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Victoria Park Event Centre FAQs

​​​Frequently Asked Questions about the east Victoria Park Event Centre​

Last updated: July 27, 2019, 10:31 A.M.

Cost


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The City of Calgary remains committed to the economic recovery of our city on behalf of citizens, communities, businesses and customers. We continue to reduce the cost of government while investing in the future of Calgary.

The Event Centre is more than an arena. The Event Centre is a catalyst for attracting private sector investment into the area and the development of under-utilized lands.

The Event Centre itself leverages 50/50 private and public investment to spur additional private investment in the area.

This project is a key pillar for putting Calgary back on a favourable trajectory for future growth and prosperity and will provide significant direct and indirect benefits to Calgarians. The Event Centre contributes to outcomes identified in the Downtown Strategy, is a key component to Council’s update to the Economic Strategy for Calgary approved in June 2018 “Calgary in the New Economy”, and is critical to realize the vision of east Victoria Park as a Culture and Entertainment District that will add to the cultural vitality of our city.​

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The investment of $275 M includes capital budget funding​ primarily from the Major Projects Capital Reserve over the three-year design and construction period.

There will be no municipal property tax rate increase to fund the Event Centre and funding it does not impact the business tax relief program approved at the June 10, 2019 Special Meeting of Council.​​

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Indirect City project costs are estimated at $15.4 M (exclusive of any land transfer value):

  • Saddledome demolition: $12.4 M – City portion
  • Transaction costs: $3 M
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Rogers Place was built for $483.5 M. The Katz Group paid $132.5 M., $112.8 M of the contribution paid to the City of Edmonton as rent over 35 years, and to cover the City’s principal and interest costs. The remaining $19.7 M will be paid as cash. 

The City of Edmonton’s contribution of $226 M to the building includes funding through a Community Revitalization Levy, new parking revenues, and redirecting the current Rexall Place subsidy. An estimated $125 M will be collected through a ticket surcharge.​

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To calculate the returns to The City, an Internal Rate of Return (IRR) calculation was performed to determine the City’s return on its investment over the life of the project. An IRR calculation reflects an annualized rate of return of an investment based on when project costs are incurred and when cash is received over the life of the project. IRR calculations reflect the time value of money as they consider the difference between cash flows spent or received in year one versus cash flows spent or received in year 35.

The City has made assumptions in its financial analysis, as would be expected for a 35-year investment. The City believes these assumptions are reasonable and are based on the best available information at the time.

Project returns to The City are on page 24 of this Council presentation. The project generates a negative rate return of -0.6% if only direct returns are included and a positive rate return of 1.4% when considering both the direct returns and indirect returns.

This analysis does not reflect the important social benefits (or costs) or other intangible factors. Nor does the analysis consider the returns associated with alternative scenarios, including any cash inflows from a possible secondary facility.

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The City’s cash flow analysis contemplated inflation.

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The design and budget of the Event Centre will be a gated process in which the mutual agreement of both The City and CSEC will be required for each stage of the process.

Changes outside of the approved design that are requested by only one of the parties will be the sole responsibility of that party and all costs are to the account of that party. Except for portions of the Event Centre designed at the request of only one of the parties, it is the intention that any cost savings or cost overruns would be shared by The City and CSEC on a 50 / 50 percentage basis.

CMLC will oversee design and construction as the development manager for the project. CMLC is confident about its cost projections. Cost estimates have been reviewed by two construction firms and a cost consultant.

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Timing


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Without an Events Centre, The City’s plans to revitalize east Victoria Park and the Rivers District will be altered to reconsider the urban plan and mixed-used development in the district.

A January 2019 Economic Impact Assessment of the Rivers District Revitalization report by Ernst & Young LLP states the social, cultural, connectivity, economic and reputational impacts to Calgary would be significant.

  • The Saddledome has served Calgary well but is aging. The cost of replacing it will increase.
  • Loss of this deal that provides 50/50 capital cost share, long term tenancy and 100 per cent operating, maintenance and repair costs (other than major structural repairs).
  • Property tax revenues due to future development lost or delayed.
  • No further access to Community Revitalization Levy uplift if there isn’t redevelopment in the east Victoria Park area.
  • Calgary will lack a venue large enough to host cultural, entertainment and amateur and professional sporting events.
  • Loss of cultural, social and entertainment opportunities.
  • Impact to City reputation as a good place to do business and visit.
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The efforts of the Event Centre Assessment Committee have been ongoing since May 2018. The discussions and negotiations were completed under the Council-approved framework referenced above.

