Flames intend to remain in Saddledome with 'no viable path' for new arena

The Calgary Flames are pulling the plug on a project that would've brought the city a new NHL arena.

The Flames announced late Tuesday night that the Calgary Sports and Entertainment Corporation (CSEC) and the city of Calgary have become unable to resolve issues surrounding the Event Centre Project that would have served as the team's new home.

"As the City and CSEC have been unable to resolve these issues, CSEC has determined that there is no viable path to complete the Event Centre Project," the statement said.

"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."

The announcement comes after Calgary Mayor Jyoti Gondek said earlier Tuesday that CSEC's primary shareholder Murray Edwards informed her of the franchise's intention to terminate the new arena deal.

CSEC and the city originally reached an agreement in July 2019 for an arena that would cost $550 million split equally between the two parties. The city was also to provide additional funds, including covering 90% of the cost to demolish the Scotiabank Saddledome. Gondek, who wasn't elected mayor until October 2021, said she supported the initial deal.

The project hit some snags from there. In April 2021, the City council put things on hold over budget concerns. They agreed to a new deal in July, with the cost increasing by over $50 million. Gondek, however, said she didn't support this.

Calgary Municipal Land Corporation was removed as the development manager as part of the new pact. Both the city and the NHL franchise added $12.5 million for cost overruns plus an additional $10 million from the city in event management costs. The two parties had set a target date of early 2022 for construction to begin before this most recent complication.

In the statement, CSEC pointed to the growing disparity in costs between itself and the city as the reason for the move, as the price tag had expanded to $346.5 million for CSEC and $287.5 million for the city.

Gondek claimed the Flames were backing out of the deal due to an additional fee of about $9.7 million concerning climate mitigation and road/sidewalk right-of-way issues.

"On a project worth over $650 million, to have one party walk away for 1.5% of the value of the deal is staggering," Gondek wrote, adding that she's "disappointed."

However, according to CSEC, the failure to find a way forward didn't simply come down to "'the last dollar" on the table but was instead based on the accumulated increase in CSEC's share of the costs, including the "infrastructure and climate costs, the overall risk factors related to the Project, and the inability of CSEC and the city to find a path forward that would work for both parties."

Before Gondek was elected mayor, she served as a city councilor and a member of the city's planning commission. Former Mayor Naheed Nenshi was in office during the original negotiation of the deal.

Scotiabank Saddledome has been the home of the Flames since 1983. Excluding the Seattle Kraken's Climate Pledge Arena, which underwent extensive renovations before the club debuted this year, the Saddledome is the second-oldest building in the NHL, trailing only Madison Square Garden.