Tag: arena

Downtown Edmonton’s momentum continues with exciting announcements

What an exciting time for downtown Edmonton! We’re in the height of festival season, with the annual K-Days Parade and Taste of Edmonton both bringing thousands of Edmontonians into the core, and we seem to be in the height of announcement season too. Here’s a look at some of the encouraging downtown-related news that has made headlines over the last week or so:

Jasper House & North on 106 Street

Toronto-based developer Brad Lamb has announced two new condo projects in Edmonton called Jasper House and North. Located on 106 Street at 102 Avenue, the 36-storey Jasper House will get rid of another empty parking lot downtown. Sales are expected to begin this fall, with construction starting next year.

Jasper House

If all goes well with Jasper House, Lamb would undertake North, a 40-storey tower that would be located on 105 Street at 103 Avenue. Together, the two buildings represent about $260 million of investment.

You can register to receive updates on Jasper House here. No website exists yet for the North project.

More: Edmonton Journal, Metro Edmonton

Stantec Headquarters in the Edmonton Arena District

This morning, Stantec announced that their search for a new headquarters has come to an end with the signing of a lease agreement for a brand new building inside the Edmonton Arena District:

“This agreement represents our commitment to the community of Edmonton and the downtown redevelopment,” said Bob Gomes, president and CEO of Stantec. “Our decision is the result of an intensive selection process over the last year, and we are looking forward to moving ahead with design and construction.”

The new building will allow Stantec to consolidate its five current Edmonton locations into one. As the news release says, it’s “a true commitment to the city’s downtown.” The company has about 1,500 employees in Edmonton. Their existing leases are all up by 2019. Back in May, Stantec indicated they had narrowed their search for a new home to downtown.

Proponents of the downtown arena deal will no doubt hail this as a major victory, while critics will point out that we’re simply moving around offices that already existed in Edmonton. I think it’s an encouraging sign for the arena district, and I hope Stantec’s decision will help to attract outside investment as the district evolves. We still aren’t seeing the promised dominoes falling, but at least this is a very encouraging step in the right direction. The Katz Group’s Bob Black said to expect further announcements related to the district, so let’s hope this is a sign of things to come!

The specific location within the EAD site hasn’t been announced, but there’s speculation it could be where the Greyhound Station exists today. Preliminary design work for the new building is underway, and Stantec anticipates sharing more information at a press conference in late August.

More: Edmonton Journal, Metro Edmonton

Alley of Light Pocket Park Redevelopment

Michael Phair has shared an exciting update on the Alley of Light project! The initiative has long wanted to redevelop the pocket park behind the Sobeys building adjacent to Icon I, and it looks like that will finally be happening.

“The City of Edmonton has awarded a contract to Paving Stone Plus and construction will likely begin in the week of July 28-August 1.”

The work involves new paving and stone work, new power distribution, security lighting, and LED bollards, new retaining walls, chairs and tables to seat 64, and landscaping.

Alley of Light Pocket Park

Downtown certainly could use more functional, attractive park space, so this is great to see. Kudos to Michael Phair and the entire Edmonton on the Edge team for persevering! Hopefully Scott Park on 105 Street and 102 Avenue will be moving ahead soon too.

Calgary’s Mainstreet Equity sees downtown opportunity

It’s not clear exactly where in the Edmonton Arena District that Calgarian landlord Bob Dhillon is consolidating land, but a recent article in the Journal highlighted his interest in Edmonton’s rapidly improving downtown:

“While many Calgarians look on with envy as the Edmonton Oilers plan a magnificent new building to play in, landlord Bob Dhillon sees only the opportunity.”

Mainstreet’s Edmonton portfolio currently consists of 3,683 units at 119 sites, according to the article. It’s great to see interest in the Edmonton market from a Calgary-based business!

Downtown Perception Survey

For all of these reasons and more, perceptions about downtown are changing. The Downtown Business Association is hoping to learn more about the opinions that Edmontonians have of downtown and is running an online survey. Preliminary results show that more than half of respondents say their opinion of downtown has become “more favorable” over the last year. The full results will be released on August 27.

Sign of things to come?

All of these new projects will join existing ones already underway, including the Fox Towers, Ultima, Kelly Ramsey Building, Symphony, new Royal Alberta Museum, and many others.

