Recent signs are pointing to a imminent new deal for an event centre for Calgary..Is it really close or is this just false hype? Let’s look at the evidence and the likely costs..Before Christmas, the city released an update on the proposed redevelopment of McMahon Stadium, including the Foothills Fieldhouse. The project had reached a ‘critical juncture’ and needed financial commitments from the provincial and federal governments. The city was prepared to commit $20-million to the $285-million project. Nothing was heard from the feds, and despite Ric McIver being seconded to help the Calgary Sports and Entertainment Corporation [CSEC] and the city make an arena deal, neither was anything heard from the province. Nonetheless, this much needed project has been reintroduced to Calgarian’s consciousness after nary a mention in over a year..Earlier this week there could have been a ‘leak’ from the otherwise impenetrable negotiating bubble around the CSEC and the city. Sonya Sharpe confirmed her committee was looking at all alternatives including the CSEC’s 2015 CalgaryNEXT proposal in the West Village area of downtown. That proposal would have a new football stadium, a field house and a new event centre..In 2017 the cost of this proposal was $890-million excluding infrastructure upgrades to enhance user access. Based on a report from City Hall administrators, that cost estimate ballooned to $1.8 billion. Then mayor Naheed Nenshi unilaterally declared the project dead..A big stumbling block for the project was the remediation of the contamination of the old Canada Creosote site that underlies most of the West Village..Subsequently, there was a change to the negotiations around the new arena. Secrecy was required by the CSEC so as to prevent derailing the project through negotiation in the media. Also, Nenshi was excused from negotiation duties to be replaced by Coun. Jeff Davidson. Some of the guiding principles the city administration used to evaluate the CalgaryNEXT proposal were dropped as in the end they proved to be fatal stumbling blocks in advancing any project, not just the specific West Village proposal..In the end a ‘done deal’ was announced for the Calgary Event Centre in Victoria Park with a final cost estimate of $635-million..In the face of post-COVID inflationary pressures and the city reneging on the 50/50 cost sharing formula, Murray Edwards approached Mayor Jyoti Gondek to re-open the cost-sharing arrangements. He was rebuffed and CSEC walked away from the project. Coun. Sonya Sharpe took over from Davidson and with the help of a professional sports facility consultant has been negotiating with CSEC..Part of the difficulty facing the city at this point is the continuing blame game on why the Davidson deal fell apart. Let’s suppose that the current cost for the Victoria Park option has now risen 30% to $825-million. If the CSEC is still demanding 50/50 this means the city’s share has gone from $287.5-million to $425.5-million. All because Gondek decided (without consulting council) to stand up to the evil oil billionaires. This has not enhanced her image as a competent leader, but the entire city council is also painted with the same brush. It would be far better if the city and CSEC could divert attention away from that bad deal to something ‘new and improved’..Enter the next iteration of the CalgaryNEXT project. What's different about the negotiations on this project is the direct participation by the provincial government. That means that the issues surrounding the remediation of the Canada Creosote site, a provincial responsibility, can be part of the negotiations. Fast tracking the approval of the remediation plan and perhaps extending the existing containment strategy will surely advance the timeline and reduce the costs. As well, the provincial government can at the same time demonstrate its environmental stewardship and repurpose the land in West Village that otherwise may remain vacant forever. In her press conference on Feb. 9 2023, Danielle Smith was clearly well-briefed and even admitted new technologies for remediation had been considered..So what will the new numbers look like?.Let’s suppose that the cost of the original CalgaryNEXT has increased by 50% to $1.3-billion and the remediation also increases to $130-million for a total bill of nearly $1.5-billion. If we reduce this by the cost of the Foothills Park redevelopment of $285-million and the Victoria Park event centre cost of $825 million, we are left with a $355 million increase over the alternative developments. If the province kicks in for the remediation costs, then the net increase is $225-million. Split this two ways between the city and CSEC and it's only a little over $100-million each..If Calgarians have no problem with a $5-billion (and rising) cost for a Greenline expansion that fewer and fewer people are willing to ride, then Sharpe should be able to sell this to the good citizens of Calgary..The only caveat is any infrastructure costs arising out of the developments would be paid by the city. This may be a sticking point with the bean counters at city hall. But an additional benefit is the redevelopment boost this would have in west downtown. Remember this is where the office vacancies are the highest and more stimulus is needed..The final piece in this puzzle is the McMahon area would be free for redevelopment as it's owned by the U of C. The best use is probably to expand the Faculty of Medicine and the Foothills Hospital Center..Our health-care system needs more doctors and we need more physical capacity. The best place to build that out is where it is accessible to existing facilities and people..One thing was very clear from the last round of drama: any new and improved environmental costs (for solar panels or roof top windmills) will be paid by the city since that's what Calgarians voted for in the last election. .Now if the Flames could just notch a few more W’s then life would be near perfect..William D. Marriott is a retired professional economist and avid Flames and Stampeders fan.
