What went wrong with CalgaryNEXT?

With the City of Calgary officially calling the CalgaryNEXT proposal untenable, the Flames sports district project as it is currently envisioned seems dead in the water. What’s more, this outcome seemed inevitable given how completely CSEC had lost the PR war in the period between their campaign launch and the city’s rebuttal.

Regular readers here know I am fundamentally opposed to the public subsidizing major arena projects like this one, because the economics and risk associated them always overtly favour the team and not the taxpayer. Aside from flagrantly transgressing the principle of public dollars for public benefit, the CalgaryNEXT pitch had three fatal flaws that ultimately doomed it:

Let’s investigate each of these in more depth.

CalgaryNEXT solves all the Flames’ problems but merely creates new ones for the city.

Superficially, the choice of Calgary’s West Village is a strategic one. It’s the last area of downtown that is relatively blighted and it has enough space to fit two major structures like an arena and a fieldhouse. As such, it’s an obvious opportunity for CSEC to play the “revitalization” card out of the “public money subsidy” playbook. 

However, the Flames failed to fully consider why the West Village has remained fallow for so long. The main reasons being: creosote contamination and lacklustre infrastructure. These two factors ensure that any development in the West Village will encounter long latency periods and big costs up front on top of the regular expenses associated with building a new community. 

As a result, West Village has consistently been put on the back burner when it comes to downtown development in Calgary. If and when the city decides to redevelop WV, it will have to have a very clear and comprehensive plan of how it will all be accomplished in order to justify the associated costs. 

In addition, the city has set out particular urban redevelopment objectives in the MDP (Municipal Development Plan), a program that seeks to guide Calgary’s urban development over the next 50 years or so. The seven goals of the MDP include: building a prosperous economy, making complete communities, increasing density, improving transit and connectedness, becoming more environmentally friendly and more. As such, they want new communities and potentially iconic core areas to reflect all of the MDP’s key objectives.

Here’s the problem with CalgaryNEXT: though it pays lip service to some of these considerations, it doesn’t really take any them into account. In fact, not only does the Flames’ proposal not help solve any of these issues, it exacerbates them. 

Adding huge megastructures to the West Village that evoke big traffic spikes only complicates the already problematic infrastructure in the area. In fact, all transit, road construction and parking allotment would need to be designed around the arena and fieldhouse combination for WV to be at all functional. Given the size of the space in question, CalgaryNEXT would essentially become a huge blackhole in the centre of the community, skewing and bending all of the infrastructure development around it. Not to mention, it would soak up a lot of prime real estate that can no longer be leveraged to generate property taxes.

So instead of the city creating roads, transit and parking optimized for walkability, accessibility and mixed use, it would become a game of how to cram enough parking and major exit/entrance routes in the West Village to accommodate game nights. 

On top of all that, CSEC didn’t contribute anything towards the other major stalling points: creosote remediation and funding the fieldhouse. While the CalgaryNEXT proposal pointed out that solving these two issues would be a good thing, it didn’t say how, exactly, the city should do that. 

Obviously cleaning up the contaminated WV land is desirable. And it would be nice for the city to have a fieldhouse. But Calgary officials haven’t figured out how to pay for either of those things yet. And the Flames didn’t present any new options or ideas on the matter. 

Instead, CSEC positioned themselves as free riders on the benefits of creosote decontamination and fieldhouse construction. They wanted the remediated land (paid for by someone else) for their arena for free, the city to plan infrastructure around their sports district and also a fieldhouse built so the Stamps would have somewhere to play. Again, for free.

If the Flames had come to the city with a plan that addressed or at least helped solve any of the major pain points in West Village (and/or funding the fieldhouse), they likely would have found a much more attentive “negotiating partner” in the public. Instead, they pitched a project that obviously benefitted their organization in fundamental ways, but actually enhanced (rather than solved) the city’s major obstacles to WV and fieldhouse development.

The next fatal flaw in the CalgaryNEXT campaign was less about the steak and more about the sizzle. Although CSEC has supposedly been working on the arena project for many years, the subsequent vision they shared was altogether too vague to inspire anyone. Then they paired it with a huge price tag. 

Many of the buzzwords common to arena pitches were thrown around: “world class”, “revitalization”, “legacy”, “transformation”, “global leadership”, etc. but nothing in the CalgaryNEXT marketing material really shows how the district or the buildings were going to accomplish these things. There’s hand waving about saving money by combining the facilities together, some stock renderings of buildings and then a lot of doublespeak and broad promises.

“CalgaryNEXT will enable the completion and revitalization of Calgary’s urban core.”

“It will? Tell me more!”

“Because sports and events and stuff!”

Groan.

There is a very distinct flavour of “if you build it they will come” to much of the CalgaryNEXT marketing materials. The Flames didn’t articulate or illustrate much in the way of specifics about the facilities in question. They didn’t present a compelling plan or narrative for what the resultant community would look and feel like. 

It’s one thing to say it will be transformative. It’s another thing completely to show how. With the public unable to picture these benefits, the $1 billion price tag becomes rather unpalatable.

This one isn’t on the Flames, but it nevertheless played a major role in undermining their proposal. The oil price crash, rise in unemployment and evacuation of office space in downtown Calgary are all major political headaches for an organization asking to reach into the public’s pocket. Not to mention the election of a new provincial government that figures to increase taxes in the short term. 

Although the current environment lends itself to the Keynesian argument of stimulus spending by the government, the CalgaryNEXT project falls well behind other public infrastructure and community development like the Green Line LRT and the completion of East Village. 

As such, CalgaryNEXT is not only competing with the awkward optics of a well heeled private company asking for public dollars, but also with other major, public capital projects, not all of which are fully funded themselves. 

CalgaryNEXT may have been able to survive one of these factors had their pitch been suitably strong in the others, but not all three simultaneously. 

An area project that somehow solved one of the major issues in the West Village or bought the city a fieldhouse likely would have gotten over a few hurdles. Alternatively, if the Flames had creatively defined and shared an actually transformative vision of downtown Calgary (and not just called it that), they may have been able to get the public on board. And, of course, if the city’s economy didn’t suddenly tank in lockstep with their campaign launch they might have encountered people who would have been less agitated about a proposed $500 M handout.  

Unfortunately for the Flames, none of these things are true. CalgaryNEXT horribly complicates an already complicated situation in West Village, doesn’t present a clear or inspiring vision for the community and presents a giant bill to an anxious, cash poor public.