City of Calgary, Flames clash over new arena
Council rejects hockey team owners’ demands that it pay for extra police, waive transit fees on game days
The Calgary Flames, in negotiations with local politicians over a new $555-million arena, demanded the city pick up the tab for extra police needed at games and let people ride transit to the facility for free when the team is playing, according to multiple municipal sources.
The requests would put a multimillion-dollar dent in the city’s finances and could result in higher taxes. Waiving transit fares on game days, for example, would mean giving up about $10-million in revenue annually, according to one of the sources. Calgary would then have to fill this gap, perhaps by cutting transit services to other parts of the city or raising property taxes, the source said. Covering the cost of extra policing would also amount to an operating subsidy, according to the source who provided the detail about security expenses to The Globe and Mail.
Calgary bureaucrats had been providing updates to councillors throughout the negotiations between the city and the team’s owners, municipal sources told The Globe. The updates were always verbal, frustrating some councillors because it made it difficult to keep track of the negotiations.
The Flames’ owners, according to one source, also wanted the city to pay for most of the arena’s construction. Further, the ownership group demanded an exemption from property taxes and rent, the source said.
The Flames’ owners and politicians have, up until this week, kept financial details about their competing proposals quiet. That changed on Tuesday when Ken King, president of the organization that owns the Flames, told media that the arena discussions have been “spectacularly unproductive” and the team was done negotiating. Mayor Naheed Nenshi and council retaliated by making the city’s offer to the Flames public on Friday.
“The goal of building a new arena is not to win a Stanley Cup,” Mr. Nenshi told reporters with five city councillors at his side. “The goal of building a new arena is to make more money.”
New arenas are more profitable, Mr. Nenshi said, because they come with additional premium seating and more efficient concessions.
“Our argument is that the city needs to somehow share in the upside if we’re going to share in the cost,” he said.
The city offered to chip in the equivalent of $185-million for a new arena in Victoria Park, near the existing Scotiabank Saddledome, according to the proposal released by politicians on Friday. This contribution has three prongs: Calgary would hand over land valued at $30-million and pay the $25-million it would cost to demolish the Saddledome, which is 34 years old. Its remaining $130-million obligation would be in the form of “non-propertytax sources” according to the proposal. Taxpayers would also cover “indirect” costs such as upgrading utilities and other projects, such as a new train station. Some of these, including the transit stop, are already in the city’s development plans.
In exchange, the Flames would stay in Calgary for at least 35 years, the team would pay property taxes and the facility would be made available during the Calgary Stampede and international events. The team’s owners would cough up $185-million and the remaining $185-million would come from a surcharge on tickets. The Flames group would then own the arena and keep all the revenue.
Mr. Nenshi did not reveal the details of the Flames’ proposals. He did, however, discuss the confidentiality arrangement. “They made an initial proposal that they took pains to tell us was not confidential and the new one is not particularly different from that one,” Mr. Nenshi said.
Neither the city nor the Flames have publicly released details about the team’s initial proposal. It is unclear whether the Flames’ demand for free transit service and policing is part of its most recent pitch. The Flames’ ownership group would not comment on the transit and policing request.
“We will disclose everything next week,” Mr. King said in a text message to The Globe. He added that the Flames organization was disappointed at how details of its offer were made public when they should have stayed private.
Calgary Sports and Entertainment Corp. owns the Flames, Stampeders and other sports franchises. CSEC, Mr. King said in a news press conference called in response to the city’s disclosure, is waiting until next week to release information because it needs time to prepare its presentation. Instead, Mr. King outlined why the Flames believe the city’s offer is unfair.
“Their proposal has us not only paying for everything, but more when you consider incremental taxes,” he said at the Saddledome on Friday. Surcharges on tickets, Mr. King said, essentially comes from the Flames’ revenue because if fans are willing to buy the more expensive tickets, the team is giving up cash it would otherwise be able to collect. The repayment plan also comes out of the Flames’ coffers. The land contribution is an “accounting” process, Mr. King said, noting the city is not buying land and the team will not own the land.
Calgary should contribute to the arena because that’s “what cities do.” This is public infrastructure, Mr. King said.
“Every meaningful city in the world has a gathering place where they can bring entertainment, sports, community events together,” he said, adding he was “inspired” by a trip to the Roman Coliseum. “From then until now, every city has had a beautiful and spectacular place,” Mr. King said. “This city will have it. Whether we’ll be participants financially in it or not, I don’t know.”
JEFF MCINTOSH/THE CANADIAN PRESS The proposed new Calgary Flames arena, a $555-million facility, has sparked tensions between the team’s owner and city officials, who say they should not have to commit more money to the project.