How does the proposed Calgary arena deal compare to the other Canadian buildings?
Photo credit:Sergei Belski-USA TODAY Sports
By Ryan Pike3 months ago
Near the end of April, a deal was announced to construct a new home for the Calgary Flames. The proposed project carries a $1.223 billion price tag and includes an arena, plazas, a community rink and a slew of roadwork and infrastructure upgrades in the Stampede Park area. It’s a big swing, and carries a big price tag… and a pretty large amount of public funds involved.
As we try to put the proposed Calgary arena deal in the proper context, let’s start in a pretty familiar place: Canada. How does this deal stack up against the six other buildings housing Canadian NHL clubs?
Vancouver’s metro population is 2.6 million, the third-largest in Canada. With the Canucks playing in the aging Pacific Coliseum, then-owner Arthur Griffins decided to build a new one to house both the Canucks and the soon-to-arrive Vancouver Grizzlies of the NBA.
The deal to build a new arena was great for the citizens of Vancouver; the entirety of the $160 million direct building expenses ($286 million adjusted for inflation) were paid for by Griffiths. However, the expenses of building an arena privately led to Griffiths taking on a partner in his ownership group, John McCaw Jr. The building broke ground in downtown Vancouver in 1993 and opened in 1995.
By 2000, the whole enterprise was losing money, so the Grizzlies were sold, spun off and eventually moved to Memphis. The Canucks and the arena were sold to Francesco Aqulini by 2006. The Canucks and the arena continue to be a pretty productive enterprise, and it seems like it was the expense of running the Grizzlies rather than the expenditure on the arena that led to the continued challenges.
Montreal’s metro population is 4.3 million, the second-largest in Canada. With the Canadiens playing in the beloved (but aging) Montreal Forum, the Molson family (owners of the Habs) decided to build a new facility.
The building was financed privately by ownership at an estimated price tag of $270 million ($476 million adjusted for inflation). The building broke ground in downtown Montreal in 1993 and opened in 1996.
There’s not a lot to say about Bell Centre. It remains privately owned and operated by the Molson family, and it’s a productive, busy building to this day.
Canadian Tire Centre
Ottawa’s metro population is just shy of 1.5 million.
Okay, so this one will be a bit messy. The Senators’ planned building in Kanata, an Ottawa suburb, was unveiled in 1989 during the expansion process. The building took awhile to actually come together – after an initial 1992 groundbreaking, the project didn’t actually start construction until 1994 – and the Senators began play in 1993 at the Ottawa Civic Centre. The arena eventually opened in 1996.
The $188 million of direct building costs ($331 million adjusted for inflation) was privately funded by team owner Rod Bryden, primarily via borrowed funds. (Original team owner Bruce Firestone lost control of the franchise in 1993 after missing a mortgage payment on the arena’s land.) Local government approval of the project was contingent on construction of a highway interchange to address traffic concerns, and only happened after the Ontario provincial government provided a loan.
One of the Firestone’s creditors went into bankruptcy in 2001 and the entirety of the loan debt was demanded during the bankruptcy restructuring, which the team didn’t have. That led to the team going into bankruptcy in 2002, and eventually the team and arena were bought by Eugene Melnyk in 2003 and everything was more or less settled on that front.
And after all that hassle, Ottawa ended up with a pretty nice arena in an inconvenient spot… and perpetual moaning, that continues to this day, about building a facility closer to downtown Ottawa.
Toronto’s metro population is 6.2 million, the largest in Canada. With the Maple Leafs playing in the beloved (but aging) Maple Leaf Gardens, Maple Leaf Gardens Ltd. (their parent company) decided to build a new facility.
The building was financed privately at an estimated price tag of $265 million ($448 million adjusted for inflation). The arena site was originally owned by Professional Basketball Franchise Inc., the owners of the expansion Toronto Raptors of the NBA. After a bunch of squabbling between the Raptors and Leafs’ ownership groups over competing arena sites – and a little bit after Raptors ownership broke ground on the new building in 1997 – the Leafs bought the Raptors and the partially-built arena, creating Maple Leaf Sports and Entertainment (MLSE), and the arena opened in 1999.
The building is still owned by MLSE, houses the Leafs and Raptors, and is equal parts busy and lucrative.
Canada Life Centre
Winnipeg has a metro population of 835,000, the smallest of Canada’s seven NHL markets. Looking for a new home for the AHL’s Manitoba Moose to replace the beloved but aging Winnipeg Arena, their owners decided to build downtown.
Building on the site of the former Eatons in downtown Winnipeg, the building was built for $133.5 million ($204 million when adjusted for inflation), with $40.5 million contributed by the local ($14.5 million), provincial ($14 million) and federal government ($12 million) and the other $93 million contributed by Moose ownership (who own and operate the building). VLTs were also installed in the facility by the province, with the team’s share of the proceeds helping to subsidize the building’s operations. Much of the government justification for their contributions was assisting in the revitalization of downtown Winnipeg.
Ground broke in 2003 and the arena opened in late 2004. The Jets arrived in 2011.
Edmonton has a metro population of just over 1.4 million. Looking to replace the aging Rexall Place, Oilers ownership sought a new building.
Rogers Place’s deal is pretty messy. The building ended up costing $483.5 million ($589.4 million adjusted for inflation). Of that, $226 million was funded directly by the City of Edmonton, another $125 million was funded via a ticket surcharge (levied by the City), and the rest of the funds ($132.5 million) was identified as being from Oilers ownership, via a combination of cash and lease payments. (For the sake of percentages, we’re counting the ticket surcharge as a City contribution and the lease payments as an Oilers contribution, as that’s how they were identified in the City of Edmonton’s literature on the subject.)
The project also included expenses related to the winter garden, the pedestrian corridor, the community arena, LRT connections and land. Including the larger project elements, the budget was $613.7 million ($748 million factoring in inflation), with government sources handling $444.7 million ($7 million federal funding via the gas tax, the remaining $437.7 million from city sources). Again, the justification for the public contributions was downtown revitalization.
How they compare to Calgary
Calgary’s metro population is just shy of 1.5 million.
On a project cost basis, the $1.223 billion price tag and $867 million of public funds for the Calgary project are… a lot. When you focus only on the arena building itself, that’s still $873.6 million total project cost and $530.8 million of public assistance for the project. On a percentage basis, tax dollars are covering 61% of the new building (and 71.6% of the broader project, with the road and infrastructure upgrades being the priciest parts).
When you look at Canadian buildings, they’re mostly privately sponsored – Vancouver, Montreal and Toronto were fully private, while Ottawa’s was fully private (albeit with the provincial loan for highway upgrades). The ones that haven’t been entirely private have still been mostly private. Edmonton – 72.6% of the building and 72.5% of the broader project – represents a massive outlier in this realm compared to the next-largest usage of public funds for an arena, Winnipeg’s 30.3%.
On a percentage basis, Calgary’s deal isn’t quite as hefty as Edmonton’s. And Edmonton’s deal has definitely helped make the area of downtown immediately around Ice District pretty snazzy. One can only hope that the proposed Calgary deal has that sort of positive impact in the downtown area, because it’s a pretty significant investment of public funds with that distinct aim.
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