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Ward 7 News: Blog - Is CalgaryNEXT a good idea?

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The Calgary Sports and Entertainment Corporation unveiled a proposal for a new complex to accommodate the professional and amateur sports teams that they own and operate.  Many Calgarians are excited about a new facility where they can enjoy watching their Flames, Stampeders, Hitmen, and Roughnecks play.  Calgarians are proud of their teams, and so am I. They contribute greatly to Calgary’s identity and civic pride.

Currently, the teams play in some of the oldest facilities in their respective leagues. While these teams could use new facilities, it is the City’s responsibility to evaluate whether the proposal is the best project for the site and whether or not it will bring enough benefit to Calgarians to justify public investment.

The project, dubbed CalgaryNEXT, has attracted a significant amount of discussion, particularly due to the expectation that the City of Calgary contribute public money and free land.  CalgaryNEXT requires public money and foregoes future revenue generated from City-owned land.  The proposal estimates that the new facilities would cost around $900 million if built together, and $1.2 billion if built separately. The ownership group would contribute $200 million dollars, with the rest coming from general and special taxes:

• $250 million from a tax collected on ticket sales
• $240 million from a Community Revitalization Levy that would tax area redevelopment
• $200 million directly from the City of Calgary for a new multi-sport fieldhouse

The proposed location for the project is West Village along the Bow River, an area in need of much revitalization.  While appropriate development of this area would benefit Calgary, the site is inherently dangerous after decades of carcinogenic creosote contamination.  Previous work on the site means that Calgarians are largely protected from exposure to undisturbed creosote.  However, the costs associated with further clean up are unknown and are not factored into the project costs.  Estimated clean up costs have ranged from several hundred million dollars to much more. 


West Village in Calgary
West Village

I have consistently expressed that I am not in favour of public money or free land going toward for-profit organizations. Calgarians would have to see a significant public benefit from CalgaryNEXT, for money or free land to be given. The proposal still lacks important details:

• Who pays for the contamination cleanup? The cleanup of creosote contaminated land in the West Village is not included in the sticker price. The City does not have the funding for the cleanup.
• While a public multi-sport fieldhouse is high on the City’s list of priorities, it is currently unfunded.
• CalgaryNEXT would require a large investment in transportation and utilities infrastructure, in addition to the $900 million price-tag, investments that have yet to be investigated and are currently unfunded.
• Coupled with the contamination clean-up, the final price tag could exceed $1.5 billion.
• Value of land was not included in the $900 million estimate.  The City would forego future tax revenues and money from the sale of the land.
• A Community Revitalization Levy (CRL) is basically a loan on future tax revenue, generated within a fixed boundary. Can the West Village generate sufficient CRL tax dollars required to fund the redevelopment of West Village plus an arena?
• Community Revitalization Levies can be high-risk ventures. To mitigate risk, a CRL needs a stable financial anchor.  For example, the Bow Tower, the financial anchor for East Village (Rivers District), generates $22 million in property taxes per year.  When the CRL expires, the taxes will go to general revenue. Currently the Saddledome does not pay property taxes.  Where will the tax revenue come from to pay for the CRL?
• The Saddledome is obsolete after 32 years. Will the life of the “mortgage” for the arena - the CRL - exceed the life of the arena?
• The futures of the Saddledome and McMahon Stadium remain unclear.  The vitality of the Calgary Stampede, a cultural jewel in the City, has also not been fully considered.

The CalgaryNEXT proposal could end up costing Calgarians hundreds of millions of public dollars, or more. This is particularly concerning since studies suggest that the positive impact of professional sports facilities on cities is often exaggerated.

I do not doubt for a moment that the need for modern facilities exists. It is still not clear that this is the right place to build them or that public money and free land should be given to a for-profit corporation.  A comprehensive business case is essential to ensure that this proposal is in the best interests of Calgarians.  I look forward to seeing that business case and discussing the overall proposal with the ownership group and my Council colleagues.  I also welcome your feedback on the issue at anytime.

There is a lot more to come on this issue.



This content represents the personal views and opinions of the Ward Councillor and should not be taken as a statement of policy of The City of Calgary. The inclusion of any external content does not imply endorsement by The City of Calgary.

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