Tag Archives: yegarena

Will Edmonton be a second-class city without the new arena?

By Mack D. Male ·

Last week City Council was again discussing the proposed downtown arena. Though Administration provided an update at the Wednesday meeting, it certainly didn’t feel like much new information was brought forward. Details on the proposed Community Revitalization Levy (CRL) were delayed yet again, this time until the first week of April. The meeting did not go well.

Mayor Mandel seemed to be upset that progress had stalled. He wants Council to make a decision in the next month or so:

“It’s enough already. I think we’re going around too many circles and let’s make a decision.”

But there was another comment he made that stood out:

“Either we build a new arena or we become a second-class city, which in my mind we don’t want to be.”

I’ll admit that comment even surprised me. Does Mandel really think we can’t be a first-class city without building the new arena? Is the project really a make-or-break one for Edmonton? Boosterism has long been a part of this debate, something Dave covered back in January. And as our Mayor I think Mandel needs to be Edmonton’s greatest champion, a role he has definitely not shied away from while in office. But is there no hope for Edmonton if the arena project doesn’t go ahead?

“My choice of words probably wasn’t right,” Mandel admitted when I asked him about it. “It’s just that when opportunities come up, you have to make a decision. Edmonton in the past hasn’t made an effort to seize opportunities that have come up.” It’s a good point, I think. You can’t simply wait for things to come along, you have to go out and get them. If we want to take Edmonton forward, we need to make a concerted effort to do so. “You’ve got to fight for things,” Mandel said.

Mandel stressed the need to improve our downtown. “Cities are evaluated by their downtowns, not their suburbs. Edmonton’s downtown has a long way to go.” I asked if that meant we had to have the arena. “There’s millions of ingredients that go into it,” he said. The arts community and our IT sector were just a few of the examples he cited. He of course thinks the arena is one of those ingredients, however. “The arena with a good financial deal will make Edmonton better.”

Stephen Mandel at Candi{date} Sept 29, 2010

When discussions get intense, people say things without fully thinking them through. I think that’s what happened to Mandel last week with the second-class comment, but he’s certainly not the only one who has made regrettable comments. Is it true that “the anti-arena faction is out in full force” as David Staples suggested (archive) a couple of weeks ago? I think it is, and there have certainly been some puzzling comments from them as well. The debate needs people on both sides, to help us tease out the details and ultimately arrive at the best decision for Edmonton. Mandel has decided to support the arena. Others have decided to fight it. A good debate is healthy for Edmonton.

On Saturday, Gary Lamphier writing in the Edmonton Journal reminded us that there are many key questions about the project that have yet to be answered (archive):

Although Mayor Stephen Mandel seems determined to wrap up the Seinfeldian arena "debate" — such as it is — in early April and push the project ahead at Mach speed, it’s hard to see why with so many key questions unresolved.

With weeks to go before a pivotal report on the project is presented to city council — following which councillors may have little time to reflect on it before they vote — it’s puzzling that so many key questions remain unanswered.

Today, Danny Hooper writing in the Edmonton Sun offered some compelling reasons to move ahead with the project (archive):

We are not the arctic outpost some think of us. This is a vibrant, energetic, resourceful, caring, and fun community, yet I don’t think our downtown best makes that statement. And I think it should.

Where some see a downtown that feels dull, disjointed, and at times lifeless, I see a blank canvas. The Katz group have at least brought out the paint and offered their vision of what our city centre could be. Of what it should be. And we’re all welcome to pick up a brush.

Maybe it comes down to perspective, as is so often the case with difficult questions such as this one. Do you choose to see the arena as Mayor Mandel does, as an opportunity to enhance our downtown that we should at least make an effort to capitalize on? Or do you choose to see the arena as those against the project do, as an expensive pet project that will do little to help Edmonton’s core?

There are no guarantees in this debate. Edmonton will not be relegated to “second-class” status if the project dies, nor will Edmonton automatically be world-renowned if it goes ahead. There’s obviously no secret recipe either, or we’d have already turned downtown around. Whether you support the arena or not, it’s important to recognize that revitalizing our downtown and becoming the city we want to be will take much more than any single project.

City’s Standing As Metropolis Declared To Hinge On Coliseum

By Mack D. Male ·

Recently I have been doing some research on the history of Rexall Place. I thought it would be useful to understand what happened in the past when trying to make sense of our current downtown arena debate. As part of that research, I spent some time at the City of Edmonton archives. I wasn’t sure what to expect or how to approach my research, so I simply asked for anything related to the construction of the Coliseum. Sherry Bell, Reference Archivist at the Archives, was incredibly helpful and came back with a thick file folder labeled “File 1, 1963-1974”. She told me it was the first of many, just the tip of the iceberg.

Coliseum History at the Archives

I read through the entire folder, taking notes as I went. The documents inside, mostly clipped Edmonton Journal articles, tell the story of how the Coliseum came to be, from the push for a downtown arena in the early 1960s through to the construction of what we now call Rexall Place in the early 1970s.

The title of this post comes from an article in the Edmonton Journal published on September 12, 1963. In it, Alderman Les Bodie made his case for the proposed downtown coliseum of the day, saying:

“I think the successful city will be the one with a stable economic base combined with a stimulating economic climate, and the coliseum will be a major factor in attracting interest in our city.”

It was one of many gems I found in the file, some of which I have shared below, and some of which I’ll share in future posts.

