Funding strategy for proposed $1.2B arena district approved by Saskatoon city council

Saskatoon's proposed $1.2 billion Downtown Event and Entertainment District, or DEED, is now one step closer to becoming a reality after Saskatoon city council unanimously approved a report outlining a funding strategy on Wednesday afternoon. 

City administration can now proceed with working out the details of the strategy and securing funding for the project, which includes an arena to replace SaskTel Centre and renovation and expansion of TCU Place.

Administration made it clear that the current plan does not involve raising property taxes as a method of paying for the arena and district, but Ward 1 Coun. Darren Hill cautioned that "there are no guarantees at all."

"There are no guarantees that we're going to receive funding from the federal government, there's no guarantees that we're going to receive funding from the provincial government, there's no guarantees that the TIF [tax increment financing] allocation is going to meet the revenue projections," Hill said at Wednesday's council meeting.

The city says it will get the money for the arena and district from a mix of sources, including covering about 27.5 to 33 per cent of the project cost itself, with a 30-year debt repayment plan.

The strategy calls for the rest to come from the provincial and federal governments, which city administration says is necessary to bring the project to fruition.

One proposal in the funding strategy is collecting an accommodation tax on hotel room stays, which the report calculates could be as high as 5.9 per cent.

Hill said if city administration comes back with a proposal for an accommodation tax, he would not approve that plan.

Some hotels in Saskatoon already voluntarily collect a three per cent room surcharge that is provided to Discover Saskatoon to promote tourism in the region.

The report says one option is to make the surcharge mandatory and bump it to 5.9 per cent, which it acknowledges would be among the highest in Canada, with 3.65 per cent going toward the entertainment district and the remainder toward Discover Saskatoon.

Renjith Vengalil, a manager representing the Delta Bessborough and Delta Saskatoon hotels, told council he's not in favour of a 5.9 per cent bump.

"While the city's natural beauty and many attractions are a key factors in making Saskatoon … a destination, more needs to be done in promoting why Saskatoon is a great place to do business," he said.

"Implementing a higher accommodation tax could put Saskatoon at a competitive disadvantage, particularly in attracting major conferences and events."

Ward 5 Coun. Randy Donauer pressed administration about whether an accommodation tax would still be up for discussion with the hotels in the area. Administration said it would be.

"At the end of the day, we're trying to fund a $1.2 billion budget, right?" said City of Saskatoon chief financial officer Clae Hack.

"So for every dial that gets turned down, there's another one that needs to be either brought to the table or turned up."

Ward 8 Coun. Sarina Gersher said after speaking to residents in her riding, she found the two biggest concerns were around property tax increases and making sure the event district is a place for everyone, not just those who buy tickets to events.

"I think the report before us and the funding strategy addresses both of those points that I have been hearing prominently in my time in council," she said.

Council's approval of the funding strategy does not mean the entire project is getting a green light, and getting shovels in the ground is still a ways off.

Administration is set to continue bringing back reports for council to discuss and debate.