Gondek says Calgary Flames owners want to 'pull the plug' on arena deal – Calgary Herald

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Mayor Jyoti Gondek says the Calgary Flames ownership group wants to cancel the multimillion-dollar deal to build the city’s new arena.

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Gondek wrote on Twitter just before 6 p.m. Tuesday that she spoke with Calgary Flames majority owner Murray Edwards, who told her that the Calgary Sports and Entertainment Corp. (CSEC) intends to “pull the plug” on the agreement.

“I wanted Calgarians to be the first to know,” Gondek wrote. “I am as disappointed as all of you that this is the way things are ending.”

Plans for the new building have already been finalized, and a development permit — one of the final steps before starting construction — was approved last month.

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But there are a series of conditions that have to be met before the development permit can be released. Gondek said a little less than $10 million of additional costs related to road work, public realm improvements and climate change mitigation that are a necessary part of that process have become an insurmountable obstacle.

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“(Edwards) has tried his best to get his partners to keep moving forward with the event centre deal,” Gondek told reporters Tuesday evening.

“There was additional funding that had to be taken on by Calgary Sports and Entertainment Corp. It appears they’re unable to make that financial commitment, following the approval of their development permit. So it would appear that they are ending the deal.”

CSEC has not confirmed the news and did not respond to Postmedia requests for comment Tuesday night.

The city and CSEC initially signed an agreement in 2019 to split the $550-million cost of building the new event centre, as the city calls the facility, in East Victoria Park. Public money would also cover the costs of demolishing the Saddledome, while CSEC was additionally granted options to acquire two valuable parcels of nearby city-owned land.

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The agreement changed earlier this year after “budget issues” put progress toward construction on pause for several months. In the end, the cost-overruns provision of the deal was activated, which saw the city and CSEC both commit an additional $12.5 million.

The city-owned Calgary Municipal Land Corp. (CMLC) was removed as the project’s development manager so the Flames ownership group could hire someone of their own choosing, and they agreed to shoulder any further cost overruns for the new building.

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Council heard in the summer that the latest cost estimates for the event centre are around $608.5 million.

Gondek said it “appears” that CSEC would like the city to help cover the additional costs that have been identified.

“I do have to tell you that the deal that was struck in July of this year indicated that additional costs would be borne by Calgary Sports and Entertainment Corp. So, according to that contract, the city can’t come back with additional funding.”

She said the city has tried to ensure that it would pay for any roadwork that’s strictly its responsibility.

“I’m not exactly sure what is driving (CSEC’s) position but I can tell you that we have done our best to be accommodating and, unfortunately, they’re unable to proceed at this time.”

The mayor said she was “quite surprised” by the latest turn of events and she can’t say what might happen next. She added the city will have to “unpack” the legal implications of CSEC potentially walking away.

“I know our administration is incredibly dedicated to this project as well,” she said.

“Unfortunately, the brakes have been put on it.”

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