The city of Calgary has finally revealed some of its legal contracts with the Flames governing the team’s new arena — six months after voting on it, because that’s totally how democratic oversight is supposed to work — and the highlights include:
- As previously reported, the city will pay $275 million toward construction, plus financing charges and the cost of demolishing the old Saddledome (previously reported at $12.4 million), while receiving $250,000 a year for 10 years in naming-rights fees, plus 2% of all ticket sales, capped at $3 million a year for the first five years. Last time I crunched the numbers on this I came up with a net total of $212.9 million in public costs; given that the ticket tax payments will be significantly backloaded toward the end of the lease, the base cost to the city is probably more like $230 million or so.
- Not as previously reported, the city will be on the hook for any insurance premiums above what the team would pay if the arena weren’t in a flood plain, and will have to cover 50% to 67% of any construction cost overruns, depending on future negotiations.
- The Flames owners won’t be property taxes, but instead will make payments in lieu of taxes in the amount of
Yep, they omitted the actual payment amount, citing a section of Alberta’s Freedom of Information and Protection of Privacy Act that exempts from public disclosure laws information that would be “harmful to business interests of a third party,” though the very next section says the exemption doesn’t apply if “the information relates to a non-arm’s length transaction between a public body and another party,” so hopefully we’ll see some lawsuits to get that number revealed.
The total cost is impossible to say without knowing how much of a tax break the team is getting or how much cost overruns could be, but suffice to say we’re probably looking at more than $250 million now, which is a whole hell of a lot more than the $47 million net loss the arena’s backers touted to get the deal approved by the city council.
Calgary Mayor Naheed Nenshi says he’s not concerned about cost overruns because the Calgary Municipal Land Corp. “is the project manager on that project, they know how to build stuff on budget and on time”; all those who are reassured by this, please raise your hands. Now, all those who are wondering when Naheed Nenshi was replaced by an alien shapeshifter, please raise your hands. Keep ’em up, I’m still counting…