Early analysis suggests using a $200-million community revitalization levy to partially bankroll the Calgary Flames group’s mega sports complex in west downtown won’t work, Mayor Naheed Nenshi said in a recent year-end interview.
Under the proposal, the facilities and the land would be owned by the city.
Ken King, president of the ownership group, maintains the $890-million project, called CalgaryNEXT, could generate as much as $900 million in ancillary property tax revenue, in part through the use of the $240-million revitalization levy.
Calgary Flames president and CEO Ken King outlines the vision for Calgary Next, the proposed Calgary Flames arena, at an unveiling on the Stampede grounds.
The chairman of the Calgary Municipal Land Corp. said King’s $900-million projection was feasible, but cautioned any potential tax revenue generated by a revitalization levy hinged on two key factors: the cost to remediate the contaminated site; and the size of the area covered by the levy.
“You could draw a model that comes to that number, but really the environmental (review) is so important because the first step is to assess what is there … and what do we do to fix it,” Lyle Edwards told the Herald last month.
But Nenshi disputes the $900-million figure, saying the success of the levy in that location is intimately tied to the cost of remediating the land.
“The early numbers that I’ve seen, and this was before we really did in-depth analysis which is being done right now, indicate that it doesn’t balance,” Nenshi said. “The (levy) doesn’t even raise enough to cover the cost of clean up let alone put $200 or $300 million into an arena.”
The Calgary Sports and Entertainment Corp. has proposed building a new hockey arena, football stadium and field house in the West Village.
Most city councillors have shown little interest in using a levy for CalgaryNEXT, which, as a city-owned building, would not generate any property tax. Paying down the levy would require substantial redevelopment in the West Village and, possibly, neighbouring communities.
Further, Calgary Municipal Land Corp. has hired WorleyParsons to conduct a six-month environmental study in the West Village to assess the scale of contamination in the area.
A predecessor of Domtar Corp. owned and operated a wood preserving plant on a 15-hectare parcel of land between 14th Street and Crowchild Trail before it closed in 1962. The operator left behind an estimated two million litres of creosote, a toxic wood preservative.
Early estimates suggest it would cost $50 million to $300 million to remediate the site.
City council has approved a set of guiding principles to examine the Flames’ proposal, environmental cleanup and analysis of potential revenue from a levy, over several phases. That report is due no later than April 30, 2016.
“In March, we’ll have a good sense of what the environmental costs are and a slightly refined sense of what the (levy) might bring in,” Nenshi said.
“But the No. 1 thing is, if the numbers don’t balance, then we should stop wasting everyone’s time.”
