Calgary city council approves confidential change to arena deal with Flames ownership

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WATCH: The project to build the replacement for Calgary's Saddledome is still on pause and may be delayed further as city councillors have voted in favour of reconsidering a part of the deal signed with Flames ownership. Adam MacVicar reports. – Jun 24, 2021

City council has approved changes to certain aspects of the deal with the Calgary Flames ownership to build the new events centre, but details on exact changes have not yet been publicly released.

The arena project has been paused since April as both the City of Calgary and the Calgary Sports and Entertainment Corporation worked through a “difference” in the budget estimates compared to the arena that was designed.

Read more: Work paused on new Calgary arena over estimate, program requirements concerns

Sources told Global News at the time of the pause that Calgary Sports and Entertainment Corporation had requested more land for the project, and the removal of the Calgary Municipal Land Corporation as project manager. Global News also learned the budget difference was around $70 million.

In a closed door session on Tuesday evening, city council discussed the changes and emerged with several confidential recommendations.

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One of the items approved was a reconsideration of the previously agreed upon $550-million arena deal that was signed in 2019.

It required 10 votes in favour and council voted to approve the reconsideration 11-3, with councillors Druh Farrell, Jeromy Farkas and Jyoti Gondek opposed.

According to Mayor Naheed Nenshi, the part of the agreement up for reconsideration isn’t a monetary issue, but there have been some cost escalations.

“Given the materials cost, construction escalation, given some small changes to the program for the events centre, the costs have gone up,” Nenshi said. “Ultimately, we’ve got to figure out what we want to build here while staying in the context of the previous agreement that the city had made.  It’s not about the city pouring in a lot more money.”

Construction on the project was set to begin in August with a completion date in 2024, which Nenshi said will likely be delayed.

Ward 11 Councillor and mayoral candidate Jeromy Farkas is calling for the information discussed behind closed doors to be made public as the agreement includes $275 million of public money to fund the Saddledome’s replacement.

Farkas said he believes the “secrecy” around the arena deal is undermining support for the project.

“Sure, council can get their advice, they can do their negotiating behind closed doors,” Farkas said. “But once a decision is made, and to be crystal clear a decision has been made in council’s secret meeting this week, the public deserves to know what that decision was.”

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Nenshi confirmed that when an agreement is reached, there would be a public debate amongst councillors, which could happen as soon as the combined meeting of council on July 5.

Calgary Municipal Land Corporation, the city-owned agency in charge of the arena, said it didn’t have any additional information to share about the project on Thursday.

“CMLC isn’t part of the negotiations, as those are held between the two partners, but we are supporting both in this process and finding the best path forward,” CMLC spokesperson Clare LePan said in a statement to Global News.

LePan added that the project will stay paused with further information on its status being shared at the “appropriate time.”

Read more: Public engagement report released for Calgary’s new event centre

A change to the agreement between the city and CSEC isn’t surprising for Concordia Univeristy economics professor Moshe Lander.

In an interview with Global News, Lander said it isn’t uncommon for large projects with public funding to undergo renegotiations and delays.

“This is not at all surprising, it’s completely predictable,” Lander said. “The idea of cost overruns, renegotiations, conflicts of interest between the various parties that have stakes in the new arena deal — that’s common throughout many cities.”

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Nenshi said he is still adhering to the terms of the agreement signed in 2019, but said the biggest factor for him is “public money must have public benefit.”

–With files from Global News’ Adam Toy 

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