The city of Calgary and the owners of the Flames have reached an agreement on how to pay for the $50-60 million in estimated cost overruns on the team’s new arena, and good news, everybody! In what Mayor Naheed Nenshi calls a “huge win for ratepayers,” instead of having to split the first $25 million in cost overruns with the team like the city agreed to do back in 2019, instead the city will split the first $25 million in cost overruns with the team! Yes, that sounds like the exact same thing, but did we mention that all additional overruns will be covered by the team owners? Which was part of the original plan, too, sure, but look, maybe it’ll sound better in raw numbers:
In the just-released documents, the estimated cost for the arena is now $608.5 million. Of that, the city will pay $287.5 million (plus up to $10 million for prep work), while the Flames will pay $321 million.
And that’s it! Oh, except for:
“There are the initial flood and site mediation costs that were already in there that we will be looking at capping at $10 million dollars. CMLC is also, as they would for any developer, doing some utility relocation and so on. That’ll probably be about $4.5 million to $4.8 million,” said Nenshi.
It’s not clear what additional transportation costs will be, though the mayor said he believe them to be minor.
Okay, so that’s $287.5 million, plus $10 million for site prep, plus $4.5 million or so for utility relocation, plus “minor” transportation costs — that’s barely more than $300 million for what was promised to be a $47 million net cost. (To be fair, the city will get some of that back through ticket taxes; to also be fair, it won’t get much of it back.)
As for why the arena is going so far over budget, it’s because of little things like the initial design being entirely wrong and failing to count how many bathrooms would be needed, totally unforeseeable issues, surely:
“It was built on an inverted bowl design which is very, very steep and it may not have worked in that particular piece of land and it would’ve been bad for accessibility. As we got into further design work, we realized there are some other things,” the mayor told reporters Monday.
“For example, there weren’t enough women’s bathrooms and, in fact much to my surprise, the thought was that there may be too many luxury boxes and not enough seats for regular people.”
The Flames owners, for their part, will raise ticket fees on concerts and other non-sports events at the arena from 8% to 9.5% to pay for their increased share, which ultimately comes out of their own pockets because it keeps them from raising ticket face values as much as they would otherwise, so that’s all fine. The city will pay for its increased costs by, um, Nenshi didn’t actually say, but there have got to be some more zoo workers who can be laid off, right?
The ole “design flaws” gambit never gets old
So does the “Oops. Too many luxury boxes.” Like anyone would buy that.