Calgary's mayor says the Flames intend to pull the plug on the events centre deal, meant to replace the iconic Saddledome in Victoria Park.
At a press conference Tuesday evening, Mayor Jyoti Gondek said she spoke with Murray Edwards, primary shareholder of Calgary Sports & Entertainment Corp (CSEC), who informed her the events centre deal would not be going forward.
"I'm not exactly sure what is driving their position, but I can tell you that we have done our best to be accommodating and unfortunately, they're unable to proceed at this time," she said.
Earlier this year, it was revealed the controversial $550 million deal between the city and CSEC was as much as $60 million over budget. The arena is now projected to cost $608.5 million.
During the summer, both parties agreed to pay an additional $12.5 million for the arena, and that CSEC would cover any more cost overruns.
Gondek said since she was elected mayor late October, her office has been working with the Flames owners to mitigate any additional costs on the project.
After costs for climate mitigation, such as solar panels, and right of way issues for road and sidewalks were identified, new costs totalled $16.1 million.
The mayor said the city asked CSEC to contribute $9.7 million of that amount, in addition to what had already been agreed on.
"It appears that they're unable to make that financial commitment following the approval of their development permit, so it would appear that they are ending the deal," she said.
In a statement released late Tuesday, CSEC said because the two parties have been unable to resolve a number of issues relating to escalating costs, the corporation has decided there is no viable path to completing the arena project.
CSEC said it is not prepared to fund the additional infrastructure and climate costs, which it says were introduced by the city following the most recent agreement in July.
The corporation also cited financial risk associated with future cost increases that could be brought on by supply chain issues and commodity price spikes as a result of the pandemic for scuttling the deal.
"While not ideal for Calgarians nor competitively for the Flames, the people of Calgary should understand that nevertheless CSEC's intentions are to remain in the Scotiabank Saddledome," CSEC said in its statement.
No 'blame game'
Gondek said there doesn't need to be a "blame game" over the decision and that she is unaware how much else CSEC was seeking from the city in total.
"The deal that was struck in July of this year indicated that additional costs would be borne by Calgary Sports and Entertainment Corp. So according to that contract, the city can't come back with additional funding," she said.
The event centre project went before the Calgary Planning Commission in November, who approved the development permit. That was one of the final hurdles developers needed to clear before the start of construction, slated for January 2022.
The mayor said she is willing to further discuss the matter with CSEC.
"I know our administration is incredibly dedicated to this project as well. Unfortunately, the brakes have been put on it, and it is indicated by Calgary Sports and Entertainment Corporation that it's come to an end. So if there is more of a conversation to be had, certainly willing to engage, we will see.
In 2017, former Flames president of operations Brian Burke said the team could leave Calgary if a new hockey arena isn't built.
"You don't think we could find a place to go? With a straight face you're saying that. Let's see. Quebec. Oh yeah, they have a brand-new building that meets NHL standards," Burke said at the time.
Mayor Gondek said she is unaware what the circumstances are for the team at this time.
"The weight of this has been fairly heavy for all Calgarians, and we are just trying to process what happens next."