This is an archived version of a Field of Schemes article. Comments on this page are closed. To find the current version of the article with updated comments, click here.
February 19, 2010
Edmonton mayor: How about a ticket tax for Oilers arena?
Edmonton Mayor Stephen Mandel has started soft-pedaling his tax-increment financing plan for an Oilers arena, most recently suggesting that $5 ticket tax could be used to help raise some funds instead. "I think it's not unreasonable expecting those people that use the building should pay for it, and some form of ticket tax would be an expected result," Mandel said in a speech yesterday. "I think the citizens of Edmonton will feel more comfortable with those who use it to help pay for it as well, too."
Mandel also hedged a bit on the TIF plan (called a "community revitalization levy" in Canadadian), saying, "I would stress that a CRL is only possible when it goes hand in hand with proof that the revenue streams assumed into a CRL calculation are achievable." Which is kind of missing the point, since the biggest problem with TIFs isn't that the revenues don't show up (though many times they don't) but that they're cannibalized from tax revenues elsewhere in town — but at least it's nice that Mandel realizes it's not a magic money machine.
The Edmonton Journal actually goes so far as to suggest that Oilers owner Daryl Katz should embrace a ticket tax:
One of the weaknesses of the vision for an arena development presented by the Edmonton Oilers' owner Daryl Katz is an apparent failure to grasp the vital political ingredients to success, a failure exemplified by his suggestion that the $100 million he initially put forward as his contribution might be diverted to other components of the redevelopment.
Mandel is actually doing him a favour by seeking to hold him to his original commitment, a favour underlined by proposing to bring ticket buyers to hockey games and other events in as a sort of third stakeholder to partner with Katz and the population at large.
Given that ticket tax money mostly comes out of his pocket — every $5 in extra tax that fans have to pay is $5 less in ticket price he can get away with — it's not all that likely that Katz will see this as a favor. Or even a favour. Though at least Mandel is moving the discussion away from "Should we build a new arena?" to "How should we pay for a new arena?" and that's something that every sports team owner has to be grateful for.
Neil;
The CRL that Mandel is proposing is actually a district levy on top of normal property taxes. While this does have the potential to strip tax revenues from elsewhere, it is not quite the same as the standard TIF used in many US cities - in which a portion of the property tax payable by the new development is kicked back to cover construction costs/bonds. At least this would be "additional" revenue being directed to the debt, not just a property tax waiver, in effect.
For the record, the majority of opinion here is against significant public contribution to this private business (at the moment). Katz has mishandled the media very badly and looks like a spoiled rich kid who pouts when he doesn't get his way (yes, he's not alone). If he has the ability to push forward with a charm offensive, it doesn't show.
Today Mandel mentioned a ticket tax as well. I've not been a fan of the way city hall has handled this issue so far, but am pleased to see the focus being put more on what Katz must do to get the city behind the project rather than what "we" must do for him...
Mandel has said that the public has made it clear to council that they don't want their tax dollars going into Katz' pocket (well, in greater numbers than they presently do, at least). We'll see how this progresses, but at least the city leadership does seem keen to ensure any deal that is made is a reasonable one for the taxpayers. Watch this space, I guess...
Posted by John Bladen on February 19, 2010 09:32 PM