Flames arena deal officially dead after New Year's Eve deadline passes

The Calgary Event Centre Project, which was to include the future home of the Calgary Flames, is officially dead.

With neither the Calgary Sports and Entertainment Corporation — the parent company of the Calgary Flames — nor the City of Calgary waiving construction conditions on the Project Framework Agreement prior to December 31, the project and all associated agreements were terminated.

“We have always believed that Calgary needs a new Event Centre” John Bean, President and CEO of Calgary Sports and Entertainment Corporation, said in a statement released Tuesday. “However, under the current circumstances we do not see a path forward that would create a viable partnership with the city, which is essential for a new Event Centre to become a reality.”

Calgary Mayor Jyoti Gondek took to Twitter two weeks ago to announce that Flames owner Murray Edwards informer her of “the Flames intention to pull the plug on the Event Centre deal.”

1/6 Today, I spoke with Murray Edwards, primary shareholder of Calgary Sports & Entertainment Corp (CSEC), about the future of the Event Centre project.

He informed me of the Flames intention to pull the plug on the Event Centre deal.

Why? Here’s what I know:

— Jyoti Gondek (@JyotiGondek) December 22, 2021

The Flames then responded by issuing a statement.

“While CSEC was prepared to move forward in the face of escalating construction costs and assume the unknown future cost risks,” reads the statement, “CSEC was not prepared to fund the infrastructure and climate costs that were introduced by the City following our July agreement and were not included in the $608.5 million and are not included in the current cost estimate of $634 million.”

When the project agreements were first executed in December 2019, the City of Calgary and CSEC agreed to a cost sharing arrangement of 50/50 with respect to the design and construction of the new Event Centre, according to the statement.

The agreement was reworked in July 2021, and CSEC agreed to fund a larger share ($321 million to the City’s $287.5 million) and accepted the risk of reasonable future design and construction cost increases related to the Event Centre in exchange for greater control of the project.

Recent estimates place the total cost of the Event Centre at $634 million, which would result in CSEC being responsible for an additional $25.5 million. According to CSEC, there were also $19 million of new cost items related to infrastructure and climate being insisted upon by the City, for which they were seeking an additional $10 million in funding from CSEC.

Neither side could come to an agreement on the extra funds, resulting in the collapse of the project.

The Flames have 11 years remaining on their lease with Scotiabank Saddledome.

It is the second-oldest building in the NHL at 39 years. Madison Square Garden is older, but did undergo an extensive $1 billion renovation from 2011-2013.

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