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There’s money for a ‘mid-sized’ arena in the proposed 2026 Olympic budget (and arena size may be flexible)

On Tuesday afternoon, the Calgary 2026 bid corporation released their Draft Hosting Plan Concept and presented it at Calgary City Council.

The bid concept totalled $5.23 billion for projected capital and operational costs of hosting the 2026 Winter Olympics and prompted two primary questions from Calgary Flames fans:

  1. How much is this going to cost taxpayers?
  2. Are we getting a new National Hockey League arena out of it?

The answer to Question 1 is “$3 billion split between three levels of government.” The answer to Question 2 to is “Well, that depends…”

Let’s get this out of the way at the top: in the Draft Hosting Plan Concept, as presented to City Council, there is no brand-new 20,000 seat arena. For the hockey competitions, the bid concept involves utilizing the (at that point 43-year-old) Scotiabank Saddledome and a proposed new “mid-sized” arena of approximately 6,000 seats, located near McMahon Stadium in the bid’s “Foothills Cluster.”

The proposed arena would be #11 on the above map.

In City Council following the bid concept presentation, Mayor Naheed Nenshi expressed skepticism for a new arena of that size located in that area. The venue plan justifies it by linking it to the anticipated impending demise of the Stampede Corral – slated to be swallowed up by an upcoming BMO Centre expansion – and the end of the life cycle for Father David Bauer Arena and Norma Bush Arena near McMahon Stadium.

In terms of having a certain inventory of publicly available ice, adding a couple sheets makes a lot of sense. But having a 6,000-seat barn fairly far away from transit and the City’s proposed event and cultural district doesn’t tick a lot of boxes.

Naturally, discussion in council drifted towards the proposed new Calgary Flames arena and the Event Centre Assessment Committee, chaired by Ward 6’s Jeff Davison. So what would happen to the bid’s venue plan if that building came to fruition?

That makes a lot of sense considering that the two big ticket-moving Winter Olympic events are hockey and curling, and having a bigger second hockey venue could strengthen the economics of the bid. (The venue plan lists the curling venue as “TBD,” and BidCo CEO Mary Moran mentioned that they’re looking at a few options for that.)

For what it’s worth, there have already been some preliminary discussions of amending the draft venue plan. One concept reportedly being discussed includes potentially combining the Event Centre with the mid-sized venue, which would add to the inventory of publicly available ice and give the Flames their new barn.

And the biggest change for a potential bid is being touted as a new event centre that combines the plan’s proposed mid-sized arena with a new NHL arena for the Calgary Flames.

“If you’re going to have an event centre, why not have two arenas combined? You can save costs, with only one ammonia plant, but then also have two events going on at the same time,” said Jeff Davison, councillor for Ward 6.

Is there any money in the bid’s capital budget to build a new arena? Yes.

From the Draft Hosting Plan Concept document:

There is $403 million budgeted for the two new venues: the 6,000-seat “mid-sized” arena and the fieldhouse. Numbers accidentally released last fall by city council pegged the fieldhouse cost at roughly $272 million, which would leave roughly $131 million for the construction of the arena.

Given Mayor Nenshi’s comments, it seems like bid-wise everybody involved would be rather indifferent between that funding going towards the construction of a needed 6,000-seat arena by McMahon Stadium or a needed 20,000-seat arena in Victoria Park – they’ve ear-marked money in their budget for an arena, and the details therein don’t seem to be terribly important.

The last proposal publicized by the City – from July 2017 – was a three-way split of $555 million of arena construction costs:

  • $185 million from the City repayable in some way over some period of time (rent, property tax, or some other unspecified mechanism)
  • $185 million from a ticket tax, which the City indicated they were willing to put up in advance (due to their hefty credit score) and be paid back over time
  • $185 million from the Flames

Presuming the building cost hasn’t changed, putting $131 million towards a Victoria Park Arena would leave $424 million left to be paid for by some combination of the Flames and the City. Maybe the City would want the Olympic bid money to count as part of their contribution. Maybe it would be split up some other way.

