Sens facing higher taxes

Senators captain Daniel Alfredsson skates at team practice earlier this year. The city of Ottawa is...

Senators captain Daniel Alfredsson skates at team practice earlier this year. The city of Ottawa is looking to increase Scotiabank Place's tax rate. (Ottawa Sun File/Errol McGihon)

DEREK PUDICOMBE -- Ottawa Sun

, Last Updated: 1:51 PM ET

The City of Ottawa is recommending that Scotiabank Place's property tax bill be more than doubled -- though the facility's owners will still be getting a significant break compared to other businesses.

In a report to be tabled next week, city staff suggest bumping the venue's property taxes from $717,000 to $1.6 million over a four-year period beginning next year. That would still leave the facility paying less than half what other similarly assessed properties pay.

Scotiabank Place is valued at well over $100 million.

Innes Coun. Rainer Bloess, who sits on the city's corporate services and economic development committee that will vote on the recommendation, said the increase is a reasonable request because the owners of the Scotiabank Place have had a special tax deal for years and it's time to look at a more fair policy.

"We have to look at them paying a more equitable share," said Bloess.

By the end of 2010, the property tax increase would generate an extra $900,000 annually for the city.

Taxed at the full current rate for businesses in Ottawa, Scotiabank Place would have to fork over about $4.5 million annually. But, with about $3.76 million in tax relief shared by the city and province, the owners pay only $717,233 a year.

The report says the total tax relief benefit conveyed by the city and the province to the arena has totalled about $27 million since 2000.

The agreement between the city and arena owners Capital Sports Properties Inc. (CSPI), stipulates that Ottawa must provide 60 days notice of any change or termination of the agreement, which has been done.

Last April, the same committee looked at increasing property taxes to $1.8 million, but later rescinded the recommendation because city staff had not given CSPI sufficient notice.

Scotiabank Place representatives were not available for comment but the report says "staff has been able to arrive at a mutually acceptable proposal with CSPI for council consideration."

When the Ottawa Senators hockey club was experiencing financial difficulties in the late 1990s, the province created a special tax class for professional sports facilities to reduce or eliminate any property tax burden on the facility. Scotiabank Place is the only facility in the city that falls into that special tax category.

Gloucester-Southgate Coun. Diane Deans said increasing the rate is a move in the right direction and there could be further future increases.

"Everyone needs to pay their fair share and that includes Scotiabank Place," said Deans.

Council reviews the agreement annually but the report is also recommending the review be changed to every four years. "This would allow each new council to review the agreement once during its term in office," the report says.


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