Tax levy for new Edmonton arena could work: city report
Part of the cost of Edmonton's new downtown arena can be covered by taxes generated by adjacent development, a new city report concludes.
The plan, outlined in a report released Thursday, would raise at least $125 million for the controversial $450-million project.
The tax, or Community Revitalization Levy, would apply for 20 years to all new development in a zone around the proposed arena.
"The city’s chief economist indicates that Edmonton’s economy, employment and population will all continue to grow at rates comparable to or better than the national average out to 2020," the report states.
"Hence there will be demand for additional housing, incremental retail space as consumer spending rises and new commercial space to accommodate more workers as employment rises and the economy continues to shift toward the production of services."
The CRL is projected to raise enough money over a 20-year period to repay the cost of borrowing $160 million for the project
Report acknowledges risk
The report acknowledges there is risk "that the project will not generate the assessment lift that has been estimated in time to generate the required amount within the 20-year time frame."
"Council would need to determine (its) risk tolerance for going forward under these circumstances," it said.
The city believes $125 million could also be raised from a ticket tax, which is already applied to tickets for events at Rexall Place.
With The Katz Group's commitment of $100 million, that leaves the project $100 million short.
A separate report suggests that shortfall could be made up by selling what's called equity seat-rights, where people would own seats for all events held in the arena.
That plan, however, would require agreement from The Katz Group.
City council will debate the reports on April 6. Mayor Stephen Mandel has said he wants council to make a decision that day on whether the project should go ahead.
Some Edmonton city councillors say they still don't have enough information to make a decision.
"It doesn't give us any more information than we had on March the 2nd or January the 17th or prior to," Coun. Tony Caterina said. "It's just reiterating what we already have been shown."
Caterina's concerns were shared by Coun. Kerry Diotte.
"Basically, I think there's still lots of questions that have to be answered," Diotte said. He wondered what would happen if the CRL doesn't raise the amount of money needed for the project or if costs exceed $450 million.
Some councillors plan to ask city administration for more information next week.
