Danielle Smith’s Arena Deal is Dead

Calgarians denied Smith a mandate for her arena deal

Image source: CBC

Danielle Smith asked Calgarians to “say YES” to her arena deal and give her a "clear mandate to proceed" by voting UCP as the centrepiece of her election platform in Calgary.

“That's why on May 29, I'm hoping Calgarians give our UCP government a clear mandate to proceed with this arena deal.”

-Danielle Smith (April 25th, 2023)

Danielle Smith made her arena deal the ballot question for Calgarians, however, Calgarians clearly denied Smith this mandate.

But when all the votes were tallied late Monday night, the majority of Calgarians voted NO to the arena deal both by popular vote (49% NDP to 48% UCP) and by electing more Calgary NDP than UCP MLA’s to the legislature (14 NDP MLAs to 12 UCP MLAs).

If anything is clear, Calgarians denied Smith a mandate to use public funds to build the billionaire Flames owners a new arena.


Source: CBC

This echoed a recent Leger Poll that found over 60% of Calgarians believed the government should fund more important things than a new arena.

 

Taxpayers would fund 97% of $1.2B capital cost

The Danielle Smith arena deal rejected by Calgarians proposed publicly funding 97% of the costs of a new $1.2-billion arena for the billionaire Calgary Flames owners. The deal, hatched behind closed doors, not only reflects a doubling of the previous budget but also a dramatic shift in responsibility for the upfront capital costs over to taxpayers.

Source Data: City of Calgary Planning and Development Services Report to Regular Meeting of Council - April 25, 2023, Table 1: Summary of the Financial Framework

 

Your taxes will go up to subsidize a new arena for billionaires 

According to University of Calgary economist Trevor Tombe, the $538-million capital commitment by the City of Calgary alone would be equivalent to a 2.4% increase to residential property taxes, or about $88 per year for the median homeowner. This calculation doesn't even include the $316M 35-year low interest loan to the Flames owners.

Source: Twitter.

 

Taxpayers will shoulder cost overruns and flood risks

According to the City of Calgary, Calgarians would be on the hook for most of the cost overruns should the new arena blow over budget yet again. This massively increases the financial risk for Calgarians since 100% of the project management for the arena has been handed over to the Flames ownership. Under the previous arena agreement, 100% of the cost overruns for the arena were the responsibility of the Flames owners.

Under previous agreements, the City of Calgary was also fully responsible for any flood damage to the arena, which is proposed to be built below grade in the Elbow River flood plain. The Flames owners refused to disclose the cost of the “big bill” to repair the flood damage to the Saddledome after the 2013 floods. It is not publicly known if taxpayers will be on the hook again to cover the “big bill” for flood damages under the new agreement. 

The site of the arena in East Victoria Park flooded extensively in 2013.

 

Billionaire Flames owners would receive 100% of the revenues

Details on how revenues generated by the new arena would be divided between the Flames owners and the City are not yet public but millions of dollars per year from ticket taxes, parking, naming rights, added corporate boxes, event booking and concession sales are up for grabs. 

The proposed arena deal would also see the billionaire Flames owners given special treatment for the development rights of four major land deals around the arena, which could be worth billions of dollars of business potential.

 

 

Map of area around new arena site showing surrounding new development sites. Source: City of Calgary.

 

No tax revenue uplift for the rest of Calgary until 2048

Since the new arena is proposed to be publicly owned, it would not generate any property tax revenue for the City. Furthermore, 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, after the Community Revitalization Levy (CRL) for the Rivers District expires. 

As demonstrated by the Saddledome and the sea of surface parking lots in East Victoria Park, arenas do not attract private investment.

The proposed billion dollar arena subsidy will have no added public economic benefit over the Saddledome given that there has not been much new development in the area for the last 30 years with an operating arena and convention centre. 

 

Lack of transparency

For an investment of over a billion dollars in public funds to benefit a private, for-profit sports franchise there is an unacceptable lack of transparency. Under the terms of the new deal, the City of Calgary was required to keep details of the agreement confidential until after the provincial election. The process behind developing this new deal was designed to engineer consent from City Council while shielding lopsided deal from public scrutiny.

 

No due diligence, cost/benefit analysis or public engagement

Neither the Government of Alberta nor the City of Calgary have produced any evidence of even the most basic due diligence on such a significant use of public funds to subsidize a private, for-profit sports franchise. To this date, there is no record of a cost/benefit analysis on publicly funding a new arena, or a comparison between the costs of a new arena or renovation/maintenance of the Saddledome. There are also no plans to engage the public on the costs of the deal.

Numerous peer-reviewed studies show there are no economic benefits to publicly subsidizing arenas and stadiums for professional sports teams. 

 

Other city priorities unfunded

City Council must engage Calgarians on the best use of the $1.2B in public funds. Numerous other important funding priorities will be put in jeopardy by tying up over a billion dollars from the City’s fiscal stability reserves just to build a new arena for the billionaire flames owners, including:

  • Affordable housing
  • Downtown Strategy
  • Arts Commons full expansion
  • Green Line Stage 1 (Shepard to 16 Ave N) potential overruns
  • Green Line Stage 2 (North leg from 16 Ave N to 160 Ave N)
  • Field house

 

TAKE ACTION

1) 📋Sign the petition!

City Council must respect the majority of Calgarians who voted NO to Danielle Smith’s arena deal.

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🤓Further Reading

Sign the Petition

 

We call on City Council to engage with Calgarians on the best use of the $1.2-billion in public funds before committing to an arena deal with the Flames.

 

Note: The name and first three characters of the postal code of the persons who sign this petition may be made available to the public if the petition is presented to City Council or Committee.

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