Flames arena deal to come with lease rider

Article posted by Coliseum, June 14^th, 2023

Image: Scotiabank Saddledome, 5of7, CC BY-SA 2.0

A $1.2-billion deal to replace Calgary’s (Canada) aging Scotiabank Saddledome Arena with a new National Hockey League (NHL) arena would come with a 35-year lease that includes a commitment from the owners of the NHL team Calgary Flames to stay in the City, a City official informed.

‘CTV NEWS CALGARY’ stated that the City of Calgary, the Alberta Government, the Calgary Sports and Entertainment Corporation, and Calgary Stampede reached an agreement in principle in late April.

Calgary (Canada)-based the Calgary Sports and Entertainment Corporation is a privately-owned professional sports and entertainment company based in Calgary, Alberta, Canada, formed in 2012 and owned by N. Murray Edwards, Alvin Libin, Allan Markin, Jeffrey McCaig, Clay Riddell, and Byron Seaman.

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The Calgary Stampede is an annual rodeo, exhibition and festival held every July in Calgary, Alberta, Canada. The 10-day event, which bills itself as ‘The Greatest Outdoor Show on Earth’ attracts over one million visitors per year and features one of the world’s largest rodeos, a parade, midway, stage shows, concerts, agricultural competitions, chuckwagon racing, and First Nations exhibitions.

The 19,289-capacity Scotiabank Saddledome is a multiuse indoor arena in Calgary, Alberta, Canada. Located in Stampede Park in the Southeast end of downtown Calgary, the Saddledome was built in 1983 to replace the Stampede Corral as the home of the Calgary Flames of the National Hockey League (NHL), and to host ice hockey and figure skating at the 1988 Winter Olympics.

The Calgary Flames are a professional ice hockey team based in Calgary. The Flames compete in the National Hockey League (NHL) as a member of the Pacific Division in the Western Conference, and are the third major professional ice hockey team to represent the City of Calgary, following the Calgary Tigers (1921-1927) and Calgary Cowboys (1975-1977). The Scotiabank Saddledome serves as their home arena.

‘CTV NEWS CALGARY’ further stated that the $1.2-billion price tag for the event center project includes $800 million for the new arena in addition to parking, transit improvements, a new community rink, and an enclosed plaza.

The Council’s event center committee met recently to receive a public presentation from the City administration on the project and ask some of the questions that have come up since it were announced.

Michael Thompson, General Manager of Infrastructure Services, City of Calgary, said the City continues to negotiate the final agreement and hopes to have it complete by the end of Summer. He told the committee – “The parties have agreed to the major terms: The scope of what’s being built, the estimated costs and the financial contributions.”

The City, he said, would contribute about $515 million from its reserves and another $360 million from its working capital toward a long-term lease with the Calgary Sport and Entertainment Corporation.

Thompson said the Calgary Sport and Entertainment Corporation would pay $40 million upfront. It would then pay $17 million annually in lease payments, increasing by one percent each year, for another $708 million over the 35 years.

The City will also sell off five parcels of land in the area, with the Calgary Sport and Entertainment Corporation having the first opportunity to bid on them.

Calgary’s Chamber of Commerce says it supports the deal and believes the City Council will get it done.

Said Deborah Yedlin, President, Calgary Chamber of Commerce, “There’s a sense of commitment to redevelop those lands. There’s opportunity, from a hotel standpoint, to really capitalize on the visitor economy that is, you know, really getting a lift from the expansion of the BMO Centre (convention center in Calgary).”

Councilor Andre Chabot said there are concerns from some Calgarians that a lease could be terminated – “I know there are other provisions in that agreement that we can’t maybe reveal at this point, but it’s a question of certainty from our perspective and risk aversion.”

Thompson agreed it’s important for the City to consider its risk -“We’ve got a commitment from the Calgary Sports and Entertainment Corporation that they will be staying in Calgary for 35 years as part of this agreement.”

One sports economist at the Concordia University in Wisconsin (US) says the new details prove the deal is not as beneficial for the City as it is for the Flames.

Maintained Moshe Lander, “It was never a good deal for the City. The only thing the City knew was that they had to replace the arena. But once you know that you have to replace the arena, the leverage shifts to the ownership group. They basically held the City over a barrel and now we’re seeing the results.”

The Alberta Government is not contributing directly to the arena but has said it plans to fund up to $300 million on public transit and road improvements, site utilities, reclamation, and other supportive infrastructure as part of the deal.

The province would also contribute $30 million to cover half the cost of the 1,000-seat community rink if its share is approved by the provincial Cabinet and the Treasury Board before the end of Summer.

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