The agreements are subject to Council approval. The transaction being considered involved more than four months of extensive negotiations between The City, CMLC, CSEC and the Stampede. The parties have reached agreement on all material deal terms and The City negotiating team is recommending to Council next week that The City move immediately to negotiate definitive agreements. A timely decision by Council in support of the agreements is critical to allow the parties to begin the significant efforts and commit the necessary capital to proceed. If there is a delay, there is no assurance that the three parties will be able to continue to honour the deal that is on the table.

Council previously approved several plans to guide the development of the Rivers District. 

Slide 4 of the public presentation made to City Council on July 22, 2019, includes a chronology of significant milestone dates. The report, attachments and presentation are available under the Event Centre report to Council section at Calgary.ca/eventcentre.

Additionally, CMLC completed extensive engagement through Rivers District Master Plan engagement. The future Event Centre site was included as part of the overall District vision presented to citizens. The Rivers District engagement was supported through extensive promotion, both paid and earned media, for over 100 days of active engagement. Since the formation of the ECAC, the public has been informed of the process through open public sessions that have detailed the progress of the committee. 


Benefits


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  • Public and private dollars are being invested in a facility owned by The City and will provide a return on investment.
  • The Event Centre will offer indoor space for concerts, entertainment, large assemblies and sporting activities. It will also act as an anchor for a vibrant festival street that can host a variety of festivals and community events
  • The centre will offer a mix of venues including bars, restaurants, retail outlets and entertainment venues.
  • The Event Centre will replace the Saddledome, which was built for the 1988 Winter Olympic Games. It has served Calgary well but is ageing.
  • The Event Centre is a catalyst for attracting private sector investment into the district and the development of under-utilized lands.
  • It is a key pillar for putting Calgary back on a favourable trajectory for future growth and prosperity and will provide significant direct and indirect benefits to Calgarians.
  • The Event Centre contributes to outcomes identified in the Downtown Strategy, is a key component to Council’s update to the Economic Strategy for Calgary approved in 2018 June “Calgary in the New Economy.”
  • The centre is critical to realize the vision of east Victoria Park as a Culture and Entertainment District that will add to the cultural vitality of our city.

Social and community benefits

  • A majority of event centre users and non-users agree that sports teams generate civic pride for their city (Groothuis, Johnson & Whitehead, 2004)
  • Civic pride, reputation and image created by sports teams are important factors for a city’s overall development (Swindell & Rosentraub, 1998)
  • Social impact - communal experience, pride and sense of belonging, identifying with a local team, enthusiasm when a major sporting event is held in your hometown
  • Community visibility and image impacts - benefits from the city being associated with a major sports team/facility (increases a city’s visibility and image)
  • Developmental impact - the redevelopment of the area immediately surrounding the sport facility district. (Grieve & Sherry 2012)
  • Professional sports organizations have recognized the importance of drawing new Canadians to their teams as fans, both in the stands and at home watching television (Institute for Canadian Citizenship, 2014)

Sport and recreation contribute to:

  • Community health and wellbeing
  • Confidence-building and empowerment
  • Social integration and cohesion
  • National and cultural identity
  • Reduction in crime and vandalism (Grieve & Sherry, 2012)
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The EY Economic Impact Assessment (along with literature reviews) looked at the social benefits associated with the Event Centre. While harder to quantify, social benefits such as the development of the ‘experience economy’ where individuals can live, work and access entertainment within close proximity, contribute to the overall development opportunity.

Social benefits can also have a broader impact in the areas of:

  1. Cultural development – improving Calgary’s reputation as a city of choice for employers, visitors and citizens.
  2. Social – the creation of public spaces and the relationships built through public gatherings.
  3. Tourism – diversity of experiences that drive related spends in food and beverage, hotels etc.
  4. Civic Pride – associated with sports teams and cultural diversity.
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The Community Revitalization Levy Bylaw for the Rivers District, approved by the Province of Alberta, allows Council to collect incremental property tax revenue (from private development) to be used for infrastructure and other costs in the Rivers District until the end of 2047.

This arrangement was an integral element of the successful buildout to date of the East Village and provided the necessary funding to achieve that buildout.

The expectation is that a similar result can be achieved for the East Victoria Park portion of the Rivers District.

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Public engagement


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​​Calgarians were engaged by Calgary Municipal Land Corporation (CMLC) on the topic of an Event Centre within the greater context of the Rivers District Master Plan.