In total, I recorded 93 headlines (I skipped some). Here’s the breakdown of the articles I looked at by year:

Lots was written early on in the debate, and less was written as construction got underway and progressed. Here’s a sample of the headlines:

  • Coliseum Site Studied – May 11, 1963
  • City Approves $10 Million Coliseum Plan – June 25, 1963
  • City Has ‘Escape Hatch’ If Coliseum Voted Down – August 29, 1963
  • City’s Standing As Metropolis Declared To Hinge On Coliseum – September 12, 1963
  • Mayor Hits Coliseum Critics – September 24, 1963
  • Coliseums Seem To Spark Growth – September 28, 1963
  • Coliseum Complex Rejected By Almost Half Ratepayers – October 17, 1963
  • Mayor Anticipates Verdict On New Coliseum Proposal – March 1, 1965
  • A Coliseum Or A New Arena? – March 25, 1965
  • Alderman Warns City Taxpayers Will Have To Subsidize Coliseum – July 20, 1966
  • Ex arena to be constructed just north of Gardens – April 22, 1972
  • Oilers won game but public the real winner – November 11, 1974

I was immediately struck by how similar today’s debate is to the debate in the 1960s. In short: a downtown arena is proposed and tied to the future of the city, people argue over the location and other details, but the process really gets stuck on the money.

One of the first documents I found in the file was a pamphlet published by The Hamly Press (which as far as I can tell no longer exists) entitled, “the Coliseum Plebiscite: a test of our Faith in Edmonton as a Great Metropolis of the North West”. Here are some of the statements found inside:

  • “A downtown showplace that will publicize Edmonton as a progressive, positive-thinking city, developing rapidly in all phases of modern city live and endeavor.”
  • “The Coliseum Complex will lead the way in revitalizing downtown activity.”
  • “A Vital Necessity for Downtown Development!”
  • “Construction of the Coliseum Complex will be the city’s first step in the fulfilment of Edmonton’s remarkable plan for the renewal of the downtown city centre. There is little doubt that perseverance with this project now will be a decisive factor in the eventual completion of the entire Civic Centre plan.”
  • And a quote from Mayor Roper: “This plebiscite will be a test of the vision of the ratepayers of our city. How much do we want Edmonton to lead all Canada in bold, imaginative downtown development?”

Edmonton Journal writer Ben Tierney, working in the City Hall Bureau, wrote a lot about the proposed project. In a September 24, 1963 article entitled “Other Cities Find Value in Coliseums” he highlighted what he saw as “three basic benefits”:

  1. Attraction of major sports, entertainment and cultural events that the city could not otherwise hope to obtain.
  2. Attraction of outside dollars to the city through increased convention activity as well as non-local attendance at coliseum events.
  3. Increased tax revenue for the city through construction of new downtown building encouraged by the coliseum’s construction, and a revitalized city centre.

Sounds familiar, doesn’t it?

Of course, the initial plan never came to fruition, and subsequent attempts to rescue it failed also. On October 17, 1963 the Edmonton Journal reported the results of the plebiscite that would have authorized the City to borrow $14,250,000 to finance the coliseum:

“The coliseum complex was strongly backed by the former city council, the Edmonton and District Labor Council, the Edmonton Chamber of Commerce and Jaycees, the Edmonton Exhibition Association, the Edmonton Area Civic Centennial Committee, and the Edmonton Building and Construction Trades Council.”

“55% of voters favored the two money bylaws…but a 2/3 majority was required. Opposition to the project centered on the costs involved.”

Over the next ten years, various attempts to salvage the idea were made, but ultimately the cheaper Edmonton Coliseum was built instead. I wonder how different things might have been had the downtown complex gone ahead?

Yes! For Edmonton Position Statement on the Proposed Downtown Edmonton Arena

By Mack D. Male ·

Yes! For Edmonton sent the following position statement on the proposed arena to the media this afternoon:

I have been privy to some of the discussions about this, and was opposed to the statement being released because it kind of suggests that everyone who signed up to support the group on the airport issue automatically supports this one too. I don’t believe that is the case.

There are people in the organization who wanted to make a statement on the arena, and that’s fine. The more people who share their thoughts and opinions, the better. But I don’t think it is clear who Yes! For Edmonton speaks for, and that causes me some concern as the group approaches future issues.

It’s not clear whether this position statement will be posted on the Yes! For Edmonton website or what other updates will be made.

ONEdmonton Downtown Vibrancy Task Force letter to City Council regarding the Proposed Downtown Edmonton Arena and Entertainment District

By Mack D. Male ·

ONEdmonton is a group of local leaders that have come together a few times over the last year to discuss how we can make Edmonton one of the world’s top 5 mid-size cities. The first subcommittee, called the Downtown Vibrancy Task Force, was launched in November after the larger group identified that our urban core is the top priority. I have been fortunate enough to be part of both groups.

Today, our task force sent a letter to City Council regarding the proposed Downtown Arena and Entertainment District:

The task force is a group of majority, not consensus. At the last meeting, the majority of the task force members voted the arena project as the top near-term priority in Edmonton’s downtown.

The task force members include: Chairperson Randy Ferguson (Procura), Bob Black (Katz Group), Dr. Paul Byrne (MacEwan), Carolyn Campbell (University of Alberta), Michael Janz (Public School Trustee, EFCL), Terry Kilburn (Avison Young), Bernie Kollman (IBM Canada), David Majeski (RBC), Mack Male, Doug McConnell (Dialog), Scott McKeen, Honourable Anne McLellan (Bennett Jones), Carol Neuman (Edmonton Next Gen), Simon O’Byrne (Stantec), Ian O’Donnell (Downtown Edmonton Community League) Keith Shillington (Stantec), Paul Verhesen (Clark Builders), Sheila Weatherill (EPCOR), Richard Wong (Sutton Place Hotel), and Ralph Young (Melcor). Representatives from EEDC facilitate the task force.

