[News Roundup] CSEC/City arena deal UPDATED: Third Party Facilitator

[Wormius]

Originally Posted by Manhattanboy

New mayor seems like a lovely business partner.

I hope it’s quashed, to be honest. Let them build it for themselves. The City gets the same crappy deal out of it either way, unless all of the economists are actually wrong and that arenas really do bring in loads of cash for anyone besides the owners.

[Locke]

Originally Posted by Manhattanboy

New mayor seems like a lovely business partner.

She doesnt want to be a business partner.

Thats part of the problem.

I understand that deals between Governments and Businesses are tricky, especially when it involves sports teams, but Governments are not in the Business of being in Business however that doesnt eliminate the need for either party.

The seeming irrelevance of the actual dollars points to this being a bit of a dick measuring contest, but that contest is being engaged in by both sides. Granted, some of that is likely also due to external factors.

Most likely this will all be sorted shortly and the ground will be broken more or less on time. Both sides will give a little and harmony shall be restored.

[Ozy_Flame]

Ruparell would be a fresh face to own a team. Plus he's also a Calgary millenial with business chops to boot. And as far as I can tell, he's open to the idea of community investment.

Would love to see new money in the Flames domain.

[Locke]

Originally Posted by Wormius

I hope it’s quashed, to be honest. Let them build it for themselves. The City gets the same crappy deal out of it either way, unless all of the economists are actually wrong and that arenas really do bring in loads of cash for anyone besides the owners.

Its not about the Economists being right or wrong. Economics is far from an exact science, but there obviously will be benefits for both parties.

Its the extent of those benefits that will be in question. Another problem is that these benefits for the public are difficult to quantify especially because in projects of this scale there are multiple ancillary off-shoots that occur over several decades.

[GioforPM]

Originally Posted by calgarywinning

Disagree. Have files.

So do I. And I can’t think of many big firms that don’t do CNRL/Edco/Flames work. Bennett Jones, Blakes, Oslers, Gowlings, NR, would all be conflicted.

This is something the city solicitors would deal with.

[Manhattanboy]

Originally Posted by Wormius

I hope it’s quashed, to be honest. Let them build it for themselves. The City gets the same crappy deal out of it either way, unless all of the economists are actually wrong and that arenas really do bring in loads of cash for anyone besides the owners.

Doubt that happens. No arena leaves a large hole in the City’s redevelopment plan for the area. There have already been several private deals based on the arena although I suspect most are conditional.

But given everything going on the public no longer has any patience for this. In the short term the reaction likely is no one cares.

Both sides are at fault but it seems the mayor could not wait to tweet as soon as she got off the phone with Edwards. Weird. Maybe she’s a bigger narcissist than both Nenshi and Edwards.

[Manhattanboy]

Originally Posted by GioforPM

So do I. And I can’t think of many big firms that don’t do CNRL/Edco/Flames work. Bennett Jones, Blakes, Oslers, Gowlings, NR, would all be conflicted.

This is something the city solicitors would deal with.

Three of those firms are already involved with this deal.

[Wormius]

Originally Posted by Locke

Its not about the Economists being right or wrong. Economics is far from an exact science, but there obviously will be benefits for both parties.

Its the extent of those benefits that will be in question. Another problem is that these benefits for the public are difficult to quantify especially because in projects of this scale there are multiple ancillary off-shoots that occur over several decades.

By which time a new arena will need to built.

It should be possible to look at other jurisdictions and point to quantifiable public benefits that have taken place since their new arenas were built. If they are really truly worth it, then sure. If there was payback of the City’s contribution plus more, then sure.

I don’t see how this current deal isn’t all icing for the CSEC and a giant pile of crumbs for the City.

[GioforPM]

Originally Posted by Manhattanboy

Three of those firms are already involved with this deal.

For whom though? And when working on a business deal it’s usually not hard to get a conflict waiver. Litigation is a different story.

The city is different - conflict rules don’t apply the same to such bodies.

[calgarywinning]

Originally Posted by GioforPM

So do I. And I can’t think of many big firms that don’t do CNRL/Edco/Flames work. Bennett Jones, Blakes, Oslers, Gowlings, NR, would all be conflicted.

This is something the city solicitors would deal with.

In terms of how the city will approach this or in terms of how dirty and unaccountable the city is?

They owe me about 20k from sheer negligence and made my life hell for two years.

