Entertainment Corporation, or CSEC.)

Seeking to find new homes for the Flames and the CFL’s Stampeders, two CSEC-owned teams playing in aging facilities, King pitched CalgaryNEXT in August 2015. The proposal was for a combined arena and field house to be located in downtown’s West Village, with an estimated $890 million price tag. While conceptually promising, an examination by City administration released in April 2016 concluded that the actual price tag, when factoring in land remediation of past creosote contamination and necessary infrastructure upgrades to the area, was somewhere between $1.753-1.827 billion. The report concluded “the CalgaryNEXT concept is not feasible in its present form or location.”

The conversation eventually turned towards “the Victoria Park option,” placing the new arena in Stampede Park as part of a long-awaited broader revamp of the area. In April 2017, City Council endorsed that option and instructed the Calgary Municipal Land Corporation (CMLC) to include an arena in Rivers District planning. When then-mayor Naheed Nenshi unveiled his re-election platform in September 2017, it included discussion of having an arena as part of an entertainment district. King responded by publicly declaring negotiations over days after Nenshi’s announcement.

Current mayor Jyoti Gondek joined council during the October 2017 election, being elected as councillor for Ward 3. In May 2018, council voted to create an Event Centre Assessment Committee to create a policy framework under which potential future negotiations could occur. Talks did eventually start up again between the City and the Flames, and a tentative deal was announced in July 2019 and ratified by a council vote a week later by an 11-4 margin. The finances of the deal were slightly adjusted in July 2021, albeit utilizing funds already earmarked as contingency in the original deal, by a 9-5 council vote.

Gondek was elected mayor in October 2021. Just prior to Christmas that year, Gondek posted on social media that the Flames were “pulling the plug” on the deal, citing cost escalations. (The Flames confirmed this the following day.) The deal officially lapsed on Dec. 31, with a budget confirmation deadline passing – for context, this was in the middle of the pandemic, construction costs had sky-rocketed and the precise budget impacts were then unclear. During the first meeting of 2022, council voted to keep exploring their options and to re-start the Event Centre Committee. On Apr. 25, 2023 – about a year after the first new committee meeting – a new arena deal was ratified by a unanimous council vote.

The 2023 edition of the deal includes an arena, a community rink, indoor and outdoor plazas, as well as upgrades to the area, most notably transportation infrastructure. The deal’s drawn criticisms for its sheer size – the price tag is $1.223 billion, including the infrastructure tie-ins – and the amount of up-front cash the City’s responsible for. The majority of the Flames’ contributions are via their lease payments to the City over 35 years, while the City is fronting approximately $853.3 million.

Catching up with the mayor

During a break in the marathon public hearings earlier this month, we spent a bit of time with Mayor Gondek to discuss the excitement for the progress being made in the culture and entertainment district, the importance of getting such a district built, and the balancing act behind investing such a large amount of public funds in something like an arena.

As we’ve discussed elsewhere, 2024 is a pretty big year for Stampede Park area. In addition to the impending design reveals for the arena – and a potential groundbreaking – we’ll see the BMO Centre expansion, 17th Avenue extension and Victoria Park C-Train station opening. There’s a lot of excitement about things (finally) moving forward for the arena project after being in the works for so long.

“I think the thing that’s the most important here is this is a major piece of this district,” said Gondek. “And for the amount of investment that we’ve put into East Village, and this whole district, this is an important component, and to know that it’s moving forward is incredibly rewarding for all the folks who have worked so hard to make sure that the Community Revitalization Levy actually realizes what it was supposed to. So when you consider that we’ve got a brand new convention centre expansion, we’re going to have a new event centre, this really bodes well for Calgary.”

If you’ve paid attention to the discourse from City Hall regarding the arena, much of the discussion has conceptualized the project as part of a broader district. The Saddledome was built with a lot of optimism in the 1980s about what could grow around it – and it served its purpose well as a host for sports and concerts – but it’s largely remained an arena surrounding by a parking moat. Gondek shared that visitors from other jurisdictions often remarked upon the potential of having so much space to develop.

“We have all this incredible space where we can be bringing people together and doing some incredible things that was just sitting there and being wasted,” said Gondek. “So now that we’ve got a vision, and it includes multiple ways for people to get in and out of this place, let’s get on with the business of creating this important district in our city.”

The amount of public funds being committed to the arena project – even with the lease payments paying the City back for some of its contributions – is pretty substantial, and money being used on this project are funds that can’t be used elsewhere. As one of 15 voters on council that approved the proposal, we asked the mayor about the balancing act of rationalizing the funding.

“I think that’s the most important part of being a member of council,” said Gondek. “You serve the entire city. And it’s important to understand where you’re making your investments and how they’re going to benefit the city overall. And when I look at what we’re able to achieve in the culture and entertainment district as a result of having this important piece come forward, it elevates the property taxes that will be derived from this district. And in a few years, when that Community Revitalization Levy lifts, those property taxes flow out to all parts of the city. So the uplift that’s available is going to help all areas of the city get more parks, get more improvements in their mobility networks. We’ve got to look at the long game here, and I think that’s sometimes the thing people struggle with. When you make decisions on council, you have to be looking at the interests of the city overall for its future.”

For those who aren’t familiar, the Rivers District uses a Community Revitalization Levy (otherwise known as “Tax Increment Financing”) to fund infrastructure improvements in an effort to attract private investment to the area, which includes the East Village, the east side of downtown, the east end of the Beltline region, and Stampede Park. The way it works is by freezing property taxes paid to the City and Province at 2007 levels, and using incremental tax revenue in the Rivers District above 2007 levels to fund area improvements. (Originally set for a 20-year term, it was extended a few years ago and now ends in 2047.)

This video from WBEZ in Chicago explains how TIF works in more detail. It’s about the American context, but this is pretty much how Calgary’s works, albeit with a few differences here and there.