Update on the proposed arena and entertainment district
03
2011
On March 2, Council heard an update from Administration on its research into a potential downtown arena and entertainment district. While Council has directed staff to negotiate options for this development, no decision has been made at this point. For my part, I am continuing to gather information and feedback before making a final decision. Council needs to perform due diligence and ensure public interest is at the forefront of negotiations.
Here is an update on where things stand. I believe an arena district has the potential to accelerate and complement the revitalization already underway in our downtown. The project also allows us to strike a long-term agreement with the Oilers to remain in Edmonton, which is of great importance to many Edmontonians. And a new arena has the potential to eliminate the subsidies the City already pays for Rexall Place, in the amount of about $3 million per year for ongoing maintenance to an aging facility, plus about $2.5 million per year for operating costs (to subsidize the Oilers indirectly, through Northlands). If Rexall Place were to undergo major renovations, the estimated cost of bringing it up to current arena standards is $197 million.
Throughout discussions of an arena district, I have been very clear about making sure taxpayers' interests are kept in mind at every stage. I stand by the statement I made at Council on 21 July 2010: that any arena proposal must not use current property taxes or increase property taxes.
In the primary financing option under review, about 70% of the arena cost would come from private funds (Katz Group and a ticket tax) and about 30% from public funds (a "community revitalization levy," which commits taxes from new development in the surrounding area which is directly stimulated by the arena – not from current property taxes).
There are still crucial questions that need to be answered. On April 6, Council will hear more about how a community revitalization levy would work. Above all, we need to ensure this deal would not put undue risk on taxpayers if development does not occur at the anticipated rate. In April we’ll also hear more about negotiations with the Katz Group and about how seat licensing, naming rights, and other options could be used to raise additional funds. Through this whole process, the sustainability of Northlands and a plan for the Rexall Place lands (which the City owns) are vital considerations.
I welcome your ongoing feedback on this important issue.
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