Flames arena plans put on hold to resolve budget challenges

A design of the Calgary Flames new arena by the Calgary Municipal Land Corporation. (CMLC)

Plans to build the new home of the Calgary Flames are on hold.

One day after Tuesday’s closed-door meeting to update city councillors on the status of Calgary’s $550-million event centre, the project manager sent a statement to Sportsnet confirming plans have ground to a halt.

"At this early stage in the project, there is a difference in the current budget estimate and the program requirements for the facility," said Kate Thompson, president and CEO of the Calgary Municipal Land Corp. (SMLC), which is overseeing the project.

"Given the significance and importance of the project, the parties have jointly agreed to pause the project team to allow time to resolve these challenges. The decision to take this pause is the responsible and prudent approach to ensure we find the best solutions to move the project forward successfully, without incurring any additional costs on the project while these discussions progress. The team is working collaboratively to find a suitable path forward"

Calgary Sports and Entertainment president and CEO John Bean deferred all comments to CMLC.

Anyone who has ever built a house is familiar with the debate: the homeowner wants granite, but can only afford laminate. Negotiations ensue.

Such is where the Calgary Flames and the City of Calgary find themselves as the partners try to finalize plans to build the new arena a short stumble away from the 38-year-old Saddledome.

The joint project, which was a contentious election issue before it was ultimately agreed upon in December 2019, is bound to start getting political once again, as a municipal election is slated for the fall.

Whispers about the size of the shortfall prompted Thompson to address an issue they plan to keep largely in house.

"A lot of it is blown out of proportion," said one source who was in the meeting.

"There are lots of things they’re working on, but it’s called ‘project management’ and this is what happens. You have a scope and a budget and you have to match them up. The arena isn’t in jeopardy. There are things we are working through."

The joint project between the city and the Flames is supposed to break ground in August and is slated to be completed by the spring of 2024.

Amongst other things, the global pandemic has affected the process significantly, including the cost of steel and other materials.

"It’s not surprising there are these challenges, especially when you bring in the complexity of COVID and future projections required based on whatever post-COVID is," said Jim Peplinski, who resigned from the Flames last summer but sat in on initial negotiations alongside former team president Ken King.

"These are very difficult projects to predict accurately, so this is going to be a process. It requires competent, trusting people on both sides to find a solution that works."

The partnership, which took more than a decade to consummate, states the land and the building on the Stampede grounds will be owned by the city, but will be operated and maintained by the Flames for 35 years.

All cost overruns on the project, above and beyond those covered by a contingency fund, are to be covered 50-50 by the city and the Flames, or by scaling back on the plans.

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