The Flames’ new arena deal, endorsed by the mayor and city council just a week before a (rubber-stamp) vote to be held Tuesday, is a great deal for the Flames and their billionaire ownership, and thus not a good deal for the city of Calgary. It looks even worse after what the council did about 24 hours later.
A day after striking a deal to cover half the costs of a new $550-million arena with public funds, Calgary’s city council ratified $60 million in budget cuts, a plan negotiated behind closed doors and only first presented to citizens at the meeting in which it was approved by a 13-1 vote. What’s getting cut? Oh, just some stuff vital to a livable city.
City council approved $60 million in budget cuts late Tuesday night, including cuts to bus and CTrain service, fire services and affordable housing.
The cuts across 48 different service lines will result in job losses for 115 municipal employees.
Council first elected to slash budgets after facing an uproar in June from small business owners. Commercial properties in neighbourhoods outside the core have faced steep tax hikes since 2015 as a knock-on effect of property values plunging in the downtown.
It should be noted that, in trying to sell the arena deal as a good one for taxpayers, Calgary is claiming it will recoup nearly $160 million in increased property taxes as a result of the arena revitalizing the neighborhood. So it seems a little strange to this observer to counteract lowered property values by slashing budgets at the same time it claims that property values will be skyrocketing soon.
The arena deal is full of stuff like that that doesn’t stand up to scrutiny. One key selling point by the city is a two-percent “facility fee” on all tickets sold at the new arena, which Calgary claims will bring in $155.1 million over the 35-year lease. But University of Calgary economist Trevor Tombe ran the numbers himself, and sees no way in which the facility fee can bring in that much money. He says it would need to be six percent to even come close. “It does seem like that balance between the public contribution and the ticket tax needs further explanation,” Tombe understatedly told the Calgary Herald.
Tombe observed that if the city wanted to guarantee it would get back $155 million, it could have simply demanded it as a target in the arena deal rather than rely on rosy projections. He noted that the Oilers’ arena deal with Edmonton requires the ticket tax to amount to $125 million over 35 years, and readjusts the fee each year in order to stay on track. (Currently, it’s at 9.5 percent.)
Tombe also noted that the money recouped from Calgary arena’s ticket tax is somehow less than what the city proposed in 2017 negotiations, while at the same time the city’s spending on the arena is even higher this time around.
If all of this sounds bad to you and you’re a Calgary resident who’d like to let your lawmakers know it sounds bad, you don’t have a ton of time to let them know. When the city council endorsed the arena deal, it initially voted against extending the amount of time for the public to give feedback. But local outrage caused the council to “generously” extend the window from Friday all the way to Monday.
Considering Calgarians were still learning on Friday exactly what’s in the arena deal—like the fact that they will be responsible for half of all cost overruns—it seems like they deserve more than a week to have their voices heard. Too bad; city council votes to ratify the plan on Tuesday, and they’re voting yes, no matter what their constituents want.