Third Time’s the Charm for Calgary’s New Arena Deal... Maybe
Calgary is once again abuzz with talks of a new arena for their major sports teams.
Scotiabank Saddledome, Photo by Jim Flannery, Stadium Journey
As announced on April 25, the province of Alberta has entered an agreement in principle with the City of Calgary and the Calgary Sports and Entertainment Corporation (CSEC) to build a replacement for the 40-year-old Scotiabank Saddledome, as well as redeveloping the surrounding neighborhood. The price tag for this iteration of the arena is currently set at $1.22 billion.
The announcement was made just days before the official start to a provincial election, making the timing of the press conference immediately a hot button topic in Calgary, the city where voting will most likely decide which party takes over when the polls close on May 29.
This will be the third attempt at building a new facility and this one might have even more political baggage than either of the previous proposals. Politics and power have been at the heart of the arena deal since the first one was proposed almost a decade ago and, with each passing year, each successive failure to get the place built, and each cost increase, the stakes get higher.
In fact, Alberta Premier Danielle Smith seemed to be suggesting that provincial money was tied to the results of the upcoming election, when she said, “on May 29, I’m hoping Calgarians give our [United Conservative Party] government a clear mandate to proceed with this arena deal.”
So who are the key players in this arena deal and how did we get here?
The CSEC are the owners of many of the major sports franchises in the city—the Calgary Flames (NHL), Hitmen (WHL), Wranglers (AHL), Roughnecks (NLL) and Stampeders (CFL). With all those teams, the organization wields a significant amount of clout in the Calgary entertainment industry. Further, all but the Stampeders play under the same roof, in the Saddledome, making them extremely motivated to get a new rink built.
Calgary’s city council over the last number of years has been a mix of progressive and conservative elements who all agree that a new arena would be nice, but only if it makes financial sense to the city and not just to the CSEC.
The provincial government has, for the most part, stayed at arm’s length in this conversation. In 2015, the New Democratic Party swept to power, defeating the incumbent Progressive Conservative Party, marking the first time since 1971 that a party other than the PCs had been elected. The NDP, led by Rachel Notley have a far more politically centrist agenda, with a greater focus on social issues and climate change, and were only able to hold power for four years. In 2019 the UCP, a new conservative party which is an amalgamation of the PC Party and the more radically conservative Wildrose Party, defeated the NDP, pushing an aggressively right wing platform. Through all of this, the province has stayed away from the bargaining table, leaving it to the city and the CSEC to reach an agreement.
There is one other invested group that hasn’t really had any power in the negotiations, and that’s Calgary’s residents. There is a push among sports fans in the city to get a new arena built—particularly since Rogers Place opened in Edmonton, Alberta’s capital and Calgary’s chief rival in… everything—but many citizens have seen spending tax dollars on a facility for a giant corporation run by billionaires as a bad idea, so feelings have been and continue to remain mixed on the topic.
And that brings us to the saga of replacing the Saddledome.
Chatter about keeping up with Edmonton began in earnest once construction began on Rogers Place, with the City of Calgary caught between cries for fiscal responsibility in the face of increasing property taxes and an aging piece of infrastructure in the Saddledome, which simply does not compare to the shiny new rink the rival Edmonton Oilers now occupy. Calgary has consistently leveraged their need to provide value to its citizens, while the CSEC has maintained that they cannot remain viable by having an NHL franchise inhabit a nearly 40-year-old arena.
In 2015 the CSEC came out with an ambitious project called CalgaryNEXT. They proposed a new multi-purpose facility which would replace both the Scotiabank Saddledome and McMahon Stadium, two stadiums that are both old and no longer up to the standards fans in the 21st Century expect. The building would house an arena for the Flames, Roughnecks and Hitmen to play in as well as a football field for the Stampeders. This facility would be situated on an underutilized piece of land to the west of Calgary’s downtown where a lumber yard once stood a century earlier.
City Council quickly said no to this proposal. Calgary’s economy had suffered a massive blow in late 2014 when the oil industry collapsed, resulting in widespread layoffs and business closures, and there simply wasn’t an appetite for such an ambitious—and expensive—project. Noted Mayor Naheed Nenshi at the time, “There are very significant requirements for public funding beyond the fieldhouse funding, and there is currently no money.” The fact that site remediation to decontaminate the proposed location (the former lumber yard had left the area soaked in creosote and other toxins, all of which would need to be cleaned up before construction could begin) might cost more than the building itself was also a big factor in the quick dismissal of this project.
Two years later, in 2017, the City and the CSEC began negotiations on an arena to be located next to the Saddledome, to the south-east of downtown. The talks eventually led to a deal in the summer of 2019. Unlike the previous proposal, this would strictly be an arena, with the football stadium/fieldhouse remaining an outstanding challenge to be resolved in the future.
