Confused about Calgary's collapsed arena deal? City hall reporter Scott Dippel answers some FAQs

Since news broke that Calgary's arena deal would not proceed, a lot of questions have bubbled up about itshistory, the agreement details, what prompted its demise and what happens next.

Construction was supposed to start on the $600-million arena in Victoria Park in early 2022. But onDec. 21, Calgary Mayor Jyoti Gondeksaid she had been informed by the Calgary Sports and Entertainment Corporation (CSEC), which owns the Calgary Flames, that it would not be going aheadwith the project.

In the days that followed, the Flames owners indicated that rising costs and the risk that they would increase prompted them to back out, while Gondekhas said the CSECwas aware of these factors for months before its withdrawal.

And while Gondeksaid Wednesday the city will pursue other ways of getting the arena built, some councillors have indicated they would like to see the CSEC back at the table.

LISTEN | Calgary's arena deal has collapsed, so now what?

Calgarys mayor Jyoti Gondek discusses Calgary arena deal collapse

3 years ago

Duration 1:59

Calgarys mayor says there have been a lot of questions about the arena's costs.

City council is set to meet on Tuesday to discuss what happened and what's next, but if the project's history and rapid-fire updates have caused confusion, CBC Calgary's city hall reporter Scott Dippelhas some answers.

Dippel has been covering the story for years. Hespoke to host Judy Aldous on the Wednesday edition ofAlberta at Noonto providesome context.

CBC Calgary has distilledthat interview to answer some FAQs.

The following interview has beenedited for clarity and length.

Q: What did the deal look like before it collapsed?

A: It took years to get to an agreement being signed back in 2019. It's a very complicated deal.

The essence of that agreement was structured to be sort of a 50/50 split on a $550-million, new eventcentre.

The city was going to take on slightly higher costsbecause it would commit to demolishing the Saddledome afterwards you can't have two buildings that potentially might compete for a period of time.

But costs increased, and so last summer, the deal was amended.

It kind of went like this: In exchange for the City of Calgary putting up another $12.5 million in public money, the city also agreed that it would take out theCalgary Municipal Land Corporation, which was going to be the the project manager for the construction of this building.

The Flames ownership group signed on the dotted line saying, "If there are any costincreases beyond what is in this agreement, we will pay them."

Q: Why did thedealfall apart?

A: Apparently it's the cost of solar panels on the roof of this building that the Flames insist that they were not consulted aboutthey said the city just wanted to slap that on them at more than $4 million.

And then, there was the cost of sidewalks out front. And there is no specific reference in any of the arena agreements elements about who's going to pay what for sidewalks. It was assumed that this was part of the project.

The Calgary Municipal Land Corporationwas going to be working on a plan for the entertainment district this building was going to reside in, and we don't know who was responsible for what costs on that, because there's silence inthe agreement about this.

WATCH | CalgaryMayor Jyoti Gondek discusses Calgary arena deal collapse:

CSEC CEO, John Bean, says city insisted upon additional costs

3 years ago

Duration 1:12

Bean says CSEC was prepared to move forward, but not prepared to fund infrastructure and climate costs.

So, a $600-million-plus arena has apparently been bogged down over$10 million to $13 million.

However, the Flames ownership group has indicated it was aware there were other increasing costs that were coming, and problems with supply chains.

So that's why in December, they told the city, "Weare not in this game anymore. We don't need to do this deal. We're walking away."

And that's the end of it.

Q: "Scope creep"is aterm that we're hearing a lot thatthese were not considered cost overruns for the Flames groupbut an increase of the scope of the project. What would you say to that?

A: The climate resiliency of this building was something that had been talked about over the past year. There was a long list of climate initiatives that it was going to incorporate and that the Flames ownership group was touting.

The NHL has a green initiative, and this building was going to be in line with it.

And thenit's like, "Hey, wait, nobody told us we were going to have to pay for the costs of this."

WATCH | CSEC CEOJohn Beansays city insisted upon additional costs:

It gets even more entertaining, I suppose, because the mayor's response is that she's pretty confident that she can go to the federal and provincial governments and say, "Can we get some funding to cover the costs of these green initiatives?"

And it would ultimately cost the Flames nothing.

So, yeah, what are we arguing about here? It's really hard to pin down.

Q: We heard somecity councillorssay earlier this week thatthere's a feeling on council that they want to revive the deal. What do we know about that?

A: Well, the deal has been terminated. All work stopped back in December. Nothing more has gone forward, and the two parties are not talking to each other.That's what we're told.

So now the focus seems to have shifted to what's next.

Q: There have been some comments made that a neutral third party should step forward, and the mayor should step back.

A: I just want to say on that one andthat's been going around now since this thing started to unravel back in December that the mayor wasn't involved in the negotiations. And she's not a negotiator.

It's a deal that was last amended in July, and that was the deal that was on the table.

Q: The Saddledome is already paid for. Couldn't we just keep using it?

A: The state of the Saddledome is definitely a concern. And I think that if anybody thinks that we can just do nothing, and this building can just be left alone, it will be there for decades to come it's just not the case.

We did a story last year that basically spelled out that this building, which dates back to 1983, it needs upwards of $50 million of work before 2026 and that does not include the unresolved issue of the state of the roof of this building.

And I'm still trying to find out more information about the details of what is wrong with the roof of the Saddledome.

You have to remember,this is a very unique building.

To fix that roof, I've only heard solutions like:you can take the roof off and redo it. You might lose the building for two years. You can build a new roof around the building, which would take the external loads off of it and then you can try and find a way of disassembling the roof internally.

I wouldn't want to try and operate concerts and sports franchises while that work is going on.

The city is well aware of whatever the nature of the problem is that we can't find out about with the roof. They're aware this building has a finite lifespan, and the end is going to be in sight.

Q: What aboutthe Flames themselves? Is there a risk that they'll leave town?

A: They have 11 years left on their lease at the Saddledome, and we really don't have any answers in terms of their thought process of the future.

What happens if there's a major technical problem with that building? I don't know the answer to that.

Is the present ownership committed tostaying Calgary? All they'll say is, "We're committed to playing hockey, and our other properties using the Saddledome."

Are they planning on selling the team, moving the team? Nobody's talking about that.

So we really don't know why you would walk away from an agreement on a $600-million building hung up on some of these details, out of a fear of the future of other potential costswhen just five months agothey said, "Any additional costs, we got that covered.We just need your extra $12.5 million, City of Calgary."

Then: "OK, we're good to go."

Suddenly, a few months later, they're not involved in this agreement.

It's something that sort of leaves you with nothing but questionsand not many answers.