I don’t think anyone on the task force considers the arena project a done deal, nor do they think the issue is a simple one, and this is reflected in the letter. My read of what the task force is saying here is this: there’s potential with the arena project to positively impact our urban core, so let’s keep things moving and figure out how to make that happen.

UPDATE: I originally left out Ian O’Donnell and Sheila Weatherill, because they joined us after the first meeting. My mistake. EEDC has posted the list here.

Alberta’s Community Revitalization Levy: Proposed Downtown Edmonton Arena District

By Mack D. Male ·

This is the third part in a three-part series on Alberta’s CRL.

In the first part of the series, we looked at Alberta’s CRL legislation, identifying how it works and what the process is for creating a new CRL. In the second part of the series, we looked at Alberta’s three existing CRL projects, to get an understanding of how the funding mechanism has been used in the province thus far. Now we’ll look at the proposed downtown Edmonton Arena District, to see how a CRL might be used for that project.

Introduction

I am by no means the first to write about a CRL in relation to the proposed arena. Last month, Andy Grabia of Why Downtown? wrote a popular post on the proposed CRL. The use of a CRL has been a frequently cited potential source of funding since at least August 2009, but it was mentioned long before that actually. Notably, in the City Shaping: Summary Report of the Leadership Committee for a New Sports/Entertainment Facility for Edmonton (PDF) from March 2008, there’s this statement:

There is precedent in Alberta for the use of a community revitalization levy (CRL) for enabling projects such as this.

At the time that statement was made, the Rivers District CRL (the first in Alberta) was less than a year old. The three current CRLs are being used to revitalize large areas, and they are not centered around any specific development like an arena. Only one of them has received full approval and moved on to full implementation. I don’t think it’s fair to say there’s precedent for the use of a CRL to enable the arena project now, and it certainly wasn’t an accurate statement three years ago.

I point this out, because it seems as though that report has formed the basis of many other related decisions in the intervening years. It treats the CRL as if it is a well-known, well-established funding mechanism, which I don’t believe is true. Certainly TIFs have been used elsewhere in North America, but our context here is different.

What’s the potential?

As we saw in part one, there can be significant upside to a CRL, assuming development does occur and property values do rise. We also learned that there are a variety of factors that can affect this.

That same City Shaping report offered some financial estimates on the proposed arena CRL:

We have estimated the potential for $2.5 billion in additional assessment growth representing $20 million in incremental municipal and provincial property tax revenue annually. This estimate was reviewed for reasonableness by the City Assessor.

Back in February, Gary Klassen, GM of Planning & Development at the City of Edmonton, estimated that $1 billion in investment would generate $14 million a year in taxes.

Given that we don’t have another Alberta-based example of a CRL like the one being proposed for the arena, I asked the Katz Group to help me out. Can we really get the economic lift that proponents of the arena suggest? They pointed me in the direction of Columbus, which is the focus of a case study on their website. Nationwide Arena, home of the Columbus Blue Jackets, opened adjacent to the city’s downtown in 2000, in an area that once housed a state prison. A report published in July 2008 by the John Glenn School of Public Affairs found that the Arena District was responsible for stimulating more than $1 billion in investment:

"This is really a model of ways to use an arena to help revitalize downtowns," said Glenn School professor Robert Greenbaum.

The report suggests that the Arena District had a significant impact on jobs in the area:

An increase of more than 50 percent in the number of businesses in the Arena District since 2000. In addition to the Blue Jackets, the district’s 172 businesses include coffee shops, a movie theater and professional service firms. These businesses employed more than 5,000 full- and part-time workers in 2006, and between 2000 and 2006 they generated $1.46 billion in payroll and $6.13 billion in revenue.

And on property values:

Appraised property values in the Arena District increased by 267 percent between 1999 and 2008, compared to a 22 percent increase in property values for the entire downtown area.

I encourage you to read through the report. Of course, the findings are not without dispute. You can read another perspective on Columbus here.

Hypothetical CRL Boundary

Though the City of Edmonton has been working with a conceptual model for the arena CRL, they haven’t shared it publicly. In response to Council’s questions, they did offer some insight, however. The model includes:

  • 300,000 square feet or retail built over 20 years
  • 370,000 square feet of hotel built over 6 years
  • 95,000 square feet of casino built in the first year
  • 1,500,000 square feet of office built over 20 years
  • 1,800,000 square feet of residential built over 10 years

The model assumes natural assessment appreciation of 3% per year, and a 3% increase in municipal and educational taxes per year.

The model suggests that $160 million in incremental taxes could be garnered, $125 million of which could be dedicated to the arena while the remaining $35 million would go to other public infrastructure.

You can download the relevant spreadsheets in PDF here.

As for the conceptual boundary, which also remains private, the following information was shared:

  • The boundary includes the Aurora project, which they estimate could generate $4.1 million in tax revenue
  • The boundary includes a redeveloped casino, which they estimate could generate $0.8 million in tax revenue
  • The boundary includes the EPCOR Tower, which they estimate could generate $5.0 million to $6.8 million in tax revenue

That shows how much more lucrative commercial development like an office tower can be. There’s a risk, however, in that it is quite likely the EPCOR Tower will be completed before a CRL is approved, which means it would generate very little or no lift in property taxes. Remember the baseline assessment is set to December 31 of the year in which the CRL is approved.

