Future of naming rights and ticket tax settled as new Calgary arena deal talks continue

A few more details on the City of Calgary's $1.2 billion deal for a new downtown arena as well as infrastructure in its culture and entertainment district emerged Monday.

A city council committee heard that the city will not impose a tax on tickets sold for events in the new arena and that the owners of the NHL's Calgary Flames will control the naming rights for the publicly owned building.

Previously, the city had said those matters were subject to ongoing negotiations.

As well, the city will front nearly the entire cost of the $800 million arena with cash on hand.

It expects to recover most of that money from the Calgary Sports and Entertainment Corporation (CSEC), which owns the Flames and other sports teams that will use the arena.

CSEC has agreed to an upfront payment of $40 million for the building. It will then make annual payments of $17 million to the city for 35 years. Those payments will include a one per cent escalation clause for each year of the deal, which is estimated to bring the city over $708 million.

The Flames will be the anchor tenant for 35 years, and CSEC will operate the building as well as control all revenues.

The city also announced that in the event of cost overruns, CSEC and the City of Calgary will share equally the cost of any extra expenditures.

Coun. Andre Chabot, who calls himself a fiscal hawk, explained why he supports the arena deal.

"Obviously, I don't think that everybody got everything they wanted, but I think it's as reasonable a compromise as we could have hoped for, and I do believe it will be very beneficial to the city as well as to the community in the long run," said Chabot, who represents Ward 10.

He said besides the payments from CSEC, the city plans to sell five land