The Olympic money wouldn’t be a magic bullet by any means – you’re still spending $555 million of somebody’s money – but potentially it could make things a wee bit more palatable and a bit less risky. How much less risky for which parties would need to be worked out, but that’s what negotiations are for.

Mayor Nenshi mentioned to us back in March that “there is a universe of options out there that are worth exploring.” The Olympic bid, as proposed earlier this week, would bring some outside funding sources to the table and broaden the options available to potentially bring the sprawling arena saga to an agreeable conclusion. But the devil, as they say, would definitely be found in the details of any deal.

  • freethe flames

    What I find interesting and frustrating about the information presented by the committee was their lack of understanding about the need for large arena; this is almost a must and will cost in the range of $700m -$1b.

    • calgaryfan

      I would think they are not building a new arena for the Flames unless the Flames come to the table with some cash. I would say this is just the start to draw the Flames into negotiations.

  • Parallex

    “Maybe the City would want the Olympic bid money to count as part of their contribution”…

    Of course they would… it’s city money. Seriously, paying for something out of money in your right pocket instead of out of your left pocket doesn’t meant that someone else paid for it.

  • TheWheeze

    Maybe I just have my head up my a@%, but it’s strange how all this money is suddenly found to host an Olympics, to build all these structures that may or may not even serve a purpose after the games are over, but for our Flames, a team that brings so much to the city, nothing.

    • Burnward

      This bid is actually pretty responsible. I’d be really surprised if this didn’t get some serious, serious consideration.

      That dirty, dirty federal money will certainly help too.

      • canadian1967

        It’s not like the Federal Government would actually send us some Money.
        Similar to Parallax’s comment above about left and right pockets. The Federal Government giving us (Alberta) any money is like if when the King sends out his tax collectors to take all your Gold Coins, the collector feels generous and lets you keep 1 of “your” 50 coins that you “owe” the King.
        (I’m referencing the Middle Ages, by the way, not Ken King)

        • Parallex

          That’s not quite what I meant.

          What I meant was the the feds and the province will give us money for the Olympics. That money has to pay for the Olympics so if we spend some of it to finance construction of a new NHL quality arena that just means that the city will be using more of it’s own contribution to the Olympic fund to pay for renos to the oval/max bell/McMahon/winsport, security, operations etc etc.

          That’s where the “pocket” analogy comes from. It’s all the cities money (contribution). The city ends up paying regardless of what pool of money it comes from because that just means that the city takes on a greater share of the other costs.

    • calgaryfan

      Why should the Olympic money build an arena for the Flames? There is money for an arena but the Flames do not want to pay their fair share. Maybe the Flames wake up and come to the table and negotiate something.

      • Styxx

        For clarity (not to incite debate) under the prior proposal put forward by the City, the Flames would 100% fund the a new $555M arena with 1/3 Flames cash; 1/3 ticket levy on Flames tickets; and 1/3 paying off a city-backed loan. Also the Flames would pay $30M to demolish the Saddledome, pay $5M per year property taxes, and pay for new arena maintenance and upkeep. The City would require they get to use the arena during Stampede (for free?).

        From a City perspective a repayable loan would be floated, they receive property tax on a piece of civic infrastructure, and get the cost of demolishing the Saddledome covered. But the big ticket is the “Flames” arena would be able to be used by CSEC/City to re-develop a new entertainment district plus other commercial and residential development worth billions to generate jobs and greater property taxes in future.

        So is this deal “fair”? Vote “Cheers” if you think the City deal is fair and should be supported. Vote “Trash” if you think the City deal is unfair to the Flames and should be “re-balanced”.

        • Parallex

          No, that first part is incorrect. under the last city proposal they (the city) would just give the Flames 185 million to build and own their own arena. Plain and dimple

          • Styxx

            – The City’s investment is repayable through different forms (eg property taxes etc). I wonder if other civic infrastructure pays property taxes eg libraries, city hall, suburban arenas, city-owned facilities?
            – The City’s investment pays for items which are not a responsibility of the Flames eg Saddledome demolition. Were new arena building costs tied to include demolition of PNE in Vancouver, Northlands Coliseum in Edmonton, Winnipeg Arena, Maple Leaf Gardens?
            – Were private sector partners restricted to only invest in the civic infrastructure (ostensibly built for the benefit of the City) and shut out of any spin-off commercial and residential directly arising from the development of the civic infrastructure (for the exclusive benefit of the municipal government)?