CMLC held engagements at various events across the city. The engagement was supported through extensive promotion, both paid and earned media, for over 100 days of active engagement.

As a result, over 6,000 Calgarians participated directly in the engagement sessions on the issue, and over 120,000 pieces of information were collected.

Since the formation of the Event Centre Assessment Committee, the public has been informed of the process through periodic public meetings that have detailed the progress of the committee’s work.

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If Council ratifies the terms and conditions, CMLC will act as the development manager for the Event Centre. CMLC will conduct engagement on facility design and connectivity, programming opportunities, and urban design and streetscaping with both community stakeholders and the broader public.

As part of CMLC’s responsibility as development manager, it will steward subsequent public engagement on the overall design of the facility, its integration into the broader district and opportunities to incorporate dynamic programming around the facility in areas like the adjacent Festival Street.

Engagement will be conducted in phases as development of the facility advances and to allow for both community stakeholders and the broader public to participate.

Engagement will explore the areas of:

  • Facility design and its connectivity to public spaces like the envisioned Festival Street along Stampede Trail.
  • Opportunities for programming and activation of the facility and the broader Culture and Entertainment District, including reconciliation to the programing likely to evolve from the BMO Centre.
  • Urban Design and streetscaping around the Event Centre to integrate and enhance synergies between nearby amenities like the BMO Expansion, Stampede Park and the character areas of the Rivers District.
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Operating the Event Centre


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The City and Calgary Sports and Entertainment Corporation will enter into a 35-year management and license agreement. That agreement will see CSEC be solely responsible for 100 per cent of the operating, maintenance and repair costs, other than major structural repairs.

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The City will own 100 per cent of the Event Centre, including the lands on which it is located.

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The agreements have several provisions intended to maximize the life of the Event Centre.

  • The Event Centre and underlying land will be 100% owned by The City, while investing 50% of the cost of the project design and construction costs. The land will be acquired from the Stampede on a non-cash basis in exchange for City owned land under the existing Saddledome and elsewhere on Stampede Park.
  • CSEC will operate and maintain the building based on a 35-year Management and License Agreement
    • That agreement will set out standards for the operation, maintenance, and repair of the Event Centre, requiring CSEC to maintain the building to the standards of similar buildings.
    • The agreement will require CSEC to pay 100% of operating, maintenance and routine repair costs.
    • As owner of the Event Centre, uninsured major structural repairs will be the City’s responsibility.
  • Both the City and CSEC agree to maximize the useful life of the Event Centre. The agreement contains incentives for CSEC to fund major capital improvements to extend the Event Centre’s useful life and the initial term beyond 35 years.
    • If CSEC makes such capital investments, its obligation to pay the Facility Fee over the extended term after year 35 is eliminated.
    • If CSEC makes no such capital investments, there are provisions for five one-year renewal options with the Facility Fee remaining in place.
    • The various community payments and other benefits to be paid by CSEC will continue in both scenarios.
    • The parties will always have the option to renegotiate a new license arrangement at the end of the term. The City will leverage its position as the 100% owner of the building and land.
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Location


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East Victoria Park is the ideal location because it meets the needs of Calgary.

  • It is already home to the Saddledome.
  • It has the necessary infrastructure to support an event centre.
  • It is within walking distance to many culture and entertainment venues such as Stampede Park, BMO Centre, Arts Commons, the new Central Library and the National Music Centre.
  • It supports the long-term vision set out in the Council-approved Rivers District Master Plan and contributes to the greater vision for east Victoria Park as a Culture and Entertainment District.
  • It acts as an anchor to support future development outlined in the Downtown Strategy.
  • It is near the existing Red and Blue lines of the LRT and will be close to the new Green Line.
  • It will be adjacent to a planned 5 Street S.E. underpass to support pedestrian and vehicle traffic and the planned 17th Avenue SE Extension to connect the district to the existing 17th Avenue business and retail corridor.
  • It will be a gateway into the Culture and Entertainment District and Stampede Park.
  • The City of Calgary has already made major investments in infrastructure and local area enhancements over the last 10 years.
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As part of CMLC’s responsibility as development manager of the facility, it will steward subsequent public engagement on the overall design of the facility, its integration into the broader district and opportunities to incorporate dynamic programming around the facility in areas like the adjacent Event community space.​

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Construction is expected to begin in 2021 and take approximately three years to complete.​

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The Saddledome was built for the 1988 Winter Olympic Games. It has served Calgary well but is aging. The City will contribute $12.4 M for demolition and CSEC will contribute $1.4 M. The City’s share of demolition and reclamation will be funded from savings in 2019.

