Mayor Gondek, CSEC address Calgary arena deal collapse in back-to-back press conferences

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Calgary Mayor Jyoti Gondek, left, and CSEC CEO John Bean, right. (Mike Symington, Audrey Neveu/CBC - image credit)
Calgary Mayor Jyoti Gondek, left, and CSEC CEO John Bean, right. (Mike Symington, Audrey Neveu/CBC - image credit)

Calgary's mayor and the CEO of the Calgary Sports and Entertainment Corporation (CSEC) held back-to-back press conferences Wednesday to address the inflating costs that collapsed Calgary's long-standing new arena deal.

Calgarians learned the controversial and over-budget deal for a new events centre — which would have replaced the iconic Saddledome in Victoria Park — was dead on Tuesday, when Mayor Jyoti Gondek announced that the Flames ownership group was ready to pull the plug.

After the CSEC released a statement on Tuesday, its CEO, John Bean, reiterated in a Wednesday press conference that there is no viable path forward to complete the Event Centre Project.

City of Calgary
City of Calgary

The corporation is unwilling to take on additional risk and rising costs, which are largely related to surrounding sidewalks and climate change initiatives, Bean said.

"This isn't us looking for a way out," Bean said.

"We genuinely believe that the right-of-way costs and the climate costs … really should not be for the account of CSEC. And we tried our best to convey that to the city."

WATCH | Expectations were clearly outlined for arena, Calgary mayor says

However, Gondek said in a press conference immediately following the CSEC's that the corporation was already well aware of what the climate mitigation expectations for the project were.

"[And] we are insisting on things like sidewalks, because you need them for a good … experience," Gondek said.

She said the city is hoping the CSEC will find the money, and is considering next steps if they don't.

"It's an unreal sense of loss right now."

WATCH | CEO of the Calgary Sports and Entertainment Corporation talks collapsed arena deal

Rising costs present sticking points

In 2019, the city and the Flames agreed to terms on the Event Centre replacing the Scotiabank Saddledome, the home of the Flames since 1983.

The original estimate of $550 million to build the new 19,000-seat arena was to be split between the city and CSEC, which also owns the Western Hockey League's Calgary Hitmen, the Canadian Football League's Calgary Stampeders and the National Lacrosse League's Calgary Roughnecks.

Earlier this year, however, it was revealed the deal was close to $60 million over budget, and the arena is now projected to cost $608.5 million.

During the summer, both the city and the CSEC agreed to pay an additional $12.5 million for the arena — and agreed that the CSEC would cover any more cost overruns.

However, after costs for climate mitigation, such as solar panels, and right-of-way issues for road and sidewalks were identified, new costs totalled $16.1 million.

Mayor Jyoti Gondek said the city asked the CSEC to contribute $9.7 million of that amount, in addition to what had already been agreed on.

On Tuesday, Gondek said she spoke with Murray Edwards, primary shareholder of the CSEC, who informed her the events centre deal would not be going forward.

"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," she said Tuesday.

Neil deMause, a journalist who has covered sports stadium controversies for more than 20 years, told CBC News that he couldn't recall another arena deal that got this far before reaching a major roadblock.

"As I have told people for years now, the only sure estimate of how much a sports facility will cost is: more than you expected," deMause said.

'This can't become just another thing that Calgary didn't do'

Meanwhile, onetime Calgary mayoral candidate and former Ward 6 Coun. Jeff Davison, who previously led city negotiations on the deal, said in a statement Wednesday that the majority of Calgarians understand the importance of the project.

It was intended, Davison said, to anchor a long-term growth strategy to "fix downtown and stop the shrinking property values that are shifting the tax burden onto homeowners."

That strategy included an expanded BMO Centre and revitalized downtown — with more hotels, bars, parks, restaurants, and transit through the Green Line LRT — that Davison said would attract investment, businesses and jobs.

"As this was my vision and I guided this project to approval, I strongly encourage the Mayor and CSEC to come back to the table and find a way to salvage this process," Davison said.

"This can't become just another thing that Calgary didn't do."

Abandoning the project would compromise critical investments in community vibrancy, talent attraction and economic recovery, said Deborah Yedlin, president and CEO of the Calgary Chamber of Commerce, in an emailed statement.

She said that in addition to creating jobs, the events centre would have a positive impact on property tax generation, support for local sports organizations, community engagement programming and the ability to hold concerts.

"At this critical stage of the development process, and given the resources already invested, the business community encourages shareholders and stakeholders to demonstrate flexibility and finalize this agreement for the benefit of Calgarians today and tomorrow."

The CSEC said the Calgary Flames will continue to play at the Saddledome.

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