Kelly Ramsey Building Construction

This is what happens when thousands of people start living in the downtown area. Demand, demand, demand. The next few years are going to be extremely exciting!

Photo Tour: Rogers Place construction is well underway!

Construction is well underway on Rogers Place, and yesterday morning the local media had the opportunity to see the activity from above and up close. You can check out the live view here.

We started off with a trip to the top of the EPCOR Tower. From there, you get an excellent view of the 9.5 acre site. When finished, Rogers Place will be about 60% larger than Rexall Place is today. It’ll seat 18,641 for hockey games, and up to 20,734 in a centre stage concert setup.

Rogers Place Construction Update

The former site of the Staples is now empty, and there was limited activity there yesterday.

Rogers Place Construction Update

The Baccarat Casino remains open, and will remain open for as long as they want. The City of Edmonton owns the land and is now their landlord, but the arena development will not encroach on the area where the casino is in any way. It seems strange to me that it could remain open next to the arena, but apparently there’s a strong possibility that’ll happen.

Rogers Place Construction Update

The LRT station is more or less finished, with just signaling to go. There will be some impact to the station once the 5,300 square foot connection to Rogers Place is constructed.

Rogers Place Construction Update

After the media had assembled, the brief press conference was held. On hand to answer questions were: Rick Daviss, Manager of Corporate Properties at the City of Edmonton; Bob Black, Executive VP of the Edmonton Arena Corporation at the Katz Group; Mike Staines, Construction Manager at PCL; Patrick LaForge, President of the Edmonton Oilers; and Dan Valliant, SVP and Project Executive for Rogers Place with ICON Venue Group.

Rogers Place Construction Update

PCL’s Mike Staines gave an update on the construction taking place. “We have around 30 of 400 columns in place, and two or three elevator shafts today.” There are about 150 craftsmen and craftswomen on site working. The steel and concrete structure will be erected starting this fall with two cranes that are three times the size of the ones there today. That work will take about a year.

Next we hopped on a bus to go across the street to see the construction up close.

Rogers Place Construction Update

The crew had setup a PCL flag to denote where Centre Ice will be. About 80,000 m3 of material will be excavated, with up to 300 truck loads removed each day.

Rogers Place Construction Update

Here you can see how deep they have excavated the site, and also the wall that has been setup to separate the arena project from the casino.

Rogers Place Construction Update

About 10,000 pieces of structural steel weighing 9,000 tonnes and 25,000 m3 of concrete will be used in the construction of Rogers Place.

Rogers Place Construction Update

Across the street, there is limited construction activity thus far. Eventually the Winter Garden will cross 104 Avenue, connecting the north and south sites. I expect that’ll be the focus of a future construction update.

Rogers Place Construction Update

Bob Black addressed questions about the arena district right away: “There’ll be much more to come in the coming months as the project evolves. I know that many of you will have questions on the district, and we will be providing details on that very soon. But today, the focus is on Rogers Place.”

Rogers Place Construction Update

Construction has been hugely impactful on the residents of Square 104, but the City of Edmonton’s Rick Daviss said that communication has been good and the City and Katz Group have been quick to take care of any issues that have come up. The City is meeting regularly with residents and business owners in the area.

Rogers Place Construction Update

Rogers Place is slated to open in the fall of 2016. It will bee the first LEED Silver-certified NHL arena in Canada.

Rogers Place Construction Update

You can see more photos of the construction site here.

Green light given for Rogers Place, Edmonton’s new downtown arena

Construction on Rogers Place, the future home of the Edmonton Oilers, will begin in March now that the $480 million guaranteed maximum price has been met. The announcement was made at a press conference today at City Hall that featured a rare public appearance by Daryl Katz.

Downtown Arena Press Conference

The new downtown arena will seat 18,641 for hockey games, and is being described as “the most technologically enabled sport facility in all of North America” (details on what that means are still to come, I presume). The arena is part of a $606.5 million package that includes a community rink, LRT connection, pedway, and the Winter Garden.

The stage today was backed with hockey boards while a face-off circle emblazoned with the Oilers logo sat in front. Giant renderings of the new building flanked each side. Mayor Don Iveson, City Manager Simon Farbrother, Daryl Katz, and Ian O’Donnell from the Downtown Community League (DECL) were the speakers.

