Welcome To Total Ignorance Arena

The image to the left is the rendering for Scotia Place, Calgary's newest arena to house the Flames. Ground was broken on the building today as all the usual suspects were there: Alberta Premier Danielle Smith, Calgary Mayor Jyoti Gondek, and Flames executives. This is still one of the dumbest investments any province has made when it comes to spending public tax monies, and the $330 million committed to the project by Smith should see her cement her position as Alberta's most ineffective leader ever. With education, health care, and infrastructure all requiring some major investments at the provincial level, paying for a billionaire's new arena should win her a few more free hockey tickets when her time is up at the Alberta legislative building.

I'm not here to write Political Blog In Canada, though, so I won't mention how "61 per cent of the family doctors had been considering leaving the Alberta health-care system" in January or how half of Hinton, Alberta doesn't have a family doctor. Of course, when 250 education jobs are being cut due to budget constraints, it's hard to teach kids medicine, math, or anything else that they may need to succeed in society. Of course, there may be no society left soon with infrastructure projects such as "sidewalks, roads, underground infrastructure, water and wastewater" badly underfunded. But a new arena in downtown Calgary makes it all go away, right?

It's hard to imagine city employees using their heads for more than a hat rack as well, and it seems that Calgary Chief Administrative Officer David Duckworth fits that stereotype nicely, stating that the arena was "designed to be built on budget". I guess the city of Calgary operates in its own world since Montreal found out about overruns, Belmont, Massachusetts discovered overruns, Hamilton ran up costs, and Etobicoke finished with a higher price tag. But you do you, Mr. Duckworth, since this arena was "designed" to fall within the budget.

Rather than drone on about the all the shortfalls in Alberta that could use a $330 million investment, let's celebrate the new 18,400-seat arena that will host the Calgary Flames as the main tenant for as second before mentioning that "[t]he Flames will repay $316 million to the city in annual lease payments, but the city won't recoup this full amount until around 2060". For a cool $853 million, a budget-friendly building whose project management is entirely controlled by the rich men who own the Flames will be Calgary's newest landmark with the city of Calgary partly responsible for any and all budgetary costs above the initial price tag. Those same men managing the arena will have invested just $40 million of their own monies, so they may be able to afford a few overruns without worrying about shortfalls.

In the fine print of that $853 million price tag, you probably missed the part where David Duckworth's concerns about spending on costly projects had him saying, "There's no more big stuff. There is none." If there is none, how will Calgary pay for overruns?

"But Teebz, the Flames will pay property taxes for using the arena," you say, and this is where I grimace and ask "Will they?"

The city of Calgary actually owns the arena, and the city isn't paying itself any property taxes. According to Project Calgary, "the property taxes generated from any new developments in the Rivers District surrounding the new arena would not even begin to flow back to the City of Calgary general revenues until 2048", and we already know that most businesses surrounding an arena don't actually benefit from the foot traffic generated by the arena. Further to this, the Flames' control in running the arena will cease in 2049, so Calgary essentially operates at a half-billion dollar expenditure with virtually zero revenue generated for a quarter of a century.

Empirically, Calgary has negotiated a deal to reinforce all the statistics and economics about constructing arenas with no benefits for the city without even knowing it. That takes real skill considering there have been no cost-benefit analyses done on the new deal struck between the Flames and the various levels of government, and economic forecasts for this arena and entertainment district have risen from $550 million in 2018 to $631 million in 2021 to the current estimate of $926 million by the time the arena is finished in 2027. It seems like Calgary's answer to the Flames wanting a new arena is to spend whatever it takes to make that happen.

Do the Flames need a new arena? Arguably, yes as the Saddledome officially opened on October 15, 1983. It is the oldest arena used by any NHL team at this time, and it has shown its age over the years despite some renovations and touch-ups to keep it current. What's funny about the Saddledome's construction is that the cost was pegged at $80 million, yet the final bill came in at $97.7 million which makes me wonder if David Duckworth knows about his own city's issues with overruns when it comes to "no more big stuff".

Despite all the studies and forecasts and history proving that this deal might be one of the worst to ever be conceived in the history of major sports facilities, ground was broken on the new "Scotia Place" today. Calgary Mayor Jyoti Gondek, Councillor Sonya Sharpe, and Premier Danielle Smith all posed together with shovels for the cameras to commemorate the spending of over a billion dollars of public money while the Calgary Flames - the manager, main tenant, and primary benefactor of this new facility - enjoyed seeing 96% of the costs covered by someone else... assuming there are no overruns.

Does Calgary need a new arena? Yes, the city does, but it should be one where they profit from it more than the main tenant does. Scotia Place will likely have all the bells and whistles for it to be a state-of-the-art arena, but it seems more apt to call this new structure "Total Ignorance Arena" because of how terrible this deal is for the city of Calgary and the province of Alberta.

Until next time, keep your sticks on the ice!