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Who Will Pay for a New Arena?

Council has made up its mind to build a new arena. The price tag is about $100 million dollars, or about $625 per person. With an average household size of 2.4 persons, (compared to 4 persons per household in 1971) the average household will pay $1500 over the next 20 years. At the current interest rate that will mean an average annual tax payment of $96.

“Average” can be tricky, though: the average moose has only one antler and the average motor vehicle in Canada has about 4.55 wheels. Your family’s share depends on how much your home is worth.

On average, the widow living alone on a pension will pay the same as the family with two working parents and two working teenagers in the next house. A family with a million-dollar house on the lake will pay more than a family in a shack. On average, apartment dwellers will pay a larger share of their income for the new arena than homeowners because the the tax rate for multiple dwellings is higher and incomes are on average lower.

50% of the our populations lives in the oId city – the core communities. More than $60 million is likely to come from these people because property values are on average higher in the core communities. Less than 40% will come from outside of the core even though half the populations lives outside of the core. In other words, old city residents will on average pay 50% more than their friends up the valley.

As the population ages (and we already have one of the oldest populations in the province) the cost will be shifted toward retired people. In 2011 the largest age group in the population was between 50 and 54.When the Arena opens, this group will be between 55 and 60. Their kids will be gone, about half will be retiring. On average this is the age group with the largest houses. They will pay more than other age groups.

About that time many of them will start downsizing. They will pay less if they downsize sooner. The will not pay anything if they retire in another town. If you plan to retire in Sudbury and stay in a large house you will pick up part of their share.

It is likely that the rents for the new arena will not cover costs and the annual loss will probably grow. The loss will be paid out of property taxes as well.

There will also be a loss of downtown tax revenue. The market price of commercial properties is very sensitive to vacancies. Rents can fall quickly and resulting in falling property values and falling assessments. A one percent drop in the price of commercial properties in downtown business district will cost the city $33,000 a year.

On top of all this, the outer districts are already spending more than their share of the budget because they have more roads per capita to maintain, and because it costs more to provide services like garbage and water in low density areas. As a result of the way we pay for roads and services, the old City of Sudbury is already over-taxed relative to subsidized outlying areas.

Finally, it isn’t likely the cost can be transferred to Toronto taxpayers the way council did with the Maley Drive extension. Senior governments say they don’t want to spend their dedicated infrastructure money on replacing an arena. It will be very hard to package other needed improvements to aging city infrastructure with the project in the Kingsway location.

Overall, older people closer to downtown will pay more than their share. The vast majority of them will not be among the less than 10% of the community who go to the new arena.

Sudbury_community_arena

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