          • Parallex

            Styxx… any arena solely used by private for profit enterprise is not “civic infrastructure”. If the city wants to do a PPP with CSEC I’m fine with that… but as a partner we should see s financial benefit that equals the proportion of our investment in a private enterprise.

            Regarding the Saddledome demolition… ordinarily I’d actually agree with you, except that CSEC has apparently insisted on it’s demolition as part of any lease agreement. If CSEC is going to demand the city fo something that incurs a cost then CSEC should pay that cost.

          • Styxx

            Excuuse me…not a loan? The $$ the city are providing need to be repaid …the definition of a loan.

            And yes an arena is civic infrastructure …no different than Max Bell, McMahon, the library, etc. And CSEC (essentially a municipal corporation owned by the City) requiring demolition is arbitrary and selective.

            Your arguments would appear not to be based on fact, but instead on your emotional chant of “no money for billionaires”.

            NO ONE is looking to “gift” an arena to the Flames; however your dogmatic rant overlooks a realistic balanced agreement that considers the long-term interest of the City in terms of sports infrastructure, civic pride and quality of life. No to “gifting”…but also No to “zero investment”…

        • Parallex

          Wait…what? Paying property taxes is not paying back a loan. Seriously, if I go to my bank when my mortgage is up and tell them they forgot to deduct the property taxes I pay on my property from my mortgage balance owing they’d look at me like I had a turnip instead of a head. Likewise if I went back to the property company I paid rent to before I owned and demanded a 50% refund because they were renting at a rate that saw them actually recover their capital costs I’d be laughed out of the room.

          And CSEC is not a municipal corporation. They’re entirely a for profit entity. I think you’re confusing CSEC (Calgary Sports & Entertainment Corporation) with CMLC (Calgary Municipal Land Corporation)… it’s the Flames that are demanding the destruction of the Saddledome as a condition of any lease/funding agreement. As such the Flames should pay for it… I see no reason why the city should pay for the Flames to effectively have a monopoly on all large event hosting in the city.

          And an arena that serves to only service a single for profit entity isn’t “civic infrastructure”. None of the money made there would go to the city, the city would not control it’s operation, citizens can not walk into it during normal business hours free of charge, it doesn’t provide public services. In no way would it be “civic infrastructure”.

          All I want is a fair deal and a fair deal sees each partner in an endeavor get back a share of the proceeds equal to it’s share in the investment.

          • Styxx

            Yes re CSEC vs CMLC…was intending CMLC. My understanding was the City required the Saddledome to be demolished and included it in their proposal…the Flames did not include it in NEXT…why would they care?

            Re Property taxes vs ownership. Flames/CSEC does not want to own the building…they would rather lease for a reasonable rate rather than paying maintenance and property taxes. The City wants the Flames to own it as they’re better at managing events, etc.

            Like in Edmonton, the Flames instead want the City to own the arena and CSEC to develop the land around it to develop the entertainment zone and surrounding commercial/residential. This fits the traditional focus of public ownership for civic infrastructure and private entrepreneurs undertaking the risk/reward of new development.

            Instead the City is doing a power play of deciding where the arena is to be located, who it to own it (Flames), who is to pay for it (100% Flames excluding some LRT changes), and who is to benefit from the surrounding entertainment/commercial/residential development which centres around the arena (100% the City reaps all rewards through CMLC; 0% CSEC).

            This is a classic play by City hall bureaucrats looking to play entrepreneur even though history firmly shows government is lousy at it. And the bureaucrats want the Flames to pay and own for the Arena while they can reap 100% of the rewards from the surrounding redevelopment.

            It’s no surprise there’s no agreement …it’s a one-sided sham and lacks any fairness. These tactics by the City are one reason why Edwards wants out…it’s painful to endure. This logjam will not be easily broken …they either wait until a new mayor is elected or they build a new facility in Rockyview County …both choices are less palatable than reaching a fair agreement quickly that could support the Olympics but I don’t see any way out at the current time.