This new deal was not without controversy, being approved amidst the ongoing economic downturn and significant belt-tightening in the City budget. A number of Calgary citizens found the timing of deciding to go forward on a $550 million project like this to be problematic.
The agreement to build this facility was inked in 2019, with a $550 million price tag that the City and the CSEC agreed to split. Then in July, 2021. the agreement was revised, along with a bulked-up $608 million cost. And the price continued to grow; per The Calgary Herald, the price had climbed to $630 million over the next few months.
But the last one-to-two percent of costs, which the CSEC had initially agreed to pay for, were apparently a key sticking point, and more than the organization was prepared to fund. In the first week of January, 2022, the City and the CSEC chose not to renew their deal and, once again, the new arena project was dead.
News of that deal collapsing generated mixed feelings, not surprisingly. Alberta Premier Jason Kenney, leader of the UCP, placed the blame for the failure of the arena deal squarely at the feet of newly elected Calgary Mayor Jyoti Gondek. Mayor Gondek quickly responded, saying, “If the premier is unaware of the process of how a land development project gets to the development permit process, I’d be happy to discuss it with him.”
And that brings us to the present. Negotiations between the City and the CSEC have continued behind closed doors since the collapse of the last deal, and apparently at some point the province got involved, promising to add additional funds to redevelop the neighbourhood surrounding the new arena, in much the same way as the Ice District has grown up around Rogers Place in Edmonton.
The total price tag for this project has ballooned to roughly twice as much as the 2019 deal, with the City’s contribution also doubling while the CSEC portion has only grown modestly (to $356 million) and will be repaid over a 35-year period. And then there’s the province’s $330 million contribution.
It should be noted the Calgary’s City Council unanimously approved of the deal prior to the announcement and in spite of the much larger cost to the city. This is a surprising turn of events in a council notorious for rarely seeing eye-to-eye on spending bills.
Making things more complicated, the details of the deal have not been released and won’t be until the weeks after the election. Consequently, the NDP’s Notley has refused to commit to following through on the deal—if they can’t see the specifics, they won’t just agree to it. Per Global News, Notley said, “All I’m doing on that issue is taking a very cautious and conservative approach that I think most Calgarians and Albertans would expect us to do to find out who’s on the hook for what kinds of elements in this plan and then make our decision.”
Smith, who replaced Kenney as Premier last October, has used this reluctance to argue that Notley is against the deal and, by extension, against the interests of Calgarians. Per the Winnipeg Sun, Smith said, “Let me be perfectly clear with Calgarians. If the UCP wins the next election we will be moving ahead proudly with this deal. I guess we now know the NDP would not.”
And why is this whole conversation so important to this election? Both the UCP and NDP have large areas where they can count on voter support.
For the UCP, it’s the rural areas, who have consistently voted conservative for generations and which account for roughly half of the seats in the legislature.
For the NDP, their stronghold is Edmonton, which is a more liberal, union-friendly environment that is more receptive to progressive ideas, with about a quarter of the seats.
And Calgary remains somewhere in the middle, with a mix of conservative and liberal elements. Calgary, like Edmonton, controls about a quarter of the seats in the provincial government. So the party that wins the May 29 election will be the one that wins Calgary’s seats in the provincial legislature.
Some financial concerns have shifted in the past year. The big increase in the price of crude oil that happened in 2022 has resulted in a significant injection of cash into Calgary’s oil and gas head offices and created a $12 billion tax surplus for the provincial government. In the past several months, Smith has been throwing around a bunch of that surplus as part of the pre-election campaign, promising millions of dollars of investment into various sectors. With Calgary expected to be the battleground where the election will be decided, it’s no surprise that the UCP have chipped in a bunch of money to a hot-button issue, in an attempt to sway voters.
But that might have backfired. According to the Calgary Herald, only 43 per cent of people polled on the deal were in favour of the province contributing to it, while 50 per cent were opposed. The polling was even more lopsided in Edmonton where 61 per cent were opposed. So this move might actually cost the UCP votes.
Moreover, that same Herald article notes that Smith was on record as being opposed to using taxpayer money to fund pro sports venues a decade ago, so some are calling into question her sudden shift in opinion right before an election where that money might buy them extra support in a critical battleground.
So where does this leave everything? The next critical date is May 29, when the election votes are tabulated and we know who will be running Alberta for the next four years. If it’s the UCP, it seems likely that the arena will proceed (although the price of crude oil has been sinking, which may force them to start reneging on promised big ticket items). If the NDP win, they may or may not take a look at the details of the deal and approve of it—we won’t know for several weeks.
One thing is for certain: the saga of Calgary’s new arena is far from over.
McMahon Stadium, Photo by Matt Finnigan, Stadium Journey