Calgary mayor says citizens angry over arena deal can have say in 2021

Calgary Mayor Naheed Nenshi says if citizens aren’t happy with a deal to pay for half of a new home for the Flames, they can register their discontent come election time. 

“Ultimately, especially on an issue like this where the public is so split, we really do have to rely on our elected officials to just make a decision,” he told the Calgary Eyeopener on Wednesday. 

“And, you know, in 2021 we have the ultimate plebiscite.”

The deal, approved by city council on Tuesday, will see the Calgary Sports and Entertainment Corporation — which owns the Flames, Stampeders, Rougnecks and Hitmen — and the city each pay $275 million for the new event centre. 

The proposal was revealed last week and Calgarians were given seven days to provide feedback, although the deal was already approved by the Stampede and CSEC boards, and was essentially a take-it-or-leave-it affair. 

Council was told it was approved by those two organizations with the understanding that it was time dependent. That tight timeline was opposed by councillors Evan Woolley and Jeromy Farkas, who both asked for more time for engagement. 

The last election

Nenshi dismissed those concerns on Wednesday, saying this has been a topic of debate for years, and argued the last election also acted as a sort of plebiscite on a new arena. 

Although at that time, he was positioned in opposition to the Flames organization. 

In the lead up to that 2017 vote, Nenshi clashed with CSEC over a deal that fell apart just before the campaign.

On Wednesday, the mayor said opponents to the new deal ”needed to find a hook on which to oppose it” when questioned about the tight deadline for council to approve. 

One of those opponents outside of council is the Canadian Taxpayer’s Federation. 

That organization’s Alberta director says council has set aside more time for Calgarians to learn about smaller issues.

“You have potential changes to smoking and vaping bylaw, you have a bike sharing pilot program — both of these are relatively small initiatives that received greater scrutiny than a $300 million deal,” said Franco Terrazzano. 

“I mean, people take more time to decide what type of dog or what kind of cat they are going to bring home than Calgary councillors allowed for public scrutiny.”

Chamber support

That’s in contrast to another Calgary organization that tends to focus on the bottom line. 

The Calgary Chamber of Commerce commended council for the approval. 

“This project is not only going to create jobs and bring numerous economic benefits to Calgary, it is going to bring social benefits as well,” reads a statement from Chamber president and CEO Sandip Lalli. 

“It will significantly contribute to the revitalization of Calgary’s Victoria Park area and put our city back on the map as a destination for world-class entertainment, events, and tournaments.”

The event centre will neighbour a new expansion of the BMO Centre in East Victoria Park, an area that has long languished, but which is envisioned as a new culture and entertainment district nestled into the northern tip of the Stampede grounds. 

The new event centre is seen as a key anchor for that gentrification project, driven by the Calgary Municipal Land Corporation, which oversees development of the East Village.

Councillor concerned over land values

George Chahal, one of four councillors who voted against the deal, said he’ll be keeping his eyes on the land deals associated with the project and the details of the 35-year lease.

“I’m also hoping that once the valuations are completed, that the returns to the community and the public are shown with all the revenues and all the expenses that are a part of this deal,” he said.

At the heart of his concern is that updated appraisals and valuations on land that will, or could, exchange hands in the deal were not done prior to approval.

“If the Saddledome lands, for instance, have a higher value than the events centre lands, what is the transfer value? I want further clarification on that and what the return would be for Calgarians if that was the case,” he said.  

Chahal raised the issue in council on Tuesday and said he was “not comfortable with the answer” he got.

Also on the table is the option for CSEC to purchase other parcels for development, including the former site of the Enoch Sales House, which burned down in February.

Chahal wants to ensure proper accounting for those potential transactions and wants clarity on the point in time that valuations were placed on any parcel of land.

He said he likely would have supported the deal if his concerns had been addressed.

Return on investment

The city anticipates the arena will bring a return of 1.6 per cent on its investment over the course of the 35-year deal, but that’s only when indirect benefits like increased property taxes from area redevelopment around the project are considered. 

Without those indirect benefits, the city will net a negative return of 0.4 per cent.

Nenshi said when compared to if the money was left in the bank, the cost to the city is about $45 to $47 million if those indirect benefits materialize. 

“So the question we have to ask ourselves is over 35 years, is an investment of $45 million or $47 million in today’s dollars worth the intangible non-financial benefits of having this kind of event centre in place in that neighborhood?” he said. 

“And ultimately council said that makes sense.”

The deal was announced days after council cut $60 million from this year’s already approved budget, with cuts focused on affordable housing, public transit and the fire department. 

The city has promised extensive engagement during the design phase of the project, which could be under construction by the end of 2020.

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