I have absolutely no inside information on what the CRL boundary for the proposed arena district might look like, but here’s a hypothetical example:

You can see the proposed Edmonton Arena District in the middle (the dark part), and the red is the hypothetical CRL boundary. Why did I choose that boundary? A few reasons:

  • The hypothetical boundary covers an area of 1.4 square kilometers, which is right in the middle of the three existing CRL boundaries.
  • The hypothetical boundary includes the Aurora project, as well as the EPCOR tower.
  • It highlights a risk, that the CRL might be located adjacent or very close to the Quarters CRL, potentially affecting the success of both projects.

We should learn more about the City’s model and boundary when City Council meets on January 17, 2011.

Is the timeline realistic?

The Oilers’ lease at Rexall Place expires on June 30, 2014, and the Katz Group has said it has no intention of renewing that agreement. That gives the project a deadline of less than four years. As we learned in part one, the ideal process for obtaining a CRL takes roughly two years, and in part two, we found out that only the Rivers District CRL happened that quickly. Mayor Mandel recently suggested a decision could be made by April 2011, which makes the window of time to obtain funding and complete construction more like three years. It just doesn’t seem likely to happen. Here’s the response from Administration when asked about the timeline:

The Katz group has identified that if an arena project goes ahead it will happen concurrently with development of an office tower in the district.  The expected construction window for both the office tower and arena is 18 – 24 months.  This schedule for concurrent development is aggressive.  For comparison, the current  EPCOR office tower project is scheduled to be constructed over 36 months.

It’s certainly possible that a CRL could be approved in the given timeframe, but rezoning, building permits, design, and all the other elements of construction would likely take more time than is available (given the Katz Group’s deadline).

What are the risks?

In Administration’s answers to Council’s questions, they addressed one of the bigger risks of using a CRL to fund the project – the current economy. The answer notes rising office vacancies downtown and declining lease rates, and goes on to say:

A significant component of the Katz Group proposal is the construction of new office and commercial space.  This type of space would contribute considerably to the front ending of a CRL area, however, the current market conditions suggest that there is considerable risk if anchor tenants are not committed to the space before construction.  The Katz group intent is to attract new business to the City that currently does not have a place in the market.  If this is not possible it may result in existing businesses moving from other parts of Edmonton to the new development.

Another answer gave similar information:

A faster assessment lift would occur if the Katz Group was to construct certain developments (i.e. in advance of natural demand) that could increase incremental taxes within the boundary.  Unless new tenants are coming from outside Edmonton that otherwise would not locate here, then these incremental taxes (in advance of natural development) may only reflect a shift in tenants from one area of downtown to the other.

Those answers highlight an issue that Scott Hennig of the Canadian Taxpayers Federation has frequently pointed out – the potential that the resulting development isn’t actually new, and is just a shift from other areas of the city. That would have the side effect of taking taxes that would have been in general revenue and locking them into the CRL. Scott told me:

The only way a new hotel (or bar) will get built next to the arena and not just shift demand is if all of a sudden people’s incomes go up (in aggregate, not just say, construction workers) as a result of the new arena and development and therefore they want to use that money to purchase additional products, or if it can be shown that Edmonton’s population will grow faster as a result of the new development, or if you can increase tourism.

It’s an issue that is certainly worth thinking about. How can you prove that a business located in the area specifically because of the arena? How can you prove it wouldn’t have been built elsewhere in the city were it not for the arena? How can you show that tourism increased as a result? How can you show that the arena caused population to grow faster than it would have normally? All of these things are hypothetical benefits that are difficult to prove in practice.

Scott also made a good comment on demand, in response to a question about the arena potentially inducing a housing development that would not have occurred in Edmonton otherwise:

You can be sure that if there was a demand for additional housing to be built, it would get built. The city didn’t use a CRL in anywhere else in the city and houses, condos, apartment buildings, townhouses and other housing still got built over the past 100 years.

Another risk, of course, is that not enough development takes place over the 20 year timeframe of the CRL, leaving the City burdened with the remaining debt.

Sharing The Risk

Both Mayor Mandel and the Katz Group have repeatedly said they want to negotiate a deal that is fair to all parties involved. More specifically, the Katz Group has said:

We seek a functional partnership with the City and a fair balancing of risk between the parties.  Neither the City nor the Katz Group should bear risk disproportionately.

Could that sharing of risk apply to a CRL? We know that an important part of the plan for a CRL is to outline how any potential shortfall would be covered. By default, the City would have to cover the debt out of general revenues, taking on all the risk and potentially impacting the services it provides to citizens. Perhaps the Katz Group and the City could agree to share that responsibility, something that Administration has confirmed is an option:

An agreement can be attempted to be negotiated between the parties with respect to the issue of a guarantee to cover debt servicing if projected development does not occur in the CRL area.

Paula Simons has noted in the past that a similar deal in San Diego took place, but at the time the Katz Group wasn’t interested in such an arrangement. More recently they have indicated that such an arrangement could be a part of any negotiations with the City.

Sharing the risk could also refer to the resulting ownership of the project. It is important to recognize that a CRL is public money. Mayor Mandel has stated that if public funding was used to build the arena, there would be “big time say by the city and citizens.”