[Manhattanboy]

Nm

[Manhattanboy]

Nm

[GioforPM]

Originally Posted by DinnerDog

Sue them for what? Asking to re-negotiate?

If anything, given that CSEC is now threatening to tear up the contract (if that happens), the City would sue CSEC.

Yeah, it’s unlikely that there’s actually been any fundamental breach sufficient to terminate the contract (on either side, since just the threat by Edwards wouldn’t be enough IMO).

If the City was offside in asking for more $$ the proper response would just be “no” and to carry on with the project, not picking up the ball and going home. And to get a court order interpreting any provision under dispute if necessary.

This is all posturing and won’t amount to much, I bet.

[GioforPM]

Originally Posted by calgarywinning

In terms of how the city will approach this or in terms of how dirty and unaccountable the city is?

They owe me about 20k from sheer negligence and made my life hell for two years.

Would deal with in terms of doing the litigation. Though IMO it will never come to that.

[sureLoss]

Csec's response:
https://www.nhl.com/flames/news/csec...re/c-329204382

In response to numerous media inquiries this evening, Calgary Sports and Entertainment Corporation ("CSEC") provides the following update to the citizens of Calgary regarding the Event Centre Project.

CSEC's primary objective in pursuing the Event Centre Project has been to provide Calgarians a first class facility with an entertainment experience, not only for hockey, but for other events including concerts, comparable to other major cities. However, at this point, it is clear that the City and CSEC have been unable to resolve a number of issues relating to the escalating costs of the Project.

Accordingly, 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.

When the agreements were first executed back in December 2019 the parties agreed to a cost sharing arrangement of 50%/50% with respect to the design and construction of the new Event Centre. In July 2021, with these costs increasing to $608.5 million, the City informed CSEC they were not able to fund their 50% share which, under the terms of the Project Framework Agreement, would have resulted in termination at that time. Instead CSEC agreed to fund a disproportionate share ($321 million to City's $287.5 million) and agreed to accept the risk of reasonable future design and construction cost increases related to the Event Centre in spite of our original 50%/50% agreement.

The most recent cost estimates place the total cost of the Event Centre at $634 million which means CSEC would be responsible for an additional $25.5 million of cost. The resulting cost sharing would have been $346.5 million for CSEC and $287.5 million for the City and, CSEC would continue to be responsible for further cost increases related to the construction of the Event Centre. Unfortunately, there are now $19 million of new cost items related to infrastructure and climate being insisted upon by the City for which they are seeking an additional $10 million in funding from CSEC.

While CSEC was prepared to move forward in the face of escalating construction costs and assume the unknown future cost risks, CSEC was not prepared to fund the infrastructure and climate costs that were introduced by the City following our July agreement and were not included in the $608.5 million and are not included in the current cost estimate of $634 million.

The failure of the City and CSEC to find a viable path forward was not based upon simply the "the last dollar" on the table; but rather was based upon 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.

In summary, the primary reasons for this difficult decision include:

1) Introduction by the City of significant infrastructure costs ($15 million) and climate mitigation costs ($4 million); costs not previously identified as project costs by CMLC or the City nor included in the $608.5 million target budget in July 2021.

2) Continued cost escalation experienced since the approved budget of $608.5 million in July 2021. It has since grown to $634 million based upon design development that was completed in October 2021.

3) High level of risk associated with future project cost increases in part due to supply chain issues and commodity price escalation as a result of the impact of COVID.

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.

We are deeply disappointed with the outcome.

[Locke]

Originally Posted by Wormius

By which time a new arena will need to built.

It should be possible to look at other jurisdictions and point to quantifiable public benefits that have taken place since their new arenas were built. If they are really truly worth it, then sure. If there was payback of the City’s contribution plus more, then sure.

I don’t see how this current deal isn’t all icing for the CSEC and a giant pile of crumbs for the City.

Well...when I said 'difficult to quantify' I really did mean it.

[calgarywinning]

Originally Posted by GioforPM

Would deal with in terms of doing the litigation. Though IMO it will never come to that.

I cannot tell you what I've faced with this group of people. They are shameful.

[GioforPM]

Shorter: It’s costing more than we thought.

[Wormius]

Originally Posted by Locke

Well...when I said 'difficult to quantify' I really did mean it.

Though it shouldn’t be. Either it was a good deal for the taxpayer or not.

[sureLoss]

Yeah I have a feeling that this deal is dead until construction costs come down.

Then maybe talks start up again.