By Canadian Press

Calgary Flames’ arena proposal tax heavy, says mayor Naheed Nenshi

Sep 22, 2017 | 3:45 PM

Calgary’s mayor says the Flames’ financial proposal for a new NHL arena places a heavy tax burden on the city.

Calgary Sports and Entertainment (CSEC) and the city have gone public with what they would pay and what they think the other side should pay, in the wake of CSEC pulling the plug on “spectacularly unproductive” negotiations.

The looming civic election Oct. 16 has turned up the temperature on what’s become a public back and forth, even though the Flames insist they’re done talking.

CSEC declared via a press release and newspaper ads Thursday they’d put $275 million of owners’ money into a $500-million building and the city should raise the remaining $225 million through a community revitalization levy.

A CRL allows the city to divert property taxes from new development that would theoretically spring up around a new arena into paying for it.

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“That’s tax money. CRL is taxes,” Calgary mayor Naheed Nenshi said Friday at city hall.

“That is straight up property tax from people who are in that neighbourhood. It’s property tax the city wouldn’t otherwise have.

“The Flames would like that property tax to be paid by someone other than them. They are not willing to pay any rent, or property tax or any revenue back to the city in their proposal.”

CSEC contends, however, that their $275 million equates to 35 years worth of rent.

The city proposed a three-way split on the cost of a $555-million arena, with the city and the Flames each paying $185 million and the remaining third raised from a surcharge on tickets.

The city said the Flames would control the new arena and receive all revenue from it.

Flames president Ken King insists the city’s offer amounts to the team paying the entire cost, or more, because CSEC considers a ticket surcharge paid by users revenue that belongs to the team and because the city wants CSEC to pay property tax.

CSEC owns the Canadian Football League’s Calgary Stampeders, Western Hockey League’s Hitmen and National Lacrosse League’s Roughnecks in addition to the NHL’s Flames.

The ownership group is comprised of Murray Edwards, Alvin Libin, Clayton Riddell, Allan Markin and Jeff McCaig.

CSEC has said the owners “will strive to operate, as we have for the last 34 years, in the Saddledome for as long as we believe it is feasible.”

Nenshi, who is running for a third term, says the city is willing to keep negotiating with CSEC on a new arena.

“As long as I’m the mayor, we will not leave that table,” he said. “These negotiations are hard. They should be hard. We’re talking about hundreds of millions of dollars.

“I believe, you don’t have a temper tantrum, you don’t run away. You sit down and you figure out the right way to do it. I hope we will be able to continue to do that.”

King is scheduled to speak Monday to Calgary’s chamber of commerce, where he is expected to field more questions about arena negotiations.

The arena’s proposed location in Victoria Park just north of Scotiabank Saddledome is part of a larger district east of downtown undergoing revitalization. A CRL is already being implemented for the East Village.

Nenshi says the $150 million the CRL is expected to raise over the remaining 10 years of its term has been allocated to other projects in the East Village and can’t go towards a new arena.

“That $150 million that’s already spoken for is based on development we think will happen there,” the mayor explained.

“An additional $225 million, the only way to do that is if you have a heck of a lot more development than we are forecasting.

“In a world where you have 30 per cent occupancy downtown, it’s hard to imagine in the short term. Or you just extend the CRL forever, which just means its property tax money.”

Edmonton’s arena cost $483 million to build, but the entire project that includes a cavernous hall leading into the arena, a community rink, a pedestrian corridor, an LRT connection and the land came to $613 million, according to the City of Edmonton’s website.

The city expects to raise $231 million via a CRL to help pay for it. The Oilers ownership group contributed $165 million to the arena and the hall in a combination of cash and lease payments.

Donna Spencer, The Canadian Press