The Cost of Constructing Calgary’s New Downtown Arena

Calgary, Alberta – The city of Calgary has selected CAA Icon, an American firm, as the development manager for the construction of a new downtown arena and entertainment district. The contract will pay CAA Icon $18.9 million for overseeing the $926 million project over three years.  

The fee raised some eyebrows, as it is significantly higher than what was included under the previous arena agreement in 2019. That deal allotted $8 million for the Calgary Municipal Land Corporation to manage a smaller, less expensive arena development. 

City officials explained that the increased costs reflect the larger scale and complexity of the current project compared to the former proposal. The new arena site spans 10 acres and includes not just the event center, but also a community rink, parkade, and land for future commercial development.

Managing Mega Arena Projects

Large arena construction projects require experienced developers. CAA Icon has overseen other major venues like Rogers Place in Edmonton and Climate Pledge Arena in Seattle. Their expertise commands premium pricing in a specialized field with few competitors.  

At nearly 2% of total capital costs, the $18.9 million fee falls within industry norms. However, some critics argue taxpayers shouldn’t fund multi-million payouts to private U.S. firms. Supporters counter that the city lacked the internal capabilities to direct such a massive initiative.

The Long Road to a New Arena 

Replacing the aging Saddledome has endured a lengthy saga. An initial agreement with the Calgary Flames fell apart in 2021 over budget disputes. After renewed negotiations in 2022, a new deal emerged.

The city and Calgary Sports and Entertainment Corporation will split arena costs. The province added $330 million for a community rink, surrounding infrastructure, and Saddledome demolition.  

With financing and construction oversight finally resolved, preparatory work should launch in early 2024. The ambitious schedule targets opening the venue by late 2026.

Streamlining Future Procurement

Calgary’s arrangement with CAA Icon offers takeaways for municipalities embarking on arena projects:  

  • Conduct comprehensive cost-benefit analyses of external consultants versus in-house staff  
  • Weigh fee structures and incentives that align private contractor goals with public interests
  • Encourage competitive bidding with clear evaluation criteria to control expenses  
  • Explore joint public-private partnerships and risk-sharing models  

Careful contracting optimizes public resources. The coming years will determine if Calgary struck the right balance in advancing its downtown renewal.  

Arena Investment Generates Growth  

Major event center projects aim to catalyze wider community development. The ripple effects of hundreds of construction and operations jobs, along with increased visitors, should bolster Calgary’s urban core. 

Platforms like these also help cities attract and retain talent, especially younger demographics. Quality of life improvements become recruiting tools for businesses to draw skilled workers.  

The formula has precedents with sports facilities sparking the revitalization of neighborhoods in other cities. Of course, the returns rely on sound underlying market conditions and strategic planning around the arena.

If designed and leveraged appropriately, Calgary’s arena investment could transform more than just a new venue. Leaders envision the entertainment district uplifting the city’s economic and cultural vitality for decades to come.