NEW DOWNTOWN ARENA
Committee to hear funding options
Where a proposed downtown arena for Saskatoon might be built is still unknown, but city councillors will begin looking at how to pay for it at next week's meeting of the governance and priorities committee.
An administration report to be presented at Monday's committee meeting links together a new arena, a new convention centre and a Bus Rapid Transit-style (BRT) system as the pillars of a strategy to revitalize Saskatoon's downtown core. The report then lays out options council could consider to raise the money to pay for them.
A letter included with the plan and signed by the CEOS and board chairs of both Sasktel Centre and TCU Place formally asks council to consider replacements for both buildings, noting their age is beginning to erode their competitiveness.
“If the current facilities are not updated or enhanced, Saskatoon will lose customers, events, and visitors to competitors, therefore eroding the local economic benefits of the facilities,” the letter states.
While also acknowledging that TCU Place and Sasktel Centre are nearing the end of their useful lives, the administration points to budget pressures and “capital project fatigue” among citizens as roadblocks for replacing the buildings. It suggests finding new ways to raise funds.
The report proposes using federal money from the 10-year Investing in Canada Infrastructure Program (ICIP) to cover some costs, noting the city has about $290 million in ICIP money yet to be allocated, including $77.6 million of its own funds contributed as part of the ICIP cost-sharing formula for projects.
However, the report notes that ICIP money cannot be used to build professional or semi-professional sporting facilities, so while the transfer cash could be used for the BRT, other money would likely have to be found for the arena.
Another option in the report is Tax Increment Financing (TIF), which would effectively mean diverting future property tax revenue increases that are anticipated from the revitalized downtown district to help finance construction.
Beyond property taxes, the City of Saskatoon only has the power to levy amusement tax — which it currently only does for Prairieland Park; the money is then returned to Prairieland to be reinvested into the facility.
The administration report suggests looking at how other North American cities have funded arena and convention centre initiatives, noting many American cities have been allowed to collect tax on hotel room and vehicle rentals and collect surcharges on event tickets.
In Canada, the report points to Winnipeg being granted the authority to charge a five per cent accommodation tax to raise money to support the Winnipeg Convention Centre, among other tourism-related initiatives.
Ontario also granted municipalities the power to levy a “transient accommodation tax” on hotel, motel and online short-term rentals to cover initiatives and amenities meant to drive tourism. The report adds that these taxes help capture revenue from out-of-town guests who benefit from using the facilities.
While Saskatoon does not currently have those taxation options at its disposal, the report notes that if the city can get the province to agree to allow some of them, combined with expected transfers from the federal and provincial governments in coming years and the use of TIF, there would be no anticipated need to fund the projects out of property taxes beyond what's already been committed to the BRT.