Time running out on arena consultation and taxpayers still in the dark on important financial questions
CALGARY, AB: The Canadian Taxpayers Federation is demanding answers to important financial questions about the arena deal before the deadline to submit feedback. Adequate details relating to cost overruns, revenue expectations and land subsidies have not been provided to the public.
“The short consultation period is about to run out and taxpayers are still in the dark on important financial questions,” said Franco Terrazzano, Alberta Director for CTF. “Calgarians are at risk for millions in overruns, but where is that money coming from? Calgarians can’t afford to get soaked again if the arena project goes over budget.”
The city is on the hook for 50 per cent of the cost overruns, what ever that number may be, according to arena committee chair Jeff Davison.
The city document, C2019-0964, indicates cost overruns are a financial risk and raises questions about how the city will fund those overruns.
“A mechanism and funding source are required for cost over-runs for both parties as there is a $275M cap for both parties,” notes the city document.
Cost overruns are a real risk for professional stadiums and arenas. The Winnipeg Blue Bombers’ stadium was originally expected to cost $115 million, but the final price tag was $210 million. The extensive renovations to Seattle’s KeyArena is expected to go $100 million over budget. Laval’s Place Bell arena cost more than double its original estimate.
A 2001 report from the National Sports Law Institute of Marquette University Law School highlights a number of professional sports stadiums that incurred cost overruns in North America, ranging from $26 million in overruns for the Carolina Hurricanes arena to $100 million in overruns for the Seattle Mariners’ field.
Cost details around the land subsidies the city is providing to the Flames have not been released.
“The Flames may buy certain lands in the Rivers District in the future, but at today’s prices. Land prices in a growing area of Calgary will easily be worth more than today’s recessionary levels. Fair enough to contribute value in this way, but it’s a multimillion-dollar option whose costs are unknown,” stated University of Calgary economists Lindsay Tedds and Trevor Tombe.
The city expects to raise an additional $400 million in revenue from the arena, through revenue sources including ticket taxes and additional property taxes. However, details around these revenue projections have not been released. The city’s documents don’t show whether ticket-sale projections are realistic nor is it clear whether property tax revenues in the area will displace revenue from other areas.
“Taxpayers deserve full details about the costs and revenues before councillors ram through their arena deal,” said Terrazzano.