The NHL’s Calgary Flames have pulled out of a deal to build a new arena in Calgary, Canada because of escalating costs.
The City of Calgary, Calgary Sports and Entertainment Corporation (CSEC) and the Calgary Exhibition and Stampede approved the fundamental terms and conditions for the development and construction of the new complex in 2019, but the plug has now been pulled.
The event centre was due to anchor a public festival street, attract world-leading performing artists and major events, and host an arena that would serve as a new home to the Calgary Flames, Hitmen and Roughnecks.
The cost of the C$550 million event centre, including the new 19,000-seat arena, was initially due to be split 50/50 between the City and CSEC. But CSEC said in a statement:
When the agreements were first executed back in December 2019 the parties agreed to a cost sharing arrangement of 50%/50% with respect to the design and construction of the new Event Centre. In July 2021, with these costs increasing to $608.5 million, the City informed CSEC they were not able to fund their 50% share which, under the terms of the Project Framework Agreement, would have resulted in termination at that time.
Instead CSEC agreed to fund a disproportionate share ($321 million to City's $287.5 million) and agreed to accept the risk of reasonable future design and construction cost increases related to the Event Centre in spite of our original 50%/50% agreement.
CSEC said the most recent cost estimates place the total cost of the Event Centre at $634 million which means CSEC would be responsible for an additional $25.5 million of cost. The resulting cost sharing would have been $346.5 million for CSEC and $287.5 million for the City and, CSEC would continue to be responsible for further cost increases related to the construction of the Event Centre. CSEC added:
Unfortunately, there are now $19 million of new cost items related to infrastructure and climate being insisted upon by the City for which they are seeking an additional $10 million in funding from CSEC.
While CSEC was prepared to move forward in the face of escalating construction costs and assume the unknown future cost risks, 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.
The failure of the City and CSEC to find a viable path forward was not based upon simply the "the last dollar" on the table; but rather was based upon the accumulated increase in CSEC's share of the costs, including the infrastructure and climate costs, the overall risk factors related to the Project and the inability of CSEC and the City to find a path forward that would work for both parties.
CSEC said its intentions are to remain in the Scotiabank Saddledome.
PSAM editor John Sheehan caught up with Yves De Cocker, Managing Director of PitchTecConcept, who explains how his company bridges the gap between sports organisations and the technology used in the playing surface industry.
The interview covers:
Yves 20+ years industry leading experience in the evolution of hybrid grass, trends he has noticed and some of the notable projects he has been involved with
The key reasons for Yves launching PitchTecConcept
Common mistakes often made with playing surface management
The steps he offers as a bridge between the industry and the end user
Advice to clubs looking to maximise their event calendars without compromising on the performance of their playing surface