This is Calgary’s third try to get an arena built — any chance we learned anything from the last two failures? Will anything actually get done?.Count me among the pessimists..But first, full disclosure. I had season’s tickets for the Flames in the Saddledome for 25 years. Before that I watched the Flames in the old Corral (RIP). And before that I watched the Calgary Cowboys of the WHA also in the Corral. Also, I got to know a number of the current Flames owners during my time as an oil industry lobbyist. So, I am probably a little partisan on this issue..There is some important background information to put the current negotiations in context..First, arena investments in small markets like Calgary are not economically viable without some sort of government subsidy. City hall’s latest chestnut they would seek investors other than the key tenants didn’t cause a bidding war: In fact, no one showed up. Remember, even the Saddledome was subsidized by both the city and the province before it could be built. So, the real issue is not if the taxpayer will contribute, but how much. The 50/50 funding partnership in the last deal was generally thought to be a reasonable compromise..Second, citizens at large benefit from having world-class facilities in their cities. Remember the $400 million library that 99% of the population will never use? Calgary also benefits from having professional sports teams, even though that entertainment may not be to everyone’s taste. By the same token, having worn out and dated facilities is a sure sign of a city in decline..Third, the ownership of the Flames and their subsequent involvement with the Stampeders, the Roughnecks, the Wranglers and the Hitmen has little to do with making money. From the very beginning the investors’ priority was local community ownership and control, thus ensuring stability for the sports teams in Calgary..By all accounts the Calgary Sports and Entertainment Corporation (CSEC) is one of the best-managed sports companies in North America and its philanthropic corporate culture filters down to the players themselves. When the Flames owners want to make money, they can make a lot more of it in the oil business..Fourth, the City of Calgary already reneged on the 50/50 funding deal. Breaking the last agreement seems to have been glossed over as some sort of irrelevant detail, much to the credit of the CSEC for not making a big deal of it. CSEC agreed to pay for the inevitable construction cost overruns, which the city refused to pay..However, the world as we knew changed with COVID-19 and with it, the risk profile of sports and entertainment events. In a world where governments can shut down professional sports teams for years and ban entertainment events, investors are thinking twice about this line of business. Plus the cost overruns resulting from the disastrous inflation generating responses to COVID are scaring investors away from big long-term projects..Fifth, what is with the mayors in Calgary? Former Mayor Naheed Nenshi single-handedly sabotaged the 2015 CalgaryNext proposal which would have developed not only an event centre, but a replacement for the embarrassing McMahon Stadium. This development would have provided a field house for amateur sports and would have sparked real estate development spinoffs in west downtown..Current Mayor Jyoti Gondek went public rather than reopen negotiations as proposed by Murray Edwards. Perhaps she thought she could force the Flames to capitulate, but unfortunately it painted Edwards into a corner. These guys don’t bluff. So, Coun. Sonya Sharp has been trying to clean up Gondek’s mess for more than a year. Because of the publication ban insisted upon by the Flames, we have no idea what progress has or has not, been made..Premier Danielle Smith’s recent entry into the issue was a not-so-gentle reminder perhaps adults should be in charge of the negotiations. No doubt Sharp was annoyed, but if it moves the city closer to a deal, then good for Smith..Will Calgary get a new arena? Yes, eventually, but it will cost a whole lot more. Calgary taxpayers had better get ready for the inevitable and also for a longer wait..Will Calgary get a new football stadium? No, and it remains uncertain whether the CFL can survive just on TV revenues. If TV is the future then the Stampeders will probably move to Spruce Meadows just like the Calgary FC soccer club..Will Calgary get a field house for amateur sport? Nope, not unless Calgary taxpayers get out their chequebooks..Will the new arena revitalize Victoria Park and increase participation in arts, cultural and entertainment activities there? Probably not because along with COVID’s devastating effects on the hospitality and tourism industries in Calgary, the demand for these activities, like the demand for downtown office space, is never coming back..Some days, I just want it to be 2015 again..William D. Marriott is a retired professional economist and avid Flames and Stampeders fan.
