Flames out of arena deal: Calgary mayor – Calgary


More than a year after an agreement was signed on the new Calgary Event Centre and arena, Mayor Jyoti Gondek said the Calgary Flames ownership group, the Calgary Sports and Entertainment Corporation (CSEC), intends to “pull the plug” on the deal.

The mayor said for one party to walk away over 1.5 per cent of the deal was “staggering.”

“Today, I spoke with Murray Edwards, primary shareholder of Calgary Sports & Entertainment Corp (CSEC), about the future of the Event Centre project,” Gondek tweeted late Tuesday. “He informed me of the Flames intention to pull the plug on the Event Centre deal.”

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Describing the conversation as “very professional and straightforward,” Gondek said Murray tried to get the ownership group to “keep moving forward” on the arena deal.

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“There was additional funding that had to be taken on by Calgary Sports and Entertainment Corporation,” Gondek said Tuesday evening. “It appears that they’re unable to make that financial commitment following the approval of their development permit, so it would appear that they are ending the deal.”

In 2019, both the city and CSEC signed the $550 million deal, splitting the costs evenly. The city agreed to pitch in $22.4 million for costs of demolishing the Saddledome and land reclamation.

As part of the deal, a split of additional construction costs was allowed to a maximum of $25 million. CSEC would be responsible for cost overruns above that cap.

Negotiations in July resulted in Calgary Municipal Land Corporation being removed as the development manager, and according to Gondek the city added $10 million in event management costs.

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Gondek said since her election in October, her office and city officials have been working with Flames ownership to mitigate additional costs, including two that were identified: $4 million in climate mitigation – including solar cells as part of the development permit process – and $12.1 million for road and sidewalk issues.

“The city came to the table to assist with $6.4 million in roadways leaving $9.7 million for the Flames,” Gondek tweeted “Based on this gap, CSEC informed me they are walking away from our deal.”

The mayor acknowledged any construction project can be subject to a variety of factors, adding the city has seen cost overruns based on pandemic-related inflation and supply chain complications.

“I’m not exactly sure what is driving their position, but I can tell you that we have done our best to be accommodating and unfortunately, they’re unable to proceed at this time.”

Global News has reached out to CSEC for comment but hasn’t heard back from the organization at the time of this publication.

Mayor Gondek expects in the coming days more information will be revealed.

“I’m very interested in seeing what happens next. I can only give you a snapshot in time. We were quite surprised by this.”

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© 2021 Global News, a division of Corus Entertainment Inc.

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