Province facing tough choices on arena proposal
Critics cool to public money being put into a private- sector project
The Calgary Flames’ proposal of an $ 890- million arena megaproject doesn’t call for direct provincial or federal government funding, but several aspects of the plan could put Alberta’s NDP government and Ottawa on the spot.
The CalgaryNEXT project, revealed Tuesday, calls for the a new NHL rink, CFL football stadium and amateur sport field house to be located on city- owned property on the west end of downtown.
The Flames’ proposed funding model calls for the hockey team to put $ 200 million toward the project, with $ 200 million coming from the city for the field house, $ 250 million from a ticket tax and $ 240 million from a community revitalization levy.
However, there is no funding earmarked in the proposal for the environmental liability on the land — the site of a former creosote plant — with cleanup costs estimated at $ 50 million to $ 300 million.
Ken King, CEO of the Flames, made it clear the project would try to bring the city, province and federal governments together to fund the remediation.
“Can we talk about a group effort to clean it up?” he said.
“The prime minister told me a long time ago that ‘ I don’t have money for hockey arenas,’ and apparently that is the prevailing wisdom everywhere, but that’s not what we’re talking about here.”
In April, with the Progressive Conservative government in power, the province said it would not help pay for the environmental work.
The community revitalization levy also hinges on the provincial government, which must give its approval to the idea. A community revitalization levy allows cities to take out large- scale loans for projects and repay them over an extended period by collecting all property taxes on the levy district land that comes from new developments and higher land values.
Having such a levy in place means the province would forego half of the property tax revenue from the project.
King said he has discussed the levy issue with Finance Minister Joe Ceci and has sent a letter to Premier Rachel Notley.
“I did not get a positive or a negative response. I couldn’t foretell what their answer might be, but we’re certainly going to try to present a compelling case to get them to agree,” he said.
Deputy Mayor Diane ColleyUrquhart said getting the levy and the co- operation of the province was “critical” for the project, and she praised Notley for “being openminded.”
The NDP government would not make Ceci available for an interview, and Notley refused comment Tuesday night.
Ceci’s press secretary, Marion Nader, said in an email that “the government keeps an open mind to all proposals that comes across its desk.”
“If and when an official proposal comes forward ... we will take a look at it.”
But others urged the government to reject the community revitalization idea.
Scott Hennig of the Canadian Taxpayers Federation said a community revitalization levy is essentially a sleight of hand.
Governments act like the levy creates public funding that doesn’t otherwise exist but in actuality it simply diverts property taxes — in this case to a private business — from other areas and other uses, he said.
“We’re not in favour of taxpayers funding professional sports arenas period, but if the city is going to do it, the province is going to do it, ... make it transparent,” said Hennig.
The NDP government elected in May is facing major financial issues with revenue drying up and the economy slowing because of oil prices that have fallen under US$ 50 a barrel. The deficit in the provincial budget that will be released this fall is expected to be more than $ 5 billion.
Opposition parties reacted with wariness to the provincial government
I couldn’t foretell what their answer might be, but we’re certainly going to try to present a compelling case to get them to agree.
taking a role in financing the arena project, especially around the environmental liability.
Wildrose Leader Brian Jean said he would prefer to see the private sector play a bigger role in the funding model, but said the province should not stand in the way of the city if it requests a community revitalization levy.
But he said the city should be responsible for cleanup of the site.
Alberta Party Leader Greg Clark, the MLA for Calgary- Elbow, wondered if the project may hamper development in other areas of the city. He said more information is needed, but it appears to be overly reliant on governmental funding.
“I have a big concern about public dollars going to further private enterprise,” Clark said.