Transparency

I think both the City of Edmonton and the Katz Group have done a poor job of informing constituents about the CRL thus far, and I’d like to see them both address that shortcoming.

On the Katz Group’s Answers page, there’s a question about public investment that states:

The Community Revitalization Levy (CRL) is drawn from the enhanced tax revenue from the developments in and around the district.  The CRL would pay down the city’s loan and then create a revenue stream in perpetuity.

No introduction or link to more information on the CRL. It’s as if “public investment” and “community revitalization levy” are one and the same, whereas the CRL is just one of a variety of public funding options. The City of Edmonton is guilty of jumping the gun as well. The questionnaire that was made available last month included a question about the CRL, without explaining what it is. Handouts were made available at the open houses that took place, but just 300 people attended those – compared to nearly 29,000 responses for the questionnaire. The City has since added a page on the funding model.

The City’s findings from that public consultation reinforce the idea that more education needs to be done. Participants noted that more study on the CRL is required, and that the “concept is very hard to understand.”

I asked Scott Hennig a bunch of questions about the CRL, and one of his comments in response stood out for me:

Unquestionably, the city can spend tax dollars to make certain locations more attractive, or using zoning laws or their land ownership to make certain types of buildings mandatory, but they don’t need a CRL to do that.

I think it’s really important that both the Katz Group and the City of Edmonton are transparent about what the CRL is, what the CRL is not, and how it might be used.

If Council decides a CRL is appropriate, the process of obtaining it needs to be much more open as well – when did you first hear about the Belvedere or Quarters CRL? My guess is not until the discussion about using a CRL for the arena started. That’s unacceptable, given that public consultation is a key component of obtaining a CRL.

Transparency on this issue moving forward is key.

Two Basic Assumptions

Let’s revisit the “two basic assumptions” we identified in part one. Is the arena project worth the risks associated with using a CRL to fund it? Public opinion on this seems mixed. Some people feel that a new arena is unnecessary and will do little to revitalize downtown. Others think the arena is a game-changer, an important catalyst project (as identified by the Capital City Downtown Plan). The truth likely lies somewhere in-between. As for the second assumption – is there a sound expectation that development will occur as a result of the arena? The fear is that we end up with another City Centre debacle, where additional development was promised but never built. The Katz group did not provide specifics, but did try to reassure Council that additional development will take place:

Our dialogue with  our consultants and prospective tenants and partners leaves us with a high level of confidence that we will be able to develop a vibrant entertainment district around the arena. We have had substantive discussions with 6 major hoteliers and the level of interest in placing two hotels in the Arena District is very high. We have nine written Letters of Interest from a variety of international, national and local hospitality and entertainment providers and have had numerous other verbal expressions of interest.  We have also had promising discussions with potential anchor tenants for the proposed office towers.  We are confident that there will be a market within the District for both student residences and condominiums.

Final Thoughts

In this three-part series, we’ve looked at how Alberta’s community revitalization levy legislation came into existence, we’ve examined the impact it can have, and we’ve identified the process that must take place for a CRL to be approved. We also explored the three current CRL projects in the province. Finally, we’ve taken all of that information and applied it to help us understand how a CRL might be used for the proposed downtown Edmonton Arena District. There are opportunities and challenges associated with a CRL for the proposed project, and I think it is clear that there’s a need for more specific information.

The arena project is a moving target of course. We’ll learn much more about the City’s business model framework as well as their thoughts on the use of a CRL at the January 17, 2011 City Council meeting.

Alberta’s Community Revitalization Levy:

  1. Introduction
  2. Rivers District, Belvedere, The Quarters
  3. Proposed Downtown Edmonton Arena District

Northlands by the numbers

By Mack D. Male ·

Today Northlands made a presentation to City Council. Chair Andrew Huntley and President Richard Andersen talked about the impact that the organization has in Edmonton, and answered questions related to the proposed downtown arena. Here’s an at-a-glance look at Northlands:

Most of those numbers come from the 2009 Northlands Annual Report (PDF). Northlands breaks its business into four areas: Northlands Major Events, Agriculture, Racing and Gaming, and Sales, Hospitality and Client Services. Racing and Gaming accounts for both the most revenue and the most expense – that area of the business lost over $7 million in 2009.

As David Staples noted, I don’t know how they get to 2500+ events.

Some other numbers, from the presentation this morning:

  • $5.8 million is the base cost of operating Rexall Place each year
  • $10.9 million is the cost of operating Rexall Place if you include hockey
  • $17.1 million is the cost of operating Rexall Place after including all other events
  • $1.1 million is the amount the Oilers contribute towards those operating costs
  • $2.2 million is the amount the City of Edmonton contributes toward those operating costs each year (adjusted for inflation)

The Oilers pay Northlands $1 to rent Rexall Place – that agreement is set to expire on June 30, 2014. Northlands pays the City of Edmonton $1 to rent the land its facilities are located on – that agreement is set to expire in 2034.

You can learn more about Northlands here, and you can see their answers to City Council’s questions here (PDF).

Proposed Downtown Arena: Response to Council’s Questions

By Mack D. Male ·

Back in July, City Council asked questions of Administration, the Katz Group, and Northlands regarding the proposed downtown arena district. A lot of questions. Today, the responses to those questions are being made available in preparation for the December 10 meeting (read them here). Here are a few questions and answers that I have extracted.

Mayor Mandel asked Administration: How many parking stalls are in downtown Edmonton that are within 8-10 blocks of the new proposed arena site?