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The negotiated terms and conditions for the Event Centre includes a land option for two parcels of land. The ‘Enoch Lands’ are owned by CMLC and the east Victoria Park transit centre (‘Bus Barn Lands’) are currently owned by The City. These lands were included in the terms as a mechanism to stimulate the build-out of the community through additional private investment and as part of the negotiated agreement for CSEC’s $275 million investment in the Event Centre, which will be 100% owned by the City.

The terms allow CSEC the opportunity to acquire and develop these lands within specified time frames:

  • Enoch Lands – ability to purchase the land for development prior to the Event Centre being completed. The sale of these lands will be based on their value immediately prior to the formation of the Event Centre Assessment Committee (ECAC). This option expires on CSEC’s occupancy of the Event Centre.
  • Bus Barn Lands – ability to acquire the Bus Barn Lands from The City within a ten-year time frame from CSEC’s occupancy of the Event Centre. The exercise price of this land option is equal to the fair market value of the land at the time the option is exercised and The City is under no obligation to make this land available for development.
  • Both valuations will be established by independent appraisals.

It is not expected there will be any difference in the value of the Enoch Lands from the date of the formation of the Event Centre Advisory Committee (the date which sets the price for purposes of the option) to today’s date.

The exercise price for the Bus Barn Lands, if they are made available for development by the City, which triggers the CSEC option, is the fair market value at the time of the option exercise, so no discount on the possible purchase price is included.

Both option agreements will require CSEC to commit to development plans.

Through CMLC’s mandate for the development of the entire Rivers District, any new development which may occur on the Enoch Lands or Bus Barn Lands is subject to CMLC and The City’s review and approval of the design concept, its alignment with CMLC’s overall master plan vision, and the development timeline. This is the same approach CMLC has successfully implemented in East Village over the past ten years that has contributed to nearly $3 billion in planned, private investment in the community. CMLC and the City wish to replicate the success of East Village in the rest of the Rivers District. 

To be able to acquire the properties, CSEC will have to pay the fair market value purchase price for each parcel of land, agree to development conditions, and agree to a specific development timeline.​​

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The project budget includes an allocation for flood mitigation efforts as part of the construction of the facility. The building will conform with local building requirements which will require that all mechanical and electrical systems are above the 1:100-year flood level and providing added flood protection measures at any penetrations in the foundation.

The City will work with CSEC to determine the best and most cost-effective approach to secure appropriate insurance coverage for the Event Centre.

Other city and provincial flood mitigation initiatives are also underway that are intended to enhance Calgary’s overall flood resilience which will benefit the Rivers District.​​​

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Until the Event Centre is constructed, the terms and conditions, and resulting costs cannot be fully determined. In determining the costs of insurance, insurers will take into account all flood mitigation strategies in both the construction of the building as well as the activities undertaken by The City or Province in the surrounding area (Calgary and area).


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Other


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While discussions have occurred on this project for some years, this is the first proposal that the parties have agreed to.

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The agreements in principle between The City, CSEC and Stampede are the result of extensive and comprehensive negotiations amongst the parties reflecting the bargaining that one would expect to occur between arms-length parties. The City was focused on ensuring its strategic and commercial interests were protected while acting with integrity and respect. The negotiations were intended to achieve a resolution to all material deal points and to do so on a “package deal” basis with a view to preserving The City’s position. Gives and takes were involved. The transaction must be viewed as a comprehensive package deal.

Confidential and commercially sensitive agreements on fundamental terms and conditions have been reached amongst the three parties: by The City with each of CSEC and the Stampede, as well as an agreement between CSEC and the Stampede, to which The City is not party. At this time, the agreement is not negotiable, without resulting in having a ‘no deal’ with the parties.

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The term “event centre” relates to both design and programming opportunities related to the facility.

An arena implies a single-use sport function. The vision for the Event Centre design is to create stronger integration into the community and interaction with the streets and public spaces around it to create a variety of public experiences (in and around the facility) for citizens to enjoy.

The development of the festival street, public-facing retail attached to the facility and an event centre plaza will create a vibrant and lively space that is beyond just a sports arena.

Council required that the agreement contemplate public consultation during the design phase of the Event Centre, in part to ensure that the Event Centre vision can be brought to life.​

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