New NHL arena in Calgary back on the table, tentative agreement struck

Click to play video: 'Jeff Davison released details of Calgary’s event centre agreement'
Jeff Davison released details of Calgary’s event centre agreement
WATCH: Calgary councillor Jeff Davison releases details of the deal for the new Calgary event centre on Monday. – Jul 22, 2019

Plans for a new arena in Calgary to replace the Saddledome are accelerating with a tentative agreement in place.

The city, the Calgary Flames and the Calgary Stampede, which owns the land, have agreed in principle to terms on an event centre that would be the new home of the city’s NHL team.

“All three parties have agreed to agree basically,” said Coun. Jeff Davison, who chairs an event centre committee.

The deal was to be presented to council behind closed doors Monday afternoon and then put to a vote on whether to make it public immediately.

Calgarians would then have a week to voice their opinion before a council vote next week to ratify the deal.

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The event centre has been estimated to cost between $550 million and $600 million.

“The estimated cost of the event centre is $550 million, which will be shared 50/50 between the city and CSEC (calgary Sports and Entertainment),” the City of Calgary said in a news release Monday night. “With its 50 per cent investment, the city will own 100 per cent of the event centre. CSEC will bear 100 per cent of the operating, maintenance and repair costs for the period of the 35-year agreement.

“The city will also receive a facility fee for the lifetime of the agreement and a portion of the event centre naming rights. In addition, value will be created for the city as a result of increased property tax revenue. Local amateur sports organizations will benefit from CSEC’s commitment to provide them with $75 million in added funding over 35 years. All of this ensures there will be a long-term, sustainable return on investment for the benefit of all Calgarians.”

WATCH: Mayor Naheed Nenshi commented on the potential agreement for a new Calgary event centre and home for the Calgary Flames on Monday.

Click to play video: 'Nenshi calls event centre agreement a ‘good deal for Calgary’'
Nenshi calls event centre agreement a ‘good deal for Calgary’
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The proposed site of the building is on land north of the Saddledome, which is almost 36 years old.

If the deal is approved, the earliest shovels will go in the ground is 2021, Davison said.

The vision for the venue is for it to be multi-purpose, with portions that can be sectioned off for art installations and concerts of different types, including Cirque du Soleil, as well as sports.

LISTEN: Moshe Lander joins Danielle Smith to discuss what an arena deal could mean for Calgary

With a capacity of roughly 20,000 for sports, the new building would be the heart of a larger revitalized commercial and residential district east of downtown.

“Our number one principle is public money must be spent for public benefit,” Mayor Naheed Nenshi said.

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“As long as what is presented to us today meets those criteria and principles then I think we’ll be able to have a very good conversation with the public over the next several days about whether this is something the public thinks makes sense.”

In a news release issued Monday night, the City of Calgary said “the agreement has been shaped by 14 months of review, analysis and consultation by the city’s Event Centre Assessment Committee, chaired by Councillor Jeff Davison.”

“The committee has determined the agreement meets the test of fitting the long-term goals of the City of Calgary and city council,” the news release said. “It is the culmination of years of discussion and negotiation between the city, CSEC and other partners. The project aligns with the city’s Rivers District Master Plan.”

In a news release Monday night, Calgary Sports and Entertainment president Ken King said “city building is a long and challenging process.”

“CSEC is proud to work with the city, Calgary Exhibition and Stampede and CMLC to build a lasting legacy and vibrant new district for the citizens of Calgary and all those who visit our city,” he said. “As an integral part of the Culture and Entertainment District the new event centre will be a point of pride for everyone.”

Negotiations between the city and the Flames broke off in 2017 when King called discussions “spectacularly unproductive.”

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The city re-started talks with CSEC, which also owns the WHL’s Hitmen, the CFL’s Stampeders and the NLL’s Roughnecks, late last year. The event centre is planned to become the new home of all three teams.

WATCH: Calgary Sport and Entertainment Corporation president Ken King reacts to a tentative deal for a new event centre that will be home to the NHL’s Calgary Flames.

Click to play video: 'CSEC president responds to tentative deal to build new home for Calgary Flames'
CSEC president responds to tentative deal to build new home for Calgary Flames

Before talks broke off, CSEC offered to put $275-million into a $500-million arena, and said the city should raise the remaining $225-million through a community revitalization levy.

A CRL allows the city to divert property taxes from new development that would theoretically spring up around a new arena into paying for it.

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The city had proposed a three-way split on the cost of a $555-million arena, with the city and the Flames each paying $185-million and the remaining third raised from a surcharge on tickets.

WATCH: Calgary Stampede CEO Warren Connell says a tentative agreement to build a new event centre supports his organization’s vision for the future of the grounds.

Click to play video: 'Calgary Stampede believes event centre deal supports its vision'
Calgary Stampede believes event centre deal supports its vision

The arena has re-emerged at a time when city council is trying to find $60 million in budget cuts.

“The optics stink,” Nenshi said. “They really stink, but I’m not one of those people who tries to massage or manage the public discussion so we can get the outcome we’re looking for.

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“If the deal is ready, the public deserves to know what’s in that deal.”

The event centre’s proposed location on the east side of the downtown came after an $890-million CalgaryNext project pitched by the Flames in 2015.

That concept included a hockey arena, football stadium and field house west of downtown.

Flames owners offered $200-million of their own money and proposed a $250-million loan be repaid through a ticket surcharge.

CalgaryNext was shelved when council determined remediating creosote-soaked soil on site would push the cost of the project well over a billion dollars.

A field house and an arena are on Calgary’s major capital projects priority list, but a football field to replace 59-year-old McMahon Stadium is not.

An $80-million renovation to McMahon was part of the Calgary 2026 proposal to host the Winter Games, but those plans died when Calgarians shot down bidding for the Olympic and Paralympic games in a plebiscite.

The city said Calgarians can share their views on the tentative deal during a seven-day public review period by calling their councillor or providing a written submission through the City Clerk’s Office. Comments received by 12 p.m. on July 26 will be included in the corporate record and distributed at the July 29 city council meeting where councillors will vote on the agreement.

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The Canadian Taxpayers Federation, which describes itself as a “non-partisan citizens’ advocacy group fighting for lower taxes, less waste and accountable government,” blasted Calgary City Council for allowing only a week of public consultation on the project following Monday’s announcement.

“Calgary councillors should be ashamed of themselves for trying to ram through a deal for the Flames behind closed doors before taking off for summer holidays,” Franco Terrazzano, the Alberta director for the CTF, said in a statement. “The transparency and consultation on the this project has been a failure.

“All of council saw the deal for the first time today and now the public only has one week to provide input. Why is the city in such a rush to push through this deal?”

“Calgary councillors appear ready to ram through a deal that would give hundreds of millions of dollars to the Flames owners and tomorrow they will be discussing budget cuts including cuts to emergency services,” Terrazzano added.

The deal also remains subject to customary approvals by CSEC and the Stampede.

For more details about the event centre, click here.

–With files from Global News’ Phil Heidenreich

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