This is Calgary’s third try to get an arena built — any chance we learned anything from the last two failures? Will anything actually get done?.Count me among the pessimists..But first, full disclosure. I had season’s tickets for the Flames in the Saddledome for 25 years. Before that I watched the Flames in the old Corral (RIP). And before that I watched the Calgary Cowboys of the WHA also in the Corral. Also, I got to know a number of the current Flames owners during my time as an oil industry lobbyist. So, I am probably a little partisan on this issue..There is some important background information to put the current negotiations in context..First, arena investments in small markets like Calgary are not economically viable without some sort of government subsidy. City hall’s latest chestnut they would seek investors other than the key tenants didn’t cause a bidding war: In fact, no one showed up. Remember, even the Saddledome was subsidized by both the city and the province before it could be built. So, the real issue is not if the taxpayer will contribute, but how much. The 50/50 funding partnership in the last deal was generally thought to be a reasonable compromise..Second, citizens at large benefit from having world-class facilities in their cities. Remember the $400 million library that 99% of the population will never use? Calgary also benefits from having professional sports teams, even though that entertainment may not be to everyone’s taste. By the same token, having worn out and dated facilities is a sure sign of a city in decline..Third, the ownership of the Flames and their subsequent involvement with the Stampeders, the Roughnecks, the Wranglers and the Hitmen has little to do with making money. From the very beginning the investors’ priority was local community ownership and control, thus ensuring stability for the sports teams in Calgary..By all accounts the Calgary Sports and Entertainment Corporation (CSEC) is one of the best-managed sports companies in North America and its philanthropic corporate culture filters down to the players themselves. When the Flames owners want to make money, they can make a lot more of it in the oil business..Fourth, the City of Calgary already reneged on the 50/50 funding deal. Breaking the last agreement seems to have been glossed over as some sort of irrelevant detail, much to the credit of the CSEC for not making a big deal of it. CSEC agreed to pay for the inevitable construction cost overruns, which the city refused to pay..However, the world as we knew changed with COVID-19 and with it, the risk profile of sports and entertainment events. In a world where governments can shut down professional sports teams for years and ban entertainment events, investors are thinking twice about this line of business. Plus the cost overruns resulting from the disastrous inflation generating responses to COVID are scaring investors away from big long-term projects..Fifth, what is with the mayors in Calgary? Former Mayor Naheed Nenshi single-handedly sabotaged the 2015 CalgaryNext proposal which would have developed not only an event centre, but a replacement for the embarrassing McMahon Stadium. This development would have provided a field house for amateur sports and would have sparked real estate development spinoffs in west downtown..Current Mayor Jyoti Gondek went public rather than reopen negotiations as proposed by Murray Edwards. Perhaps she thought she could force the Flames to capitulate, but unfortunately it painted Edwards into a corner. These guys don’t bluff. So, Coun. Sonya Sharp has been trying to clean up Gondek’s mess for more than a year. Because of the publication ban insisted upon by the Flames, we have no idea what progress has or has not, been made..Premier Danielle Smith’s recent entry into the issue was a not-so-gentle reminder perhaps adults should be in charge of the negotiations. No doubt Sharp was annoyed, but if it moves the city closer to a deal, then good for Smith..Will Calgary get a new arena? Yes, eventually, but it will cost a whole lot more. Calgary taxpayers had better get ready for the inevitable and also for a longer wait..Will Calgary get a new football stadium? No, and it remains uncertain whether the CFL can survive just on TV revenues. If TV is the future then the Stampeders will probably move to Spruce Meadows just like the Calgary FC soccer club..Will Calgary get a field house for amateur sport? Nope, not unless Calgary taxpayers get out their chequebooks..Will the new arena revitalize Victoria Park and increase participation in arts, cultural and entertainment activities there? Probably not because along with COVID’s devastating effects on the hospitality and tourism industries in Calgary, the demand for these activities, like the demand for downtown office space, is never coming back..Some days, I just want it to be 2015 again..William D. Marriott is a retired professional economist and avid Flames and Stampeders fan.
