Q&A: Top city officials defend, explain the latest deal to replace the Saddledome

It's official. Calgary is getting a new downtown arena.

How many times has that been said in the past few years?

The City of Calgary, the Calgary Sports and Entertainment Corporation (CSEC), the provincial government and the Calgary Stampede have all signed off on a series of agreements that clear the way for a new arena and the build out of a new entertainment district.

The arena is slated to cost $800 million, while other expenses, including surrounding infrastructure, bring total project costs close to $1.2 billion.  

The city will be contributing $537 million to the project, while CSEC is putting forward $356 million (in present value). 

Under the terms of the agreement, CSEC has agreed to make annual payments to the city of $17 million for 35 years, which include an annual escalation of one per cent.

The province is putting forward $330 million to be used toward infrastructure investments, including land purchases, road and bridge construction, and demolishing the Saddledome. 

While the design of the arena is still under development — and the idea is that construction will start in 2024 — no one is saying just yet when the building will open.

In the wake of the finalization of the deal, CBC News put some questions to two top City of Calgary officials who have been overseeing the file on the megaproject.

They are city manager David Duckworth and Michael Thompson, the general manager of infrastructure services.

The discussion has been edited for length and clarity.

CBC: How do you address concerns that the city is putting up too much money for the arena?

DD: Well, I think first and foremost, it's important to point out that we're not just building an arena. We're building a culture and entertainment district. We're going to completely transform that area in the next five to 10 years here. When we look back, I think Calgarians are going to be incredibly proud. So we're building a brand-new, 18,000-plus-seats arena [and] downtown's only community rink, a 1,000-seat community rink. There will be outdoor and indoor public gathering spaces.

We're hoping that Calgarians and visitors can come and experience events on the outside without them having to be on the inside. So it's really about building community. In addition to that, the new event centre will be right across the street from Canada's second-largest convention centre, which is going to be incredible. And so it's just completely transforming that area. The good news is we know the Saddledome needs to be replaced. It's 40 years old. Either [it] needs to be replaced or it needs hundreds of millions of dollars of upgrades. With our brand-new event centre, we're going to have an anchor tenant [Calgary Flames] for 35 years.

So the city owns this facility and we have an anchor tenant for the next 35 years that will help, that will operate, maintain that facility, have a professional sports team, host incredible events for all Calgarians and visitors to come to. So it's much more about an investment that the city is making in that district as it is about the operators of an NHL team.

But the last time there was an arena deal, it was basically 50-50 (City/CSEC) and this time it's not like that. Why?

DD: It's apples and oranges. You can't even compare the two deals. In addition, there will be a bunch of private-sector investment that we anticipate in that area. I think you heard there's going to be 8,000 new residents living in this area. I have no doubt there will be much more retail hotel space and the synergies that it will play off with the convention centre [BMO Centre expansion which opens in 2024]. Five or 10 years from now, Calgarians will look back at what happened, what's going to be happening and built in this area. It's going to be transformational. That's going to last generations and we're excited, incredibly excited, about this investment that we're making in that area.

Does that annual payment from CSEC preclude the city from collecting property tax on the potential development property on the northeast corner of the event centre block?

MT: There are four [development] parcels [in the district] that will generate property tax that will come back to the city because they'll be privately owned. That piece on the northeast corner, it might move as we're going through the design of the facility. We're going to figure out how we place the facility, how we place the community rink, the parkade, the outdoor plazas. And so if it shifts around — right now we think it's about a half-acre site — it may shift around as we're doing the planning and design of the facility.

Once we're locked down with the plan and the design for the facility, our approach will be to provide that option to Calgary Sports and Entertainment Corporation to buy that piece of property from the city, if they would like, and then develop it. As you look at a lot of these event centres around North America, they have retail along the street, restaurants, shops, that you can get into from the street face. Those portions would also be paying property tax. And so we will be generating revenue from the development around it, those four parcels as well as the retail.

DD: That's something that's different than what we've had before. Before, we weren't looking at how we're building that district out. This time, it was really important to us that we're looking at how we're going to build out, not just this 10-acre parcel, but the parcels around it, because those are contributing to that vibrant nature.

You look at the way the Saddledome was built. [It's] not unlike older facilities in sports around North America. It's a stadium or arena surrounded by parking lots. This is not going to be that. This is going to be an arena surrounded by retail, restaurants, hotels, residential high-rises. It's going to completely transform the area, which will increase the property tax revenue that the city will see coming from that area.

Will the green initiatives — solar panels, perhaps geothermal heating — be part of this new building as we saw the last time?

MT:   There will be green initiatives part of the building. We'll work through those through the design. We don't have any of those details yet because we are just starting the design now.

In Edmonton, the city has access to the community rink that's part of Rogers Place. Is there going to be any provision like that in this arena deal?

MT: The piece we love about the community rink is it will be available for public booking after 4:30 p.m. on weekdays and all day on weekends. The great thing about that is we need ice time in Calgary after 4:30 on weekdays and all day on weekends. And so the public will be able to access and book that space in the evenings, throughout the weekdays, and all day on the weekends. That's why it's going to be such a fantastic addition.

There are no hockey community rinks in downtown Calgary right now. And with the build out of the downtown and the $1-billion plan that the city has with respect to reinvigorating the downtown and bringing people downtown to live in all the the office conversion projects that are going right now, we need more recreational spaces like that in the downtown. So that's why this is such a great addition to this project and why we're really excited about it.