Downtown Arena Press Conference

I have to say the press conference seemed a bit over the top for what was announced. It was very unlikely that the guaranteed maximum price wouldn’t be met, and even if it hadn’t been met, that would have been little more than a speed bump. Council would have voted, and construction would have gone ahead one way or another.

Very little that was announced today was new (would it have killed them to talk about the building, even just a little?). Most of the speeches consisted of the various parties involved thanking one another, and extolling how great the new arena will be for Edmonton. And we heard the same old arguments once again. City Manager Simon Farbrother said:

“With this announcement, we are able to announce two very significant goals for this city. The first one this does is helps us on that continued journey of building a great downtown. The second one it does is it supports NHL hockey in Edmonton for the very foreseeable future.”

Nevermind that downtown has been on the upswing for years and that the threat of losing the Oilers was misleading at best.

But those arguments are over and done with – today was about the future, as Daryl Katz said. I suppose his attendance was meant to suggest a sense of finality, but I’m not sure that came across. He certainly didn’t look like he wanted to be there. Sure, he expressed his relief at getting to this point and his thanks to all involved, but he looked and sounded to be going through the motions more than anything else.

Downtown Arena Press Conference

Why was DECL invited to participate? Maybe it was just to play the role of “downtown supporter” in the story. I hope it wasn’t to represent the members of the public that were apparently involved in the decision, because just two or three people on the board were involved. As someone who both lives and works downtown, I don’t feel that DECL represented me in the process (this is a great example of how community leagues are setup to promote “tick the box” public engagement).

But I guess that was the point of today’s event – the process is done, the arena will be built. I’m happy that we’ve reached this point and I do think the arena will have a positive impact on downtown. I have great respect for everyone who has gotten involved, whether it was to support to the project or whether it was to ask hard questions. There are still questions remaining too. Will the remaining government funding be confirmed? What will happen to Rexall Place?

One thing that’s clear is that the arena won’t succeed on its own. It needs a district surrounding it. In his remarks today, Daryl Katz made mention of that development, saying that we can expect to learn more this spring. I have heard the project described as a series of dominoes, with the new City tower following the arena, and more still to fall. I sure hope that’s the case.

Downtown Arena Press Conference

There were a couple of other interesting tidbits of news shared today:

  • Katz Group Executive VP John Karvellas confirmed that the Oilers have an agreement in place to continue playing at Rexall Place until the new facility opens in time for the 2016 season.
  • MacEwan University has come to the table and will be contributing $2 million to the community rink to “increase capacity and improve functionality”.

You can see more photos of the press conference here. The Oilers have audio and video of the press conference available here. The City has made renderings of Rogers Place available here.

Edmonton Vaporware: The Arena District

Though the video game industry probably comes to mind first when you hear the term vaporware, it is increasingly being used to describe announcements and predictions that never come to pass in other industries too. Like construction. The construction of, for instance, big “transformative” projects that will unfold over a number of years. Sound familiar?

arena district

As you know, Edmonton’s shiny new downtown arena is being funded in part through a Community Revitalization Levy (CRL). The idea is that “projects funded by the CRL spark new developments, and property values rise on existing developments.” From the beginning, the arena was sold to Edmontonians as a catalyst for additional downtown development. It was clear that additional development would be part of the success of any deal. Here’s what the Katz Group’s Bob Black told the Journal in February 2010:

“In order for citizens of the city to have a reasonable assurance that the community revitalization levy debt will be retired by the city, then you have to have that collateral development.”

Even earlier than that, in September 2009, the Downtown Business Association’s Jim Taylor was arguing for ensuring that surrounding development took place:

“Somebody has to say that they’re building a casino or a hotel there, and you don’t get any money from the CRL unless those projects are part of it. So that funding is only available if those projects are there. It’s not, ‘We’ll do a CRL and hope that those projects are there. It’s: ‘The CRL is not available, the money is not borrowed, unless those specific developments are there too.'”

Of course, he and many other business leaders softened their stance over the years and no such requirement was ever put in place. In fact, I’d say the volume about what would be built was turned up, though details and commitments were always lacking.

