Downtown arena district agreement framework approved
20
2011
Based on the guidelines established on April 6, this week Council approved an agreement framework with the Katz Group for a downtown arena and entertainment district. I supported taking this step to further the project, and while this is not a binding or final agreement, it does reaffirm commitments from the City and Katz Group, and it allows both to pursue funding sources for the remaining portion of the arena budget. This project has the potential to contribute to the revitalization already underway in our downtown. A more vibrant core will benefit our City greatly.
As Council had stipulated in April, the agreement limits the City’s contribution to $125 million, with Katz putting in $100M for the facility, $125M coming from user-pay (a facility improvement fee added to ticket prices), and $100M from other orders of government, to be confirmed. This agreement mitigates the City’s risk, which was a priority identified in public consultations around the proposal – project costs have been capped at $450M. Ratification of this agreement depends, of course, on securing the final $100M. I hope the Province will recognize the benefits this project will confer not only on Edmonton’s core, but on the northern Alberta region.
The current agreement ensures the Oilers will remain in Edmonton for at least 35 years. The City will own the land and arena facility; the Katz Group will be responsible for all operating, maintenance, and capital costs. Given that it would cost around $200M to renovate Rexall Place to current standards, the new arena deal, with its benefits over and above the new facility itself, is a strategic partnership for the City. In fact, part of the City’s $125M contribution will be raised by redirecting current subsidies to operations at Rexall. Design of the new arena will adhere to Council’s Downtown Plan, and Edmontonians will have chances to give input.
A successful arena and entertainment district will serve a wide range of Edmontonians. For 30 days (almost 10% of each year), the arena facility will be open for use by the City for events like Capital Ex or Canadian Finals Rodeo, with proceeds during these weeks returning to the City. As well, the agreement with the Katz Group requires that a community benefits agreement be negotiated. This type of agreement will be unique to Edmonton among Canadian municipalities, and will promote opportunities for the City and community members to reap designated benefits from the developments. If other orders of government match the City’s contribution to a community rink on the site, this amenity will also be built.
From the beginning, I’ve said I would not support any proposal that increases current property taxes. I agreed to this proposal because only $45 million of the City’s portion will be funded through a community revitalization levy, and – above all – a CRL does not draw on current property taxes. To establish a CRL, the City marks off an area directly around a development and dedicates property tax from only new development to fund the project that catalyzed the growth. This way, growth that occurs as a result of the arena will contribute to the facility’s cost.
I remain supportive of Northlands and the success it has had over the past century as a facilitator of community service, business, and events in Edmonton. I will continue to encourage City Administration’s efforts to support a positive place for Northlands in our city’s future. The City has commissioned research into possibilities for the Rexall lands and the sustainability of Northlands.
You can continue to give feedback on this project as it proceeds, both on the design of the facility and on the community benefits it will provide. The majority of Edmontonians who spoke out about the downtown arena supported the development as long as it was done cautiously. I believe the deal we’re moving towards has been able to manage risk while opening the door to exciting change.
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