Data from a parking study prepared as a background report for the Capital City Downtown Plan (Capital City Downtown Plan) in 2008 and recent calculations indicate approximately 46,100 total parking stalls exist within a 10 block radius from the proposed arena site.  Of these, approximately 2,700 are on-street metered parking, 17,300 are off-street surface parking, and 26,100 are located within a parkade (i.e. structured parking).

Councillor Caterina asked Administration: Why was the 5th best location chosen rather than #1 – Jasper Avenue, #2 – Northlands, etc.?

The confidential HOK Study does not prioritize the proposed locations.  Rather, it identifies the essential components required to attract major sporting and entertainment events and identifies location issues and the criteria necessary for a successful facility development.  The proposed location for the district is a viable choice when factoring in the various criteria identified in the HOK Study, particularly related to the challenges/opportunities of land assembly.

Councillor Leibovici asked Administration: Can a condition of a CRL be a guaranteed revenue stream?  In other words if projected development does not occur as anticipated can the City require that the Katz Group provide a guarantee to cover debt servicing costs?

A risk assessment is part of the requirement for the CRL.  The CRL plan must identify expected and alternative funding sources in the event the development does not occur.  Alternative revenues to make up any shortfall in expected revenues from a CRL would be discussed as part of a negotiation with the Katz group.

Councillor Leibovici asked Administration: What are the projections for the Edmonton Convention Market? Part of the answer:

From Mike Fitzpatrick, VP & General Manager of the Shaw Convention Centre: The Shaw Conference Centre is routinely turning away convention business due to a lack of downtown convention space; when that happens these events are almost always forced to select another city.  In the nine months from January to September 2010 we have already turned away 13 future convention bookings.

Councillor Sohi asked Administration: Have discussions taken place with the Province regarding the CRL model?

Administration has had preliminary discussions with the province on the use of a CRL for arena development.

Councillor Anderson asked the Katz Group: Is the $100 m Katz dollars cash or land?

There are a number of ways to deliver $100m  in value, but we recognize that this will have to be done in a fashion that is acceptable to the City.

Councillor Iveson asked the Katz Group: Please explain exactly how a Location Agreement works from the Franchise perspective, including the contemplated duration of the agreement.

A location agreement would be a term of the lease pursuant to which the Oilers would play in the new building.  It would bind the Oilers to playing only in that building for the full term of the lease.  We are prepared to sign a long term lease in a new downtown arena that would bind the team to Edmonton for the  term of that lease.  We expect a term of 25 years or more.

Councillor Sloan asked the Katz Group: Forbes has shown consistently over the past 3 years that the Oiler net operating income is better than the Calgary Flames anywhere from $3 million to $10 million per year?

That is not accurate based on our information.

Councillor Sohi asked the Katz Group: Are two arenas viable in Edmonton?

No.

Councillor Thiele asked the Katz Group: If no new downtown arena district is built in Edmonton and the Oilers will not play in a renovated Rexall Place, where will they play?

Our singular focus is upon negotiating a mutually satisfactory agreement with the City of Edmonton that will facilitate the construction of a new downtown arena.  We are confident that this can be achieved.

The complete list of questions and answers is available here. At the December 10 meeting, Northlands will be giving a presentation, the questions and answers will be discussed, and Administration will be talking about the public consultation that took place.

The issue will come before Council again on January 17. You can see more information here.

A closer look at the City of Edmonton’s Downtown Arena Questionnaire

By Mack D. Male ·

The City’s online questionnaire for the proposed downtown arena has received quite a lot of criticism, especially online. Twitter users have not been shy about calling it “leading” and questioning its intent. And that criticism has come up in face-to-face conversations I’ve had with people at arena consultation sessions and other events as well.

At the consultation sessions, officials have made it very clear that the questionnaire is meant simply to gather feedback, and is not intended to be a statistically valid survey. It feels like a survey though, so it’s no surprise that people treat it that way.

The introduction of the questionnaire reads:

This questionnaire is one of several methods being used to gather thoughts and concerns about a proposed downtown sports and entertainment facility. The feedback received will be provided to City Council to assist in their decision-making.

And it explicitly asks that you only fill it out once, though technically there’s nothing stopping you from filling it out dozens of times. There’s also no way to ensure that only people who live in Edmonton fill out the questionnaire.

Proposed Downtown Arena Consultation

I emailed the City with some questions on the survey, and they wrote back with detailed responses.

Was the questionnaire written by City staff? Calder Bateman staff?

A team worked on the online questionnaire. It was one of the early elements developed to support public input and was meant to be a quick and convenient way people could share their thoughts. It was never intended and not designed as a statistically valid, formal survey – but a technology-based tool for use by those who might not make the open houses in person. It means we will have a richer range of input to report on.

While other elements of the open house and discussion forums have evolved based on the input and suggestions we’ve received, we didn’t feel it appropriate to adjust the online questionnaire – so it has remained consistent with what was originally posted.

How many entries have you received to-date?

As of 4:00 p.m. Nov 9 we had 17,030 directly through the online questionnaire plus another 60 from those who called 311. We’re pleased with these results. It’s likely that people are seeing the online questionnaire as an option to attendance at the open house.

Any indication of how many received entries are duplicates?

No. At this point, we haven’t done an analysis on the questionnaire submissions. We really need to wait until the entire process concludes to get the full picture. There are a number of ways people are providing input including email, sticky notes, completion of the discussion feedback forms and the questionnaires. The inputs from all areas will be consolidated into the final report.

Are there any plans for a follow-up questionnaire later in the process?

