A new downtown arena in Saskatoon could create millions of dollars in new tax revenue, according to an urban planner involved in creating Edmonton’s Rogers Place.
On Tuesday, Saskatoon city councillors took the first step in planning for a new downtown arena and entertainment district.
“I think something like this is very warranted and it could really change, positively, the heart and soul of the city,” said Simon O’Byrne, senior vice-president with Stantec, who worked on the urban planning for Edmonton’s arena and the surrounding district.
More than one-third of Edmonton’s arena project is funded through tax increment financing (TIF), also known as a community revitalization levy (CRL).
A TIF is one of the proposed funding methods for a Saskatoon arena.
With a TIF, once an arena location is chosen, a city maps out an area that would reap the economic spin-offs from the facility.
The new project typically draws more development in the form of restaurants, hotels and other amenities, increasing property tax revenue around the arena.
“At the end of the day, you want to be able to make sure you’re creating the catalytic effect that you want,” O’Byrne said.
The new revenue that comes in is then used to directly pay down the debt of the project, rather than go toward the city’s coffers.
“The CRL in Edmonton has been an unbelievable success story,” O’Byrne said.
“The city basically anticipates getting something like $25 million to $30 million more a year in property taxes now that the arena and the arena district has gone in.”
Unlike Alberta, Saskatchewan legislation appears to limit the incremental revenue to just the municipal portion of taxes – about 45 per cent of the total, according to a City of Saskatoon report.
“Without this additional portion of taxes in the TIF program, the financing business case is significantly weakened,” the report reads.
Saskatchewan Government Relations Minister Warren Kaeding would neither rule out nor commit to changing the legislation.
“We would certainly entertain any proposal and work with it on its own merit,” Kaeding said.
A joint-use arena and convention centre to replace SaskTel Centre and TCU Place is estimated to cost $330 million to $375 million, according to a consultant’s report.
Having also worked on Saskatoon’s City Centre Plan, O’Byrne had some dos and don’ts for tax increment financing and downtown arena projects in general.
Arenas should be situated in locations where there is room to grow and increase the tax base, he said.
“You want to pick a site where if you build it, they will come. It’ll result in new hotels, new office space, new restaurants, new condos [and] new rental buildings,” O’Byrne said.
He also recommended a location with multiple routes in and out of the area, as opposed to the traffic bottlenecks created before and after SaskTel Centre events.
The area also needs to be pedestrian-friendly.
“You want to pick an area that has narrower streets or streets that could be made more narrow,” O’Byrne said.
Don’t place a downtown arena in an area that is totally developed and there’s less potential for property tax revenue to climb.
“Part of the don’ts is to locate an arena or a new catalytic project where the land appreciation is leased,” according to O’Byrne.
Don’t forecast too much money to come from tax incremental financing, as revenue shortfalls need to be made up.
“But you don’t want to be so conservative with the numbers that you’re going to handcuff yourself either.”
The city has not made any potential locations public, though O’Byrne noted the city’s warehouse district, land north of TCU Place and an area north of downtown all have promise.
Civic administration has identified an amusement tax, naming rights, business district levies and parking revenues as other potential revenue options.
A possible new arena is still many years away, but more discussion is possible during Monday’s meeting of Saskatoon city council.
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