City of Calgary paid U.S.-based firm nearly $1M for arena deal negotiations
Lily Dupuis, Scott Dippel | CBC News | Posted: July 24, 2024 2:50 PM | Last Updated: July 24
CAA Icon earned $956,000 for 15 months of work
After initially refusing to say how much it paid a U.S.-based firm to act as its negotiator for a new downtown arena, the City of Calgary now says it paid the company, CAA Icon, nearly $1 million.
The Denver-based CAA Icon is the company that negotiated on behalf of the City of Calgary with the Calgary Sports and Entertainment Corporation (CSEC) and the Calgary Stampede on the arena deal.
The company also helped secure $330 million in funding from the Government of Alberta for infrastructure improvements in the city's new entertainment district.
Together, the city, the province and CSEC are footing the $926.4 million-cost of the five main components of the new arena — which will be called Scotia Place — including the arena itself, a community ice rink, a parkade and indoor and outdoor community event plazas.
The City of Calgary is paying $853 million of the arena cost up front. But with payments from CSEC over 35 years, it says it will end up covering 56 per cent of the cost of Scotia Place.
In 2019, the city and the Calgary Flames agreed to replace the Scotiabank Saddledome — the home of the team since 1983 and the NHL's second oldest hockey venue. The original estimate of $550 million to build a new 19,000-seat arena was to be split between the city and CSEC.
In December 2021, CSEC — which owns the NHL's Calgary Flames, the WHL's Calgary Hitmen, the CFL's Calgary Stampeders and the NLL's Calgary Roughnecks — pulled out of the arena deal just as construction was about to begin after cost estimates grew millions over budget.
Months later in 2022, after the City of Calgary and CSEC agreed to resume talks, CAA Icon was hired to represent the city in the negotiations.
$956K for negotiator was 'commercially confidential'
In May, the City of Calgary previously told CBC News the dollar amount it paid CAA Icon was "commercially confidential."
"As the project progresses, the city intends to release relevant information, including further costs, when it is able to do so," reads a statement from the city issued in May.
However, after CBC News filed a request under Alberta's Freedom of Information and Protection of Privacy legislation (FOIP) to obtain the payment, the city has now released the figure.
On Tuesday, the city told CBC News it paid the American firm $956,000 for 15 months of work on the arena file.
The city's general manager of infrastructure services, Michael Thompson, says the fee paid to CAA is worth less than 0.1 per cent of the value of the agreements.
"Typically, as we work with consulting teams in this field, we would be looking at what's a percentage of the total deal? And so, at less than one per cent of the total deal price, we feel that was really great value for Calgarians," said Thompson.
"We really valued the work that we did with CAA Icon, helping us to structure this deal."
He says the entire process was about finding the best value and the best outcome for Calgarians, something he believes the company understood.
The entire project — including Scotia Place and the new entertainment district — has a value of almost $1.2 billion. Its design was unveiled earlier this week.
CAA Icon is now working for the city in another capacity.
It is the development manager for the new arena, which includes overseeing the design process, obtaining necessary approvals and guiding the construction of the event centre block over the course of a three-year period.
For that job, the company is being paid $18.9 million, and CAA Icon won the contract after a competitive bid process earlier in 2023.
The groundbreaking was held earlier this week for the new Scotia Place arena. It's slated to open in 2027.
The city-owned building will be the home of the Calgary Flames for 35 years, under the terms of the agreement.
CSEC will be in charge of operating the building and it will earn revenues from the use of the facility, but has agreed to pay the city $17 million per year for the use of the building, an amount that will increase by one per cent annually over the term of the deal.