Community Revitalization Levy sparks debate over use of public funds for private projects
One project that has drawn scrutiny is a new event park located in ICE District
The Community Revitalization Levy is in the spotlight for the millions of dollars it could provide to infrastructure projects in Edmonton.
But concerns have been raised over the use of public funds for private projects, like a proposed event park being built in partnership between the City of Edmonton, the province and OEG Sports and Entertainment.
A CRL is a tool that allows cities to take any tax revenue that would come from new development in a particular area, and then use that revenue to pay for the cost of borrowing for approved CRL projects.
Catalyst projects — those expected to bring more people and businesses to an area — can be funded and approved by the province through a CRL.
There are three CRL plans to fund projects in select areas: the Capital City Downtown CRL, Quarters Downtown and Belvedere.
Council approved a motion 11 to 2 to extend the Capital City Downtown CRL by 10 years to 2044, with Coun. Michael Janz and Coun. Erin Rutherford voting against.
What's proving to be a point of contention is determining which projects should be funded through the CRL, and which should be funded another way.
WATCH | Which projects are considered important enough to be publicly funded?
The province, the City of Edmonton and the Edmonton Oilers ownership group announced on March 7 that they were nearing an agreement that would pay for an event park beside Rogers Place and about 2,500 new attainable housing units north of Ice District.
According to city administration, attainable housing — within the context of the CRL — would be at or below market value.
City councillors debated this matter during two council meetings on March 18 and 19.
Part of the Capital City Downtown CRL is also supposed to pay for the demolition of the Coliseum, the former home of the Oilers, located on the corner of 118th Avenue and Wayne Gretzky Drive.
Pending ongoing negotiations, including a public hearing, the total cost of all projects is $408 million.
The event park has drawn the most scrutiny in the Capital City Downtown CRL plan.
The park is estimated at $250 million with the funding breakdown as follows: $97 million from the province, $69 million from the City of Edmonton, through an extension of the CRL, and $84 million from the OEG.
"If I had the choice between getting cash or gift cards, I always choose cash, flexibility, and here we are getting a gift card to the OEG store," said Janz, questioning why funding was tied to financial partnership with the OEG.
Said Rutherford: "I am going to err on the side of leaning into my own values and not over intellectualize this, and say, at the end of the day, there are things that I cannot entertain in that extension, and they're not just even the ones with the OEG.
"They're also ones with the subsidies for the attainable housing, because quite frankly, I don't think public dollars should be going toward private subsidies."
The Village at Ice District, which will contain the 2,500 housing units, is expected to cost around $68 million.
The costs for that will also be split and include $31 million from the province, $33 million from the City of Edmonton, through the CRL, and $3 million from the OEG.
Puneeta McBryan, CEO of the Edmonton Downtown Business Association, told CBC there is infrastructure that desperately needs to be funded to have work completed.
"Unfortunately, it's become fairly politicized in Edmonton, this question of extending our CRL, but we have infrastructure that is quite literally crumbling in our downtown," McBryan said.
"Whether you're looking at you know that last stretch of Jasper Avenue, between 102nd Street to 109th Street, or the entrances to our LRT stations, infrastructure that's older than I am that desperately needs renewal."
McBryan said if the CRL extension did not go through then the city would have to borrow for infrastructure improvements.
"And that becomes a tax burden on the entire city, because they have to borrow that through their regular capital budget."
Going to a public hearing
Tim Shipton, OEG's executive vice-president of external affairs, told CBC in a statement that the new event park will be unique and "one-of-a-kind in Canada."
"Public infrastructure site serving investments will fund critical public infrastructure for the Village at Ice District development, adding much-needed housing while encouraging downtown revitalization," Shipton said.
Shipton noted housing will be developed in partnership with multiple organizations and include "numerous housing typologies: purpose-built rentals, student, attainable, affordable, etc."
A spokesperson for the Ministry of Municipal Affairs told CBC in a statement that the investment would will help spark Alberta's and the City of Edmonton's tourism sector, create good-paying jobs and drive economic growth.
The statement said the provincial government is in support of authorizing the CRL extension.
"We anticipate having all necessary approvals to do with this package in place later this year," the statement continued.
Coun. Andrew Knack, who also expressed trepidation about the items tied to the CRL extension, put forward an amendment to the extension motion to independently verify a study by the OEG on the economic and public benefit of the event park and housing, which was passed.
"I feel like I could have voted no right away, but I wanted to make sure that everyone in Edmonton had a chance to have a say about this," Knack said.
Had the motion been voted down, the matter of the CRL could not have gone to a public hearing.
"I think there is fear that if we were to say no to this particular funding for those particular projects, that the province would just remove all of the funding entirely and that it can be used toward something else. I'm not sure that's the case," Knack said.
"I think if Edmontonians were quite clear that they have other more important priorities for that money in the downtown core, that that would hopefully allow the province the opportunity to say, hey, well, we still want to help revitalize downtown."
A public hearing on the CRL is expected to be held in June.
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