A deal has been agreed that could lead to the development of a new C$550m (£336.2m/€374.5m/$418.6m) arena for the Calgary Flames, the third attempt to broker such an agreement in the past four years.

The Canadian NHL ice hockey team has played at the Scotiabank Saddledome since it opened in 1983, but has long been seeking a new arena. Talks over a new facility last broke down in 2017 amid wrangling between the city and the team’s owners, Calgary Sports and Entertainment Corporation (CSEC), over the financing of the project.

In January, it emerged that Calgary City Council would proceed with plans to develop a new arena after a road map was approved for future work on the facility and other infrastructure projects. This came after the Council moved to reopen talks with the Flames in October, a year after the team opted to exit negotiations.

The City of Calgary, CSEC and rodeo, exhibition and festival organiser Calgary Exhibition and Stampede (Stampede) yesterday (Monday) confirmed they have agreed to fundamental terms and conditions for the development and construction of a new public sports and entertainment event centre.

The agreement lays out the terms of a partnership that will see the creation of facilities to serve as public gathering places for significant events, attract world-leading performing artists and serve as a new home to the Flames, Western Hockey League team the Hitmen and National Lacrosse League franchise the Roughnecks.

In addition to the new event centre, the vision for the area adjacent to the facility includes a purpose-built outdoor festival space and infrastructure enhancements to Stampede Park, all of which are designed to serve as a catalyst for the development of Calgary’s Culture and Entertainment District.

The estimated cost of the event centre including the 19,000-seat arena is C$550m, which will be shared 50/50 between the City and CSEC. With its 50 per cent investment, the City will own 100 per cent of the event centre. CSEC will bear 100 per cent of the operating, maintenance and repair costs for the period of the 35-year agreement, committing the Flames to Calgary over this term.

The City will also receive a facility fee for the lifetime of the agreement and a portion of the event centre naming rights. In addition, value will be created for the City as a result of increased property tax revenue. CSEC has committed to provide local amateur sports organisations with C$75m in added funding over 35 years.

The Calgary Herald newspaper notes yesterday’s announcement of a C$275m contribution from the city exceeds figures previously mooted, but backers of the project said it will guarantee revenue to the city in future years.

The facility fee will reportedly amount to a 2% tax on every ticket sold at the arena for the lifetime of the agreement, which will result in a projected C$155m in revenue over 35 years. The share of naming rights is also estimated at C$2.5m over 10 years.

Calgary’s Mayor, Naheed Nenshi, said in a statement: “City Council and I had a set of principles that had to be part of any deal, including that any public money must result in public benefit. I’m very pleased that this deal achieves that. It’s a good deal for Calgary. This deal makes sense on its own merits and we believe it will help accelerate the redevelopment of East Victoria Park.”

The agreement has been formed through 14 months of review, analysis and consultation by the City’s Event Centre Assessment Committee, chaired by Councillor Jeff Davison. The Committee has determined the agreement meets the test of fitting the long-term goals of the City and City Council.

It is the culmination of years of discussion and negotiation between the City, CSEC and other partners. The project also aligns with the City’s Rivers District Master Plan and addresses the need to replace the Saddledome, which is the oldest active arena in the NHL.

Davison said: “After a prolonged period of stiff economic headwinds, Calgary is pivoting back towards growth. The 50/50 project funding arrangement and the ongoing revenue streams to the City and to Calgarians demonstrate the City’s commitment to risk sharing and fiscal responsibility.

“This project is an example of working with private partners to make long-term investments in needed public facilities.”

The agreement is subject to a seven-day public comment period and a vote of City Council on July 29, along with customary approvals by CSEC and the Stampede.

Image: Calgary Flames