Calgary Flames arena dispute: solar panels and right-of-way at the core

Friends, the Calgary Flames’ arena deal with the City of Calgary is not dead. But it’s also not quite alive at the moment either, as the two sides are at loggerheads regarding roughly $16-19 million in costs that arose from the development permit process.

Based on comments from Flames CEO John Bean on Wednesday, there appear to be two big sticking points: the cost associated with incorporating solar panels on the roof, and costs associated with sidewalk and road right-of-ways around the new facility.

While the costs that the two sides have cited vary, one that’s been consistent has been $4 million associated with environmental costs – notably and primarily solar paneling.

Roughly a month after officially becoming mayor, Jyoti Gondek and the bulk of council voted to declare a climate emergency. Whether you agree with the science or not – please let’s just not get into this right now – it’s consistent with a municipal government that’s had to deal with crazy flooding, September snowstorms and damaging hailstorms over the past decade. They’ve had to eat a lot of costs of dealing with these types of things, so it makes sense that they’d want to have a specific strategy.

One of their strategies is aiming to be carbon neutral in city-owned buildings – like the new arena – by 2050. Now, the addition of solar PVs in the new building makes the building carbon neutral by 2035, 15 years ahead of schedule. That’s cool! But it’s also kinda pricey, and the Flames (via Bean) are arguing that it’s not really a requirement of building right now so it doesn’t make sense for them to eat the costs for it.

Could there be a compromise arrangement like putting in lower-capacity (and cheaper) solar panels (or merely building in the capacity to add solar down the line)? Surely having the building meet environmental standards at (or ahead of) schedule makes everybody look smart and awesome, right? But is there a financial value you can place right now in looking smart 20-30 years down the line?

Simply put, right-of-way refers to sidewalk and road capacity immediately adjacent to the development. It’s not physically within the development, but you need to have road and sidewalk capacity to access the development.

Heck, these types of things are referred to as an Eligible Cost (and part of the overall project budget) within the project framework agreement.

The City is required to provide developers with basic functionality for sidewalk and road right-of-way, but any additional work needed for capacity or access – basically, anything fancy or unique required for the development – is usually on the developer and/or owner’s dime. (A unique quirk here: the Flames are the developer and the City is the owner.)

The broader transportation plan puts the onus on the City to facilitate egress from the area after games – the goal is 30 minutes for car exits post-event – and puts them on the hook for the upgrades needed to do so. But the immediate right-of-ways surrounding the facility sure do seem like they’re just a regular building cost, and one that the Flames would be on the hook for given that the City’s $287.5 million contribution to building costs is explicitly capped by the project framework agreement.

Friends, let’s just say that the City and the Flames come to an agreement that the City can help out with these two costs. Here’s the challenge: increasing the City’s financial commitment to the project would require council approval. And word is there’s not a ton of appetite on council to throw much more money (if any) towards this project with the laundry list of other priority areas that require public dough.

In other words: if these two groups can come to an understanding as to how this project could move forward, they’ll immediately need to turn around and convince council (and probably the public to some extent) that pushing a little bit more funding towards this endeavour is a prudent move.

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