Ticket Tax Could Close Arena Gap
CRL Catalyst Project List.
There are three camps on this question. There are those who believe the Oilers are priceless, and would pay anything. There are those who believe pro sports are worthless to Edmonton and/or who really don’t want to see any investment downtown; and consequently don’t want to see any city dollars whatsoever going into a new arena (and might or might not support putting money into the existing arena, which will need some work eventually).
Then there’s the rest of us: open to the idea of a new arena downtown, aware that it could spark new investment, but not too happy about how the negotiations have played out and concerned that the City is being asked to put a lot on the line to make it happen.
I’m not ready to climb on board yet. I’m still holding out for a better deal. And I think we need to get there very quickly.
I think we can get a better deal with a reconfiguration of the ticket tax, which I pushed hard for today.
In the current deal, the City would collect a flat payment from the Katz Group to service $125 million in debt, based on a surcharge. Depending on the final interest rates it’s fixed at about $6 million per year. There is also a $1.5 million annual contribution for major maintenance that they will recover with the surcharge. My calculations show we could fill the last $55 million for about $2.6 more a year collected on the ticket tax (yes, that would require still more borrowing). On average that’s $1.50 a ticket give or take.
Part of the way to make it worth the partner’s while to get the $2.6 million would be to shift from a fixed payment to a floating payment – so if the ticket sales were higher one year the City would collect more to pay the debt, but in lean years the city would collect less (fair – and absorbable in the overall budget in the odd year). It’s a risk transfer, but it’s also sharing in the upside. Sharing in the upside is important because citizens have said to me over and over they expect as a return on the investment of so much public money. Sharing in the upside would also make us benefiting partners in the success of the operation.
A ticket tax is a good substitute for provincial money because it reflects the fact that a third or more of the current arena users come from outside the City, and so it would be users from the region and the North chipping in. Plus, we could refocus our efforts on getting support from the province for other needed investment they have been more willing to support, like roads, rec centres and LRT.
There’s no perfect way to do this, but I think there is strong public support for taking a user pay approach rather than putting more city money on the line.
Meanwhile, in related news, I again supported moving ahead with the Community Revitalization Levy. I moved it in fact. I did because, used judiciously, it’s a reasonable tool for paying for civic infrastructure, including a portion of the Arena. I don’t think it would be wise to pay for more of the Arena using it, but LRT connections, land, parks, sewer upgrades, are all important for Downtown’s success.
So next time someone tells you I don’t support downtown, you’ll know better.
5 thoughts on “Ticket Tax Could Close Arena Gap”
Comments are closed.
Bang on yet again. Spoke with Councillor Anderson Tuesday and expressed similar views to him – get the missing $$ from the ticket tax so regional users pay. I am still not convinced we are not $100 mil short as I am not sure the increased MSI funding this year is permanent. Great job as always Don!
I am wondering if there has been any sort of a feasibility study done? I have not heard of one. The ticket taxes would then be $180M. ($55M to ticket taxes on top of the increase already projected $125M). Has Council taken into account that many people who can now afford (barely) tickets at Rexall would not be able to afford tickets downtown at all?
Yours and Councillor Diotte’s comments make me cautiously optimistic. My sons and grandsons are big Oiler fans and I know we need to get our downtown in much better shape. But the needs of all Edmontonians must be the guiding factor when making this decision. I don’t envy you the task.
I’m sorry, but I’m still not convinced that building a sports arena downtown is the answer to “downtown revitalization”.
I have NO problem with building an arena, if the business case for doing so can be made. I don’t even mind if the City of Edmonton throws in a bit of cash or other incentives, provided that there is SOME benefit to the city.
And I’m actually GLAD that some of our stock of surface-level parking lot is going to be taken up by this: I consider the wasteful existence of this sort of land-use in the MIDDLE of a metropolitan area the greatest indictment of the inadequacies our city planning process in the 35+ years I’ve lived here.
But a large monolithic structure closed off to the street is NOT going to do anything to make Edmonton’s downtown any livelier or “revitalized”. Consider the Edmonton Centre complex, or Scotia Place, or Manulife Place, or the Bank of Montreal “cube”; do ANY of them encourage people to be out on the street, checking out restaurants or clubs?
Now check out “Chinatown”, or Whyte Avenue, 104th Street Market, Rice Howard Way, or even 107th Ave….where there are almost always people walking on the sidewalks, ducking into stores and restaurants, bringing vibrancy to the area. See the difference?
Unless we build the arena as a PUBLIC space, where the public is welcome even if there are no events going on, where there are publicly accessable amenities like fitness rooms, swimming pools, practice rinks, restaurants, nightclubs, and music venues, the goal of “downtown revitalization” will fail. And I see NO provision for these things in the current plans.
Re: Martin’s comments
I do not believe in the arena as a be all, end all to revitalization. Just because a venue is in the core will not make it a success IF the venue is surrounded by office towers and not condos. I noticed in Montreal, Ottawa, or even Toronto, high density commercial space is not ‘nightlife conducive’ because the workers are not there. Even in major Canadian spaces, the office tower spaces are “lame”. Walking around downtown Montreal is pretty much the same as downtown Edmonton. At night or the weekends, pretty empty.
The best benefit of the existing office towers and potential commercial (restaurant/pub) spaces is parking and patronage from existing office workers, but the real success will be determined by high density residential.
That said, the location and development already happening around the site seems to be a hybrid, which I think could be interesting. And frankly, seeing other venues in North America, Rexall Place sucks.
I really like Don’s idea of using an increase to the ticket tax to cover the difference as a sensible addition to the framework to make this happen.
Also, Rice Howard Way should be way more awesome than it is. I am hoping it evolves from just a lunchtime place.