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August 30, 2009
Edmonton edges closer to Oilers TIF
Edmonton mayor Stephen Mandel says details of a planned billion-dollar entertainment complex — to include a new Oilers arena — should be released in "the next two or three weeks." He also said the city's $300 million share wouldn't be paid for with "current" tax money, but reiterated that he would consider a "community revitalization levy," which is apparently Canadian for tax increment financing.
TIFs, in which future property tax revenue are kicked back to pay off the developer's construction costs, are apparently new to Canada. One Canadian economist told the Edmonton Journal that they had successfully been used in Chicago for redevelopment — given that one study of that city's TIF districts found they'd cost $1.3 billion in taxpayer subsidies while generating just $362 million in new revenues, either Canadian economists haven't been paying close attention, or they have a different definition of "success." We'll see whether the arena-skeptical people of Edmonton concur.
Come on...if you wanna talk about arena-skeptical people of Edmonton...then don't go to a Calgary website.
BTW...no matter what happens the tax payer pays....I paid for a museum and art gallery but never set foot in either....Why not have the art guys or museum lovers pay for a hockey stadium?
Haven't read the book, but as I see it...this is a govt job creation project...who will benifit? Everyone who has a job building the place and all the people who will work and live in the area after the fact....of course...the city can collect the tax on bunch of empty lots.
Posted by Ski on August 31, 2009 03:28 AM
As is explained in the book, the typical cost-per-job for sports facilities is around $250,000, which is dismal compared to pretty much any other job-development projects.
And as for the Calgary website, it links to a poll of Edmonton residents, albeit only 440 of them. They really, really hated the idea of using tax dollars for an arena, though.
Posted by Neil on August 31, 2009 09:47 PM
Neil, right on.
In this economy (in which many clubs cannot sell all their swanky new luxury suites or the offensively priced "club" seats), the Oilers do not need a new arena.
Further, their owner is one of the richest men in Alberta, and had no qualms about overpaying for either the team or the land on which the "new arena" might (or might not) sit.
If the club was approaching this as a "defined contribution from the public" endeavour, in which the taxpayer's liability is limited to a minority stake in the total cost (or better yet, a fixed figure) perhaps I might see some merit in it. In reality, the Oilers are playing exactly the opposite hand. The owner of this private business has graciously allowed as how he would be willing to commit "up to $100M" to the new ($450M, or maybe $1bn, or maybe more) playground for his personal business.
Would that all we business persons could float deals like this...
The sad thing is, our esteemed Mayor has a history of making 'pro business' decisions regardless of cost. Less than 4 years ago, the Provincial Gov't allotted about $125M in social housing money to the city... Mandel demanded (and sadly got) permission to redirect this money to a nightmarish highway interchange instead.
Eye on the prize, indeed.