The Vancouver Canucks play the Calgary Flames as the first period beings in an empty arena in NHL hockey action in Calgary, Monday, Jan. 18, 2021. Calgary Mayor Jyoti Gondek says it appears the Flames intend to pull out of the multi-million dollar Event Centre arena complex project.THE CANADIAN PRESS/Jeff McIntosh

CALGARY - The company that owns the NHL's Calgary Flames says it is backing out of the multimillion-dollar Event Centre arena complex project, citing unforeseen costs.

Calgary Sports and Entertainment Corporation says in a statement that "significant infrastructure costs" inflated the overall cost of the project.

"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," the organization said in a release.

"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."

Calgary Mayor Jyoti Gondek said in a series of tweets Tuesday that Murray Edwards, chairman of sports corporation, had informed her that the Flames intended to "pull the plug on the deal."

"We have come to the conclusion where the Event Centre deal is not moving forward," Gondek also told a news conference.

"There was additional funding that had to be taken on by Calgary Sports and Entertainment Corporation. It appears that they are unable to make that financial commitment, following the approval of their development permit, so it would appear that they are ending the deal."

The news comes after several stop-and-start years around the project. The city and the Flames originally agreed to terms in 2019 on the Event Centre to replace the Scotiabank Saddledome, the home of the Flames since 1983.

The original estimate of $550 million to build the 19,000-seat arena was to be split between the city and the CSEC, the Western Hockey League's Hitmen, Canadian Football League's Stampeders and National Lacrosse League's Roughnecks.

But Gondek said some costs, including "climate mitigation" of $4 million and "road/sidewalk right of way issues" of $12 million were still being negotiated.

"The city came to the table to assist with $6.4m in roadways leaving $9.7m for the Flames," Gondek posted. "Based on this gap of $9.7m, I am told CSEC is walking away from our deal."

Gondek said she is disappointed that "on a project worth over $650m, to have one party walk away for 1.5 per cent of the value of the deal is staggering."

"I wanted Calgarians to be the first to know. I am as disappointed as all of you that this is the way things are ending."

The sports company said it was prepared to continue with the project despite escalating construction costs, but was not prepared to "fund 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 city's website says the Event Centre was to be a year-round, gathering place for Calgarians.

"It will be home to the Calgary Flames, Hitmen and Roughnecks and all who cheer them on. The venue will attract major sport events as well as some of the world’s leading performing artists, creating a hub for connecting community, entertainment and sport."

The sports company said the Flames intend to remain at the Saddledome, "while not ideal for Calgarians nor competitively for the Flames."

"We are deeply disappointed with the outcome," it said.

This report by The Canadian Press was first published Dec. 21, 2021.

News from © The Canadian Press, 2021