There will be other opportunities for public involvement and input throughout the process, and another questionnaire might well be an option.

Are there any plans for a statistically valid survey?

We realize the online questionnaire only reflects the opinion of the people who complete it – it is not a representative analysis of what the population of Edmonton might think. The City will be very clear when presenting the results to ensure they are not considered a statistically valid sample of opinion.

A statistically valid survey continues to be a possibility. Our focus right now is on the current suite of public involvement opportunities.

I also asked my colleague Greg Pope, Analytics & Psychometrics Manager for Questionmark, for his thoughts and feedback on the questionnaire. He suggested this best practice guide (PDF) for good survey design as a starting point. Here are some of the comments & suggestions he had:

  • The current 1-5 “definitely” likert scale is unclear (no label for 2,3,4). Greg suggested an even number of choices (1-4) so that there is no “maybe” or “unsure” category.
  • “A rule of thumb is to try and keep all the questions on the same scale with the same values, so converting all questions to statements with a 4 point agreement scale would work well.”
  • “Another rule of thumb is to phrase the questions all the same way. It is not leading or misleading to ask “I want a new downtown arena built in Edmonton.” Because you are asking whether they agree or not with the statement. “
  • If the responses were going to be analyzed in any way, Greg said he would have asked some demographic questions. As a simple questionnaire, that’s probably not as important.
  • Another suggestion Greg had was to combine the open-ended fields into one at the end, to make it quicker to complete the questionnaire. He said there’s often sorting that has to happen anyway.

Good feedback to keep in mind if a survey is created in the future. Thanks to both Greg and the City of Edmonton for helping me out with this.

I think there are two key takeaways here. First, the online questionnaire is not a survey. Second, the City of Edmonton is consistent in treating the questionnaire as just another way for people to provide input. If you think the questions are leading, don’t fill it out. There’s nothing stopping you from emailing the City with your thoughts or calling 311. And if you can, attend one of the public consultation sessions.

Recap: Downtown Arena Public Consultation Session

By Mack D. Male ·

Last night was the first of four City-hosted public consultation sessions on the proposed downtown arena. The sessions aim to gather input that will be provided to City Council. Roughly 150 people visited the Robbins Health Learning Centre throughout the evening, though only about a third of those stayed for the facilitated part of the session.

Proposed Downtown Arena Consultation

The first two hours of the session followed an open house format, with information displays, handouts such as a backgrounder (PDF), City officials available to answer questions, and opportunities for individuals to write questions or comments on sticky notes or in drop boxes. Promptly at 7pm, Margaret Bateman made a brief presentation (PDF) on the consultation process. The next two hours were facilitated discussion groups, where everyone had the opportunity to provide specific feedback on five key questions. Here are the questions as they were presented this evening:

  1. What’s your position on building a downtown arena?
    • If supportive, why?
    • If not, why not?
    • If conditional, why?
  2. If a new downtown arena project were to proceed, what do you think is important to consider in terms of:
    • Design?
    • Downtown connection and impact?
    • Impact on surrounding communities?
    • Community benefits/engagement?
    • Impact on the future of Rexall Place?
    • Any other issues?
  3. What about using a mix of private and public funding to fund a downtown arena?
    • Are you open to this? Why?
    • Not open to this? Why not?
    • Open under certain circumstances or conditions? If so, what are they?
  4. What do you think about other possible funding sources to cover arena costs? (some or all of these are options)
    • A ticket tax
    • A personal seat license or luxury box license
    • A community revitalization levy (which would require the facility be publicly owned)
    • Funding for non-arena infrastructure from other levels of government
    • Additional private investment
    • Any other sources?
  5. Do you have any final thoughts or views for Council?

I attended a “stakeholder” consultation last Thursday that followed a similar format, but asked slightly different questions. The first question in that session was: “Do you support building an arena to revitalize Edmonton’s downtown? If yes, why? If no, why not?” Talk about a leading question with a big assumption! Needless to say I was very pleased to see that the City (along with consultation partner Calder Bateman) had tweaked the questions this time around.

Proposed Downtown Arena ConsultationProposed Downtown Arena Consultation

My discussion group started off fine, but quickly descended into disagreement as a few very vocal members wanted to skip to the funding question right away. The City officials on hand handled the situation very well, and before long our group was back on track generating some useful discussion (the other groups didn’t seem to have any issues). Here are some of the comments from the group that I wrote down:

  • Unclear that the arena would actually bring people downtown
  • The arena will not generate tourism
  • Skepticism about an influx of commercial development surrounding the arena
  • Transit would need to be greatly improved, concern about the lack of an LRT stop right at the arena
  • What would happen to Rexall Place?
  • General feeling we would lose Canadian Finals Rodeo and maybe other events
  • Lots of concern over traffic congestion, some concern over parking
  • Feeling that the current ticket prices are already too high
  • Quite a bit of skepticism about the effectiveness of a CRL
  • Thought that spending the money on existing recreation centres would result in higher benefit to the community

As far as I could tell, my group was the most negative about the arena. The others seemed cautiously optimistic, and when everyone came together at the end of the evening for Margaret Bateman’s recap, that seemed to be the consensus. There was concern over treating the arena as the key to revitalizing downtown, and there was obviously lots of concern over the funding model, but there also seemed to be some optimism that the project could be a very good thing.

Proposed Downtown Arena Consultation

There are three more public consultation sessions currently planned:

If you can’t make it to any of those sessions, you can fill out the online questionnaire, call 311, or email downtownarena@edmonton.ca.

