The cost of a new $550-million arena would be split between the city and the owners of the Calgary Flames, with the city retaining ownership of the new building in Victoria Park.
According to the terms of the proposed deal — which will have to be ratified by a vote of council next week — the Flames will carry the operating and maintenance costs for the new facility for the duration of a 35-year agreement.
The $275-million cash contribution from the city exceeds amounts discussed in previous rounds of negotiations in 2016 and 2017, but proponents point out the deal would also provide revenue to the city in future years.
Under the proposal, the city would collect a “facility fee,” a two per cent tax on every ticket sold at the arena for the lifetime of the agreement, amounting to an estimated $155 million in revenue over 35 years.
The city would also receive a share from the naming rights for the new building, equivalent to an estimated $2.5 million over 10 years.
“Let’s cut to the chase. This is a good deal for Calgary,” Mayor Naheed Nenshi said Monday evening. “For some years now, I have been saying that any investment of public money in this project must come with public benefit. This deal does that.”
Calgarians will have seven days to digest the proposed deal and offer feedback before July 29, when council is expected to vote to either ratify or reject the agreement.
The agreement would ensure that Calgary Sports and Entertainment Corp. will not relocate the Flames for the duration of the 35-year term.