Patrons of new downtown arena will help pay CSEC's obligations

Scott Dippel · CBC News

· Posted: Mar 31, 2025 8:00 AM EDT | Last Updated: March 31

People buying tickets for events astatine Calgary's caller downtown arena volition beryllium the ones covering a important information of the project's cost.

The agreements betwixt the City of Calgary and the Calgary Sports and Entertainment Corporation (CSEC) — which owns the NHL's Calgary Flames — spell out the fiscal obligations of the parties. The metropolis is spending $853 cardinal of the lawsuit centre block's $926-million cost, CSEC is providing $40 cardinal up front, portion the state is contributing $33 cardinal for the arena.

The metropolis has touted the information that CSEC has agreed to marque $17-million yearly payments for 35 years, which escalate by 1 per cent each year.

However, the arena agreements show the metropolis is not lone creating a 9.5 per cent taxation for each summons sold successful the caller Scotia Place, it's besides allowing CSEC to usage $10 cardinal of gross from the city's taxation to wage its contractual obligations.

Over the people of 35 years, CSEC has agreed to springiness the metropolis a full of $708 cardinal for these payments.

Different payments

The $17-million yearly escalating payments really dwell of 2 elements: a $7-million rental interest and a $10-million installation fee. The metropolis has agreed that CSEC tin usage wealth collected done the city's summons taxation to screen the installation fee.

That means perchance $278.3 cardinal of CSEC payments to the metropolis implicit 35 years could really travel from CSEC, with the remainder of the wealth it owes coming from summons taxation revenue.

Michael Thompson, the city's wide manager of infrastructure services, said the city's absorption was connected realizing a repayment of funds, considering however overmuch wealth it is spending connected the facility.

But the metropolis was besides prioritizing the fiscal returns from the improvement of a overmuch bigger task than conscionable the arena, helium added, including the instauration of an amusement territory with caller businesses and the improvement of respective parcels of metropolis onshore astir Scotia Place.

"We're going to get our wealth back," said Thompson. 

"We are going to get wealth backmost from the improvement astir the area, and past arsenic the country develops out, we'll make (property) taxation revenue."

City comfy with arrangement

When asked if helium had immoderate concerns astir the optics of however CSEC is being allowed to usage the city's summons taxation gross to screen its obligations, Thompson said the metropolis is comfy the the mode the woody is structured.

He pointed retired that if thing successful the aboriginal interrupts the travel of summons taxation gross — for example, if determination is an NHL labour quality oregon a pandemic that prevents nationalist gatherings — CSEC would inactive beryllium obligated to marque its yearly payments to the city.

Jeromy Farkas, a erstwhile metropolis councillor, has been a vocal critic of the arena deal's structure.

He maintains that nationalist wealth volition beryllium liable for paying 96 per cent of Scotia Place's costs, which CSEC volition run and turn profits from for decades to come.

Farkas, who is moving for politician successful this fall's municipal election, said portion the city's 9.5 per cent summons taxation volition beryllium paid by the building's users, CSEC should not person been permitted to usage that wealth to screen its obligations to the city.

"CSEC cannot instrumentality recognition for the radical walking into the gathering and paying a tax. That is specified a ridiculous statement to make," said Farkas.

"This truly highlights that I don't judge that medication nor metropolis assembly understands the agreement."

No deception

Under the presumption of the arena agreement, immoderate summons taxation gross supra $10 cardinal — which CSEC tin usage to wage the metropolis — indispensable spell into a money to assistance screen the attraction costs and Scotia Place upgrades successful the future.

Farkas doesn't deliberation determination was immoderate effort by the metropolis to deceive Calgarians astir the operation of the deal, but helium would similar greater transparency astir however overmuch the summons taxation volition rise connected an yearly basis. 

He suggested that metropolis councillors should request those details are made nationalist implicit the beingness of the agreement.

Ward 1 Coun. Sonya Sharp said the metropolis hired a negotiator to scope the arena woody with CSEC, and that assembly was briefed connected its contents.

Council voted unanimously successful favour of the deal.

She said it is due that radical who volition spell to the arena should assistance wage the outgo of the building, likening it to fees that aerial passengers wage for utilizing airports successful Canada.

Sharp, who chaired council's lawsuit centre committee, said she understood the specifics of however gross from the city's summons taxation could beryllium utilized by CSEC. However, she agreed that the metropolis could beryllium clearer astir explaining the good details successful the arena's financing arrangements.

"The communicative could person been explained a small spot better. The connection connected it could person been better," said Sharp.

The arena agreements besides specify that aboriginal spot taxation payments related to the arena tin beryllium utilized to repay $27 cardinal of CSEC's archetypal outgo of $40 cardinal to physique Scotia Place.

Construction connected the arena started past year, and the gathering is acceptable to unfastened by fall 2027.

The metropolis said Scotia Place is presently connected clip and connected budget.