For more information, check out the City of Edmonton’s site, the Katz Group’s site, and the Why Downtown? site. You can follow updates on Twitter using #yegarena.

Whether you’re for or against the arena, or even if you’re unsure, it’s important to make your voice heard!

Recap: Katz Group reaches out to Nextgeners on the Edmonton Arena District

By Mack D. Male ·

Last night the Katz Group hosted an “off the record” meeting downtown to talk about the proposed Edmonton Arena District with “nextgeners”. Most of the nearly 60 people in attendance heard about the event through the Edmonton Next Gen’s weekly newsletter. Given that the last news update on their website was posted on July 23, I was curious to hear what Bob Black had to say.

Bob’s presentation lasted just under an hour, and was followed by a question and answer session. The newest piece of information to me was related to some concepts the Katz Group has come up with for street activations. The concepts are very much a work-in-progress, and will be shared more widely in the future after they are further developed.

Both Paul and Bruce have already written about the meeting, but here are my notes and favorite quotes (all quotes are attributed to Bob Black):

  • Much of the presentation was a recap. The district is 12 acres on the north side, 4 acres on the south side.
  • The current plan is for the arena to be centered on the north side, surrounded by a practice rink, office towers, and other development. The south side could host a hotel and a condo building.
  • As Bob walked through diagrams and concepts, he made sure to point out changes they have made based on feedback.
  • “We believe our project can contribute significantly to putting Edmonton on a new foundation for business.”
  • Bob called the July meeting with City Council “a watershed moment” in the history of the EAD project, because it gave them a process to follow.
  • “We think there’s more opportunity for live entertainment in Edmonton, and we intend to put it into the district.” Bob described two additional live entertainment venues that would be part of the complex, in addition to the arena itself. He talked fondly about the old Sidetrack Cafe.
  • “The project will be phased. To expect that all 16 acres be developed at once is not realistic.” In questions after the presentation, Bob confirmed that the arena would be built first, but couldn’t give specifics about the rest of the development.
  • Bob talked about the seasons, and explained the idea of a sidewalk-arcade. In the summer, activity would spill onto the sidewalk. In the spring/fall, the arcade could have roll-down shades, and in the winter, it could even be heated.
  • Bob also talked at length about the winter garden, perhaps the most controversial part of the proposed development thus far. He explained that it was created to solve a critical design issue – they don’t want to impair traffic on 104 Avenue, and they want to ensure the safety of patrons after large events. He mentioned the current “lemming” effect after hockey games, where large groups of people quickly “get the heck out of dodge.”
  • The winter garden is intended to be a year-round gathering place, and the Katz Group clearly sees it as the centrepiece of the development. Bob called it the “statement piece” and said it could be Edmonton’s “postcard snapshot”.
  • The winter garden would be roughly 1 acre in size, suspended 32 feet above 104 Avenue. Despite criticism that the winter garden moves pedestrian traffic off the street, Bob said that it “ties the arena into the downtown”.
  • The presentation did touch on the Oilers and its finances. “The Oilers are the only team in the NHL that do not receive non-hockey revenues.”
  • In response to a few questions about what the development would look like and how it would be funded, Bob said: “Until you have a project you can’t make the full investment required for architecture and costing.” He did spend some time explaining the CRL as well.
  • Bob proactively tackled the notion that we could simply retrofit Rexall Place. He explained the expense that would be required, and pointed out that renovating Rexall wouldn’t allow the Katz Group to achieve its goals. “We’re looking to change the nature of entertainment in Edmonton.”
  • In response to a question about what would happen to Rexall Place, Bob replied: “What happens to Rexall if the project goes ahead is not up to the Katz group.” He also pointed out that Northlands has not shown any desire to dialogue on the issue.
  • Parking of course came up in the presentation. Bob’s slides showed that there are roughly 8470 parking spaces available within a 10 minute walk from the EAD, and roughly 5075 within a 5 minute walk. Bob said the current plan is to build between 1500 and 3000 parking stalls in the EAD.
  • When asked about the Greyhound bus station and other surrounding development that might be considered “urban blight”, Bob said he has high hopes that Gene Dub will do something with the land when the bus station lease expires.
  • When asked about sustainability, Bob said the vision is to be “absolutely green”.
  • The very first question that was asked of Bob was what happens to the less fortunate who may be displaced by the development, or who simply can’t afford to access the facilities. Bob reiterated that some elements of the EAD are intended to be public gathering spaces, and did confirm that dialogue with agencies and other partners is ongoing, but said that “you can’t always reach every demographic.”
  • Some of the projects Bob referenced as potential examples during his presentation include: Hudson Yards in New York, Rockefeller Center in New York, British Museum in London, BCE Place Galleria in Toronto (which is actually classified as public art by the City of Toronto), and Fulton Street Transit Centre in New York.
  • Bob finished with his call to action, asking anyone with values similar to the Katz Group, to help. “We believe now is the time where Edmonton needs to be bold.”

Edmonton Arena District Meeting

The Katz Group has gotten a bit of a free ride in the media over the summer thanks to the City Centre Airport issue, but they’ve used that time to continue consultations with a wide range of individuals and organizations.

Check out the #yegarena hashtag on Twitter for updates.

I should point out that I did have permission to tweet and write about the event. I don’t think it was really meant to be off-the-record; the Katz Group just wanted the chance to chat without the media around. But of course, nextgeners like me are never far from an Internet-enabled device!