Cost of city's failed event centre deal rings in at $16.8M
The city's bill for the failed event centre process was just under $17 million, according to documents released by the city.
The number was contained in a city briefing going to councillors before Thursday's executive committee meeting.
The report says the city has tied up the loose ends of the previous agreement closeout, with a “near-final” contribution of $16.8 million.
The money came from a council approved $312.9-million capital budget, meaning there is $296.1 million remaining.
The briefing does not say what will happen with the remaining funds. It is unclear if it will automatically go toward any future event-centre agreement. The city has attempted to restart talks with the Calgary Sports and Entertainment Corp. (CSEC) on a replacement for the Saddledome by bringing in a third-party mediator.
At the most recent meeting of the event centre committee, chair Sonya Sharp said the group was having “great conversations” with CSEC through the third party.
Sharp said CSEC and the city shared the closing costs equally, spending $14.2 million each. The city had its own costs, including transaction costs and consultants, that totalled another $2.6 million.
She said the fees are typical for a project of this scope. The report to council was the city's due diligence in being transparent about the costs.
Sharp couldn't say if there's a possibility of recovering some of the costs by not having to redo work if the city and CSEC are successful in negotiating a new deal.
“I would say we're still very premature to make that call or to give that information,” she said. “We're still very much in the conversation piece and deciding on a path forward.”
The city had signed a deal with CSEC in July 2019 to split the cost of an event centre to be built in East Victoria Park.
Costs on the project ballooned from the original estimate of $550 million to more than $630 million.
Design work had been undertaken and the development permit for the project had been approved when CSEC chose to walk away from the deal to due to escalating costs.