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After financial agreement, work resumes on new Calgary arena

With the owners of the Calgary Flames (NHL) agreeing to cover all cost overruns, work has resumed on a new downtown arena to replace the Saddledome.

With the news that cost of the new facility was potentially $60 million over the original budget of $550 million, work was halted while Calgary Sports and Entertainment Corp. (CSEC), owner of the Flames, and the city worked out the finances. Both sides agreed on a rise in the budget to $575 million, but the hard work was to come: covering other overages. Value engineering came into play, as well as other potential facility cutbacks. But at the end of the day, CSEC agreed to cap the city’s portion of the funding and covering additional costs; in return, the city is giving the Flames more of a say on project management, per the Calgary Herald:

As a result, CSEC agreed to take all the additional cost overruns, capping the city’s funding for the building itself at $587.5 million. But the city is also agreeing to let the organization hire its own development manager, while the city’s arm’s-length development authority Calgary Municipal Land Corp. will no longer oversee the project.

CSEC’s facility fee will also increase from eight percent to nine and a half percent for non-sporting events to help cover the extra costs. The city’s two percent share won’t change.

All in, the city’s costs add up to $312.9 million, including the event centre capital costs, the bill for demolishing the Saddledome and up to $10 million for other work such as flood mitigation. The 2019 deal also provided CSEC land options in the area, on top of the land where the event centre will be built.

The City Council approved the new terms yesterday. That allows design work to resume, with construction beginning in January.

The rendering above, by the way, is still a conceptual one; actual renderings for a final design are expected soon.

Conceptual rendering courtesy City of Calgary.

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