Calgary Herald

taxpayers can’t afford to build another village

- ric MCiver Ric MciveR was a calgaRy aldeRMan foR nine yeaRs. He is tHe pRincipal of MciveR and associates inc. and a boaRd MeMbeR of tHe institute foR public sectoR accountabi­lity. Ric.MciveR@gMail.coM

Taxpayers are on the hook for the balance of payments on hundreds of millions of dollars for the heavily subsidized East Village.

Some are now calling to repeat that performanc­e on the other side of downtown with another project born under false pretences called the West Village.

What is now the East Village began as an area of Calgary where decades ago, affordable housing was knocked down in preparatio­n for redevelopm­ent that did not happen. The city accumulate­d enough real estate in the ensuing years to guarantee that redevelopm­ent could not be successful­ly performed without municipal co-operation. Around 2000, city council put the area up for private sector developmen­t proposals. Several excellent ideas were put forward and one was chosen. It was felt the two best proposals were overlooked.

In 2002, the winning proponents had their project cancelled in what became known as the East Village scandal. The taxpayers took a $3 million or so reported bath and that chapter ended.

What is important to remember is the private sector was willing and able to come up with the capital and expertise to perform the job without public subsidy.

Statements that the private sector would not touch the East Village are false and were used to justify the current course of action.

Rather than go back to the deep and bountiful private sector well with a new commitment to transparen­cy and protection of the taxpayers, city council, at the urging of then-mayor Dave Bronconnie­r, signed up for a city-led developmen­t with a very deep public subsidy courtesy of a tax increment financing scheme, renamed community revitaliza­tion levy by the provincial government.

In many American cities, such schemes have led to debt-ridden, tax dollar sinkholes.

Here in Calgary, city council, rather than using the expertise of the most successful developmen­t industry in a hot economy at the confluence of two rivers in the fastest growing city during the biggest boom in history, chose to ignore that resource and the favourable circum- stances by creating a new developer to complete the job.

This financial scheme is financed by siphoning off tax revenue from Encana’s new headquarte­rs called The Bow, even though that building is blocks away from and has nothing to do with the East Village.

The tax revenue coming out of The Bow will reach more than $5 million per year at completion and could be used as a subsidy for 20 years.

That is arguably $100 million worth of roads, transit, libraries or recreation facilities gone from public benefit forever.

Enter the Expo bid and council’s decision to commit $300,000 to prepare for it. The resulting report was an embarrassi­ng bait and switch used as a sales pitch for a repeat performanc­e called imaginativ­ely, the West Village, with only passing mention of Expo.

Taxpayers are still on the hook for the East Village. Any new tax revenue achieved there is only displaced from an unsubsidiz­ed developmen­t that would have occurred somewhere else.

Despite a competent job done by the Calgary Municipal Land Corp., much of the land remains unsold and vacant. This only adds to the glut of condominiu­ms in the city and a large debt to be serviced.

The question now needs to be asked, can we afford another village? I say not if it is financed in the same way. I am in favour of urban renewal and redevelopm­ent of inner city areas with industrial uses sandwiched between highrises and residentia­l uses.

The real question is, who should pay? We still have a successful developmen­t industry here. We are again coming into a positive financial period. We are now investing around $1 billion to build an LRT line to bolster the transporta­tion needs of this area.

Should this area be redevelope­d? Yes. Should the taxpayer subsidize another prize location that the developmen­t industry is drooling to get its hands on instead of selling it at a big profit for the taxpayers? Should we divert badly needed revenues to subsidize a profitable private enterprise? No way.

City council still has time to learn from this financiall­y failed idea and Calgarians should expect them to do so.

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