The City of Calgary and the Flames have agreed to a deal that will see a new $550-million arena built to replace the aging Scotiabank Saddledome, but splitting the cost with the NHL club is no win for Calgary.
Scotiabank Saddledome|Derek Leung/Getty Images
Even though they went out meekly in the first round of the playoffs this spring, the Calgary Flames scored a major victory in the off-season, one that deserves a banner in the new monument to the rich they are finally going to have built. Goodness knows the Flames deserve this, what with the hard work the team, enabled by NHL commissioner Gary Bettman, put into strong-arming the City of Calgary until it ultimately caved into the team’s demands.
Details of the deal between the city and the Calgary Sports and Entertainment Corporation became public Monday night and if this one were being scored at home, it would be a rout. The project to build an arena to replace the aging Scotiabank Saddledome will come in at about $550 million, with the City of Calgary putting up $275 million for the project.
That money for this grand venture will come from the city’s capital budget. On the operations side, though, it is expected to be announced Tuesday that the city is slashing its budget by $60 million, with $7 million of that coming from police and fire services and almost that much coming out of the transit budget. So Flames fans will feel a little less secure and have a little tougher time getting around in the next few years, but at least they’ll have a new arena. “The optics of this stink,” said Calgary mayor Naheed Nenshi, commenting on the timing of the announcements.
That’s not all that stinks. After holding firm and refusing to go above $185 million for the project throughout much of this process, Nenshi and Calgary’s city council folded more quickly than the Flames did after they took a 1-0 lead on the Colorado Avalanche in the first round. For the past couple of years, Nenshi had talked an excellent game when it came to dealing with the Flames and seemed like one of the few politicians in the world who would be ruffled by the home team taking a page directly out of the sports team owners’ playbook. He didn’t seem the least bit ruffled by the enormous amount of saber-rattling done by the likes of Brian Burke, Ken King and Bettman, nor was he fazed by their doom-and-gloom threats.
But in the end, Calgary city council increased its stake by $70 million, which is $10 million more than those budget cuts that were mentioned previously. So the Flames win, the way sports teams always do in these situations. The Flames openly campaigned against Nenshi in the last municipal election and it probably had an effect. In 2013, Nenshi took office by capturing more than 73 percent of the vote. Four years later, he was expected to win in another landslide, but took just 51 percent, with 44 percent of the vote going to a candidate who was more team-friendly than Elias Lindholm’s contract.
So now the city is trying to sugarcoat this deal to make it look as though it’s a win for the taxpayers. It is not. The Flames are owned by a group of five people, two of whom have a net worth in excess of $2 billion. But the Flames stuck their arms out as far as they could and you can’t really fault them for doing that. Shortly after the deal was announced, the city pointed out that the economic gains for residents would amount to more than $400 million over the 35 years of the deal.
Well, a couple of problems there. First is that amounts to just over $10 million a year, which is a drop in the bucket for a city the size of Calgary. The second is that most university economics students can tell you this is a shell game. The city is not creating something out of nothing here. There is a Saddledome – albeit a decrepit one in need of replacement – that still exists. The hockey and entertainment dollars spent by Calgarians still flow thorough there. By building a new mecca a couple of blocks away, you’re simply relocating those dollars, not creating new ones or more of them.
Everyone agreed the Saddledome needed to be replaced. What was a state-of-the-art building for the 1988 Winter Olympics had quickly become a run-down dump, with way too little room for decent concourses, a building that severely limited the Flames’ abilities to increase revenues. But this was almost too easy for the Flames. They’re going to get their new building and the city is going to pay for half of it. When you look at it, basically going to war with the city was worth it. And now, emboldened by what he has seen, don’t be surprised if Eugene Melnyk continues to spar with the City of Ottawa. And be even less surprised if he ultimately wins.
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