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Calgary city council approves new arena deal

Click to play video 'Calgary approves deal to build a new event centre' Calgary approves deal to build a new event centre
WATCH: Calgary City Council has agreed to a proposal to build a new event centre with support from the Calgary Sport and Entertainment Corporation and Calgary Stampede. Carolyn Kury De Castillo has the details.

Calgary is going to build a new arena for its NHL team.

Council voted 11-4 on Tuesday approving a financial agreement to build an event centre, which will be the new home of the Calgary Flames and replace the 36-year-old Saddledome.

The city and Flames owner Calgary Sports and Entertainment announced last week a tentative agreement that would equally split the cost of a $550-million sports and entertainment centre.

WATCH: President and CEO of the Calgary Sport and Entertainment Corporation, Ken King spoke to media following the approval of a deal to build a new arena for the Calgary Flames.

Click to play video '‘The real work starts now’: Ken King on Calgary arena plan approval' ‘The real work starts now’: Ken King on Calgary arena plan approval
‘The real work starts now’: Ken King on Calgary arena plan approval

READ MORE: Calgarians have until end of Monday to give opinions on proposed arena deal

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Talks broke off two years ago when the arena became a fractious civic election issue. Mayor Naheed Nenshi voted in favour of the deal Tuesday.

“I think the public is split,” the mayor said just prior to the vote.

“In times when the public is split… and in times when the public is split, elected officials have to look at everything, in which public input is one aspect, and make the decision they think is right for the community and we do that every day.”

WATCH: Calgary Stampede CEO Warren Connell reacts to an agreement to build a new event centre to be used for Stampede events.

Click to play video '‘A great day for Calgary’: Calgary Stampede CEO on arena deal' ‘A great day for Calgary’: Calgary Stampede CEO on arena deal
‘A great day for Calgary’: Calgary Stampede CEO on arena deal

The agreement is for 35 years, which keeps the Flames in Calgary for that term, with options to extend it.

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Coun. Jeff Davison, who headed an events centre committee, has said the earliest shovels would go in the ground if the deal was approved is 2021.

WATCH: Calgary mayor Naheed Nenshi speaks to media following the approval of a new arena in Victoria Park.

Click to play video 'Nenshi talks to media following arena approval' Nenshi talks to media following arena approval
Nenshi talks to media following arena approval

The city vows municipal property taxes will not increase to pay for the event centre.

In the agreement unveiled last week, the city says the projected return to Calgarians is $400.3 million over the course of the 35-year agreement with the Flames.

WATCH: Global’s Joel Senick is joined by University of Calgary economics professor Trevor Tombe and entrepreneur and Nashville Predators owner Brett Wilson to discuss Calgary’s deal for a new event centre.

Click to play video 'Economist and entrepreneur discuss Calgary’s arena deal' Economist and entrepreneur discuss Calgary’s arena deal
Economist and entrepreneur discuss Calgary’s arena deal

That figure incorporates revenues from ticket sales, a portion of naming rights, retail property taxes in the building, CSEC donations to amateur sports programming and tax generation in the district where it will be built.

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But a net loss of $47 million over the 35 years on the project is also projected.

WATCH: Mount Royal University political scientist Duane Bratt joins Joel Senick to discuss Calgary’s approval of building of a new NHL arena.

Click to play video '‘It ends a four-year saga’: Calgary political scientist weighs in on arena decision' ‘It ends a four-year saga’: Calgary political scientist weighs in on arena decision
‘It ends a four-year saga’: Calgary political scientist weighs in on arena decision

“The critical question we have to ask ourselves, are the thing we can’t count, the intangible benefits _ and every economist agrees there are intangible benefits to this kind of thing — are those intangible benefits worth $47 million in today’s money for over a 35-year period? I am satisfied that they are,” the mayor said.

“Think about this spring. I was a very early convert to (Toronto) Raptors fever. You think about the economic activity in the bars and restaurants … you think about the community spirit, you think about what it means for people getting together.

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“These things actually do have a value. It’s just not a value you can quantify. Economists agree that is a value that means something to the city.”

WATCH: Calgary City Council votes in favour of a new event centre that will be also become the new home rink for the NHL’s Calgary Flames.

Click to play video 'Calgary city council votes ‘yes’ to new home for the Flames' Calgary city council votes ‘yes’ to new home for the Flames
Calgary city council votes ‘yes’ to new home for the Flames

READ MORE: At least 1 city councillor plans to reject Calgary arena deal

The arena is part of a revitalization plan for the east side of downtown near the Stampede grounds.

CSEC is putting up the same amount of up-front cash it was prepared to give two years ago — $275 million.

WATCH: Mayor Naheed Nenshi sits down to chat Calgary event centre deal

Click to play video 'Mayor Naheed Nenshi sits down to chat Calgary event centre deal' Mayor Naheed Nenshi sits down to chat Calgary event centre deal
Mayor Naheed Nenshi sits down to chat Calgary event centre deal

One major difference in the current deal is the Flames will not pay property tax as the city proposed two years ago. The city would own the building.

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A rendering of the Calgary skyline without the Saddledome.
A rendering of the Calgary skyline without the Saddledome. Cody Coates/Global News

CSEC, which also owns the WHL’s Hitmen, CFL’s Stampeders and NLL’s Roughnecks, initially didn’t want to give the city any ticket revenue.

The corporation has agreed to hand over 2 per cent from every ticket sold to the city as a facility fee, capped at $3 million annually for the first five years and estimated to bring in $155.1 million over 35 years.

All revenues generated by the event centre go to CSEC, minus its commitment to the city and the sharing of parking revenues with the Calgary Stampede board which is a third party in the agreement.

READ MORE: By the numbers: How does Calgary’s proposed new arena stack up against other NHL rinks

The Flames would be responsible for the operation, maintenance and day-to-day repairs of the event centre.

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CSEC has committed to upping its contribution to local sport groups, which the city states amounts to $75 million over the course of the 35-year term.

Calgary follows other large prairie cities investing in sports infrastructure over the last 15 years.

Winnipeg’s new football stadium opened in 2013 and the downtown arena completed in 2004 is the home of the NHL’s Jets who returned in 2011.

The Edmonton Oilers moved into Rogers Place in 2016. Another edition of Mosaic Stadium opened in Regina a 2017 for the CFL’s Roughriders.