The Alberta government has stopped accepting applications for the community revitalization levy — the very program essential to the CalgaryNEXT plan for a new hockey rink, field house and football field.
The levy will be up for discussion by Premier Rachel Notley’s cabinet. It’s possible that the program could be cancelled, or altered to produce less revenue for a project.
Mayor Naheed Nenshi says that without the levy, CalgaryNEXT in its current form couldn’t go ahead.
Everybody involved in the debate agrees that a $420-million levy is vital to the grand design offered by Calgary Sports and Entertainment Corp.
They expect NDP approval of a levy, which would direct new tax revenue to the project.
Now, that’s not at all certain.
Provincial officials are currently holding meetings with municipalities to determine how well the revitalization levies are working. That happened recently in Cochrane, which has one project under a levy, also known as a CRL.
Calgary’s deputy city manager, Brad Stevens, will meet the province for what he calls a 10-year review of the East Village levy.
Edmonton has three levies, including the one that embraces the area of the new mega-rink area.
“Our government needs to consider the entire municipal picture, so while CRLs are not part of the Municipal Government Act, they are a part of that overall relationship between the province and municipalities,” says a statement from Shannon Greer, aide to Municipal Affairs Minister Danielle Larivee.
Minister of Municipal Affairs, Danielle Larivee
“Municipal Affairs is currently touring the province to gather feedback on the proposed amendments to the Municipal Government Act.
“This review is currently underway and no new CRL applications have been accepted while it is ongoing.
“Because there are still moving pieces … it is difficult to commit to a timeline on the future of the CRL program.”
Nenshi says in a message: “The CRL has been incredibly successful in the Rivers District, catalyzing billions of dollars in private sector investment.”
“It will be tough to catch lightning in a bottle again, but it’s clear we can’t do CalgaryNEXT in its current form without a CRL mechanism.
“We look forward to further discussing a CRL for the West Village to assist in environmental remediation whether or not CalgaryNEXT goes in that location.”
The government’s thrust appears to be toward improving the levy “to maximize value for Albertans.” But it will be up for cabinet debate, including the possibility of cancellation.
Even if the choice is to “improve,” that could involve less sacrifice of education property tax revenue by the province.
This mechanism was devised when the province had plenty of fiscal headroom; now, it has none.
The Progressive Conservatives started the review and the NDP picked it up, perhaps with different purposes.
Ex-mayor Dave Bronconnier brought CRL funding to Alberta under the name TIF, for tax increment funding, after looking at U.S. examples.
He thought the idea was perfect for developing the East Village, which wasn’t progressing because it lacked vital infrastructure.
This novel method was controversial, but council finally approved and the province went along by amending the Municipal Government Act in 2005.
Just as Bronconnier predicted, the infrastructure built with levy money attracted developers to what’s now called The Rivers.
A CRL is basically a 20-year deferral of new tax revenue from a defined area, so the money can go toward the project and related infrastructure.
Essentially, both the city and the province defer property tax revenue.
The big levy projects always need major new “anchors” to generate tax revenue and make the whole scheme viable.
For the East Village, it’s the Bow building, originally developed by Encana.
What that project might be in the undeveloped West Village is far from clear, although Ken King, CEO of Calgary Sports and Entertainment, mentioned the prospect of a large hotel.
But none of it can happen without a provincial tax twist that’s now in doubt.
Don Braid’s column appears regularly in the Herald
