Proposed Downtown Arena: Response to Council’s Questions

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.