Flames won’t pay for rising costs of new arena
CALGARY — A new home for the NHL’s Calgary Flames hit the ditch, again, over money and risk.
The deal didn’t fall apart over the city demanding the Flames share in the cost of solar power and additional road and sidewalk work, but it was the tipping point for Calgary Sports and Entertainment Corporation to pull out of an the agreement the two sides reached over two years ago.
“There was a deal to be had here,” CSEC president and chief executive officer John Bean told reporters Wednesday during a video news conference. “We can’t get it across the line. So it’s frustrating, it’s hollow, it’s disappointing.”
The city and the Flames agreed on an arena deal more than two years ago with the initial estimate of $550 million split between the two. Shovels were scheduled to hit the ground in 2022 for a 19,000-seat arena and concert venue replacing the Saddledome, which has been the home of the Flames for 38 years.
The cost estimate for the project has risen to $634 million, however. Bean says not only would CSEC’s share be $346.5 million compared with the city’s $287.5 million, but the Flames also bear the risk of rising costs in the future.
Since the two sides agreed to an amended deal in July, the city added an additional $19 million in roadwork and climate mitigation to the project, and wants the Flames to pay for $10 million of that.
Bean says the extra, accumulated $81 million CSEC would incur represents a 30 per cent increase on the team’s original financial commitment, plus the team is on the hook for increased costs in the future.
“While CSEC was prepared to move forward in the face of escalating construction costs, and assume the unknown future construction cost risk, CSEC was not prepared to fund the infrastructure and climate costs that were introduced by the city following our July agreement … and are not included in the current cost estimate of $634 million,” Bean said.
“No one makes a decision this large on one particular data point. It’s an accumulation of issues. It came to a point where you kind of tap out and go ‘OK, it’s a little too risky.’ ”
He wouldn’t say what the city must do to return to the negotiation table — “It’s not our style to negotiate in public” — and said the Flames will remain in the Saddledome, which is the second oldest NHL arena behind New York’s Madison Square Garden.
CSEC, which also owns the WHLs Hitmen, CFL’s Stampeders and NLL’s Roughnecks, is at arena loggerheads with the city headed by a new mayor and council elected in October.