The City of Saskatoon said when announcing the new arena that property taxes would not go up and on Wednesday the city provided information on how that is possible.
City officials revealed new tools to help fund the downtown event and entertainment district, calling it a major milestone for the project.
If you are a frequent attendee of events at TCU Place or SaskTel Centre, you may see the price of admission jump up as an amusement tax is just one of several tools the city is planning on using to help fund the proposed downtown arena.
The city said it’s a necessary step to ensure the project doesn’t rely on raising property taxes.
“We’ve been relatively conservative in our assumptions, knowing we don’t want to be over-optimistic at this point and then run into a significant financial challenge 20 or 30 years down the road,” said Clae Hack, the City of Saskatoon’s chief financial officer.
The city’s funding strategy includes a proposal of a 9.5 per cent amusement tax and a 5.9 per cent accommodation tax applied to hotel and online platform stays like Airbnbs.
The total estimated cost of the project sits at $1.22 billion and the strategy could bring in up to one-third of the price tag over 33 years if estimates pan out.
“If they end up being higher, that’s great news; we can pay back the debt sooner. If they end up being lower, common strategy that other municipalities have taken is they simply extend the rate of repayment,” Hack said.
Administration says conversations are ongoing about what an accommodation tax would look like for local hoteliers but these taxes will be felt above and beyond what people already pay in PST.
When asked what the cost is of doing nothing with the SaskTel Centre, Hack says it’s one or the other.
“The decision is really do we want to build new into a new arena, or renovations and the cost and the shortcomings that come with that,” Hack said.
City administration was clear that council voting to approve the funding strategy does not mean the project is green-lit — rather, a plan is in place should both federal and provincial funding for the project come through.
With no timeline on those funds and negotiations with the hospitality sector ongoing, it could still be several years before shovels are even put into the ground.
For more information visit the City of Saskatoon’s website.
— with files from Gates Guarin, Global News