What you need to know about the City of Calgary’s event centre agreements

Months after they were signed, the final agreements for Calgary’s event centre project are now public, with plans to begin construction on the building as soon as later this year.

The agreements between the City of Calgary, Flames owners’ Calgary Sports and Entertainment Corporation (CSEC), the Government of Alberta and the Calgary Stampede, were posted publicly for the first time on Thursday.

“Calgarians who review these agreements will see a lot of familiar information,” City of Calgary infrastructure services general manager Michael Thompson said in a statement. “Much of the information contained in these agreements was released in October 2023 with the announcement of final agreements.”

The agreements span across 16 different documents and more than 760 pages; some pages, especially around land agreements, are heavily redacted to “protect sensitive and proprietary information about the project’s partners.”

“When you’re financing a billion dollar project, you need to make sure that all of your I’s are dotted and all of your T’s are crossed,” Concordia University economist Moshe Lander told Global News. “It looks like it’s pretty standard fare.”

According to the documents, the event centre will be “LEED certified,” and is described as a “state-of-the-art entertainment and sports gathering place” for Calgarians.

Although designs have not yet been released, the agreement said the building will hold 18,000 seats, indoor and outdoor plazas, a community rink, as well as  include amenities and facilities similar to other NHL rinks in Edmonton, Detroit, Las Vegas, Columbus and St. Paul.

The agreement states the community rink must be available for the public between 4:30 p.m. and midnight on weekdays, and 6 a.m. and midnight on weekends. The hourly rental rate must also be 15 per cent less than the average rental rate charged to minor sports organizations in the Calgary.

The budgeted cost for the event centre building is $873.6 million, with the community rink’s total budget pegged at $52.6 million. Any spending above those amounts will be considered cost overruns which will require approval from an internal steering committee.

If the event centre building goes over budget, the documents state the additional costs must be split 50-50 by the City of Calgary and CSEC.

Seventy-five per cent of the first $7.2 million in cost overruns on the community rink will be covered by the city, with any further spending split evenly with CSEC.

There are also provisions in the agreement that aim to find savings elsewhere in the project to offset cost overruns before either side allocates more funding.

“It probably will go over budget,” Lander said. “It just means that the city and therefore, the taxpayers, are on the hook for half that amount. Is it better than being on the hook for 100 per cent? Yeah, I guess so.”

The City of Calgary, which will own the building, is putting up $537 million up front to build the event centre, parking, a plaza space and a quarter of the attached community rink. CSEC will pay $40 million up front and pay a $17-million annual lease payment to the city that will increase by one per cent over the next 35 years.

More than half of that annual lease payment will be through a 9.5 per cent franchise fee, or ticket tax, on tickets for all events in the new building.

The city’s share of the franchise fee will be capped at $10 million in the first year of the lease term, and will grow by the previous year’s amount plus one per cent annually over the term of the deal.

Peter Oliver, founder of Project Calgary, is critical of the franchise fee repayment in the agreement as it will be paid by citizens.

“A ticket tax isn’t paid by the Flames owners,” Oliver told Global News. “The ticket tax is paid by citizens who want to go see a concert or a hockey game at their arena.”

Licensing and revenue from naming rights of the new event centre will go to CSEC, but the city will have final approval of a partner.

The City of Calgary must also lead the work, in collaboration with the project’s partners and the Stampede, to create an event management plan for the area, according to a provision in the agreement.

The entire project is expected to cost $1.2 billion dollars, which includes improvements to the public realm around the event centre in the Rivers District, and general improvements to area transportation and infrastructure.

Those infrastructure improvements will be covered by $330 million in provincial funding, which is also expected to cover the demolition of the Saddledome and half of the cost of the community rink.

One of the six infrastructure improvement projects includes an underpass at 6 Street S.E., which is expected to be complete in 2027.

The city announced last month that enabling works have begun in the area to prepare for the incoming event centre building, including a relocation of 5 Street S.E. between 12 Avenue and 14 Avenue S.E. half a block east to make room for the 10 hectare building.

Ward 1 Coun. Sonya Sharp, who also chairs city council’s Event Centre Committee, said in a statement that she is glad the agreements are now public.

“I think it’s really valuable that everyone has the chance to understand the details of this project. Work is well underway, and Calgarians should expect to see enabling construction activity begin in the coming months. The next major milestone the public will see is obtaining permits,” Sharp said.

“2024 is going to be a big year for this project and for the area. I will be excited to see more details on the design, and I know many Calgarians will be too.”

According to the city, the project team is expecting to finalize a construction schedule in the coming months, which will include a design reveal, applications for development permits and ground-breaking on the project.

The city said the plan is to begin construction sometime in 2024. The agreement states the first day of CSEC’s lease on the new Event Centre is Sept. 1, 2026.

The agreements also mean the Flames must remain in Calgary for the duration of the 35-year lease.