          • Parallex

            The Flames would care because the Saddledome would be a competing large event venue. They want the Saddledome demolished so that they become the only game in town as far as large capacity event booking is concerned. It’s the Flames that want the dome demolished.

            See… the problem is that the Flames don’t want to lease it at a reasonable rate. They want to lease it at a rate that would see the deed holder get only half it’s capital investment back… a reasonable rate would see the Flames pay rent at a rate that would at least see the asset return it’s upfront investment cost (I think most people would say that a true reasonable rate would see the investor get a bit of profit back but as it’s government I think that “break even” would meet the threshold of “reasonable”).

            As far as supplemental investment goes, the city put out an info sheet that very clearly said that the Flames made no commitment to build anything property tax generating around the arena.

            The city offered the Flames 150M in straight up cash/land and were willing to acquiesce to their demand that the city demolish the ‘dome. They were willing to do this precisely so that the city could have the arena in the district that the city preferred. If the Flames want all the stuff that you mentioned then they could have it tomorrow. They could control where the arena is, what get’s developed around it, they could make it as grandiose or as frugal as they desire… all they gotta do to have that is to build it on their own dime. But they don’t want to do that. They want to get all that stuff, have someone else pay for it, and not pay the property tax that every other ratepayer in the city pays. That’s not gonna fly.

            You’re right it is a one-sided sham that lacks fairness… you’re just wrong about the side that it’s one-sided for and who lacks the fairness.

    • Parallex

      By “all these structures” you mean… two? The only new structures in the bid are a mid-sized arena and fieldhouse. The fieldhouse will 100% serve a purpose after the games. I don’t know about the mid-sized arena (which folk are floating as an eventual replacement for the corral) but I assume that it would function as a public use complex.

      There is a giant difference between public use (accessible to citizen use) facilities and a private use facility (used by CSEC only).

  • redhot1

    Nenshi wants to be remembered as the mayor that hosted the olympics, instead of the mayor that built a new arena for the Flames. This is nothing more than a big ego boost. The olympics are a bloated mess, and the IOC is as corrupt as they come.

    Nenshi seems giddy to throw over 5 billion dollars into the Olympic money pit, but is the most shrewd investor out there when it comes to an arena for the Flames.

  • buts

    Dear Calgarians, I was born and raised here, the 88 games were a blast to be at, it made all Calgarians proud. I see so much wasted tax dollars on useless crap and the games will be the only way we can get all 3 levels of government to contribute to our aging behind the times infrastructure. Yes I am bias to sports as it gives the city pride, community and real bonding. The games were successful here ask anyone that volunteered how proud they were to where the Olympic winter jackets. This is the only way to get some of our transfer payments back and have the feds help build some affordable housing for the less fortunate and also have a legacy of fine sports venues that we need. I’m voting yes in November.

    • calgaryfan

      I was a resident in Calgary and was not a fan of spending all that money on the Olympics. I worked at various sites during the construction, as the games brought a lot of jobs. The games proved me wrong I was a proud Calgarian and glad the city had been the host. If I remember correctly the following years Calgary became a destination for tourists from around the world, bringing more money to the Calgary economy. Mr buts I agree with you and would be voting yes if I was a resident.

  • TheWheeze

    Last time I was in the Dome, was last season at a Sabres game. Building has had it. getting run down, looks like a Greyhound bus station. Sightlines at the upper tiers are wondeful, getting to look directly at heating and air duct ventilation right in your face.

  • Fan the Flames

    Calgary should run away from the Olympics much of the cost has little in the way of long term benefit . The 5.3 will be higher and when it is over the city will have the same infrastructure they had in 1988 . This makes Calgary Next look like a bargain.

  • Denscafon

    I don’t see a point in having a merged double arena facility idea. If the dome is used as the secondary rink and the new arena is built, there is no need for a new mid size arena at all. The idea of these combined facilities being great due to cost savings just make things much harder to actually pass as the process becomes way more complicated than needed. Even if you’re not a fan of the flames, a mid size arena literally helps no one after the Olympics other than beer leaguers. So if no new 20k seat arena is planned, the Olympic bid is dead imo.