In January 2011, U of A provost Carl Amrhein talked about the creation of “a university village” for student housing as part of the district. Also that month, local realtor Terry Paranych said if the arena goes ahead, he’d “build two condo towers, one 40 storeys, one 50 storeys.”

In December 2012, the Katz Group and its partner WAM Development Group stopped talking about individual projects and promised something much grander:

“If a new arena is approved, the Katz Group and partner WAM Development Group hope to push ahead this spring with $2-billion worth of nearby development, including 28 and 32-storey office towers. Plans also include two 35-storey or taller condominium highrises, a 10-storey condo building, a 26-storey luxury hotel and other commercial space along with a proposed open-air Oilers Plaza.”

Another article discussed potential tenants:

“Main anchor tenants are expected to include a VIP theatre complex, a grocery store and the headquarters of a major telecommunications company, according to a 60-page overview of the district by the Katz Group and partner WAM Development Group.”

Yet despite all the hype, there have been no commitments. It’s all just talk. Just vaporware.

In March 2011, the Journal’s Gary Lamphier made this clear:

“Not a single other developer has been willing to publicly commit hard cash toward the project. Despite recent talk from the city’s chief financial officer about proposed hotels, a casino and other projects, she hasn’t identified a single one by name. I’ve talked to roughly a dozen developers, consultants and commercial real estate brokers over the past 15 months in an attempt to flush out anyone who is willing to stand up and be counted as a participant in the arena redevelopment. I haven’t found one.”

The arena deal was finally approved, but still there have been zero commitments. And so we find ourselves in January 2014, clinging to the hope that a new tower for City of Edmonton employees will finally kickstart the development:

“Jim Taylor, executive director of the Downtown Business Association, said putting up an office tower a block from the arena would likely stimulate other development.”

Avison Young’s Cory Wosnack is even more optimistic:

“If WAM and Katz Group are successful (with the office tower proposal) — and I believe there will be an announcement within days — then the hotel deal can be announced, the retail can be announced and the domino effects begin.”

Is anyone still buying this nonsense?

Rogers Place

Perhaps the worst part about the proposed tower is that municipally-owned or leased properties do not pay property tax. Which means that all or most of the tower would not contribute to a lift in taxes within the CRL boundary. That land could have been used for a revenue-generating property instead, one that would actually help to pay down the CRL debt.

What about the Ultima Tower, you say? It was going to go ahead with or without the arena. What about the proposed, 71-story Edmontonian tower? Like the Aurora project before it, The Edmontonian has been vaporware since at least 2007, so there’s no reason to expect anything different now.

We’re being played, and the sad thing is, we’ve seen this story before.

In the world of video games, some have managed to shed their vaporware status and go on to be quite successful. Maybe that should give us hope that the arena district in Edmonton can do the same. Maybe there really is a master plan and an order in which these projects will unfold. But I’m not holding my breath.

UPDATE 2: There was some confusion about the paragraph above on taxation, as you’ll see in the comments below. I received clarification from the City. If the City of Edmonton leases space inside a building owned by a private entity, the space leased by the City is exempt from taxation. The remainder would be assessed and taxed as any other property would be.

Roundup: Edmonton’s downtown arena will be called Rogers Place

This afternoon at Startup Edmonton, Rexall Sports (or should that be the Edmonton Arena Corporation) announced that it has reached a deal with Rogers Communications on the naming rights for Edmonton’s new downtown arena. When it opens in 2016, it’ll be known as Rogers Place.

Rogers Place

Here’s what the folks involved had to say. First, Daryl Katz:

“Today’s announcement helps make the new arena a reality and underscores its potential to make downtown Edmonton a magnet for our community and for new investment by world-class companies like Rogers.”

Here’s what Rogers Communications Executive Vice-President and Chief Marketing Officer John Boynton said:

“Today’s announcement builds on our long-term commitment to the Edmonton Oilers, its hockey fans and our investment in Alberta. Rogers Place will be one of the most technologically enabled stadiums in North America; we look forward to bringing passionate fans a connected game experience powered by the country’s fastest LTE network.”

And here’s what Mayor Don Iveson said:

“This is a great day for Edmonton’s downtown and our city. Rogers Place will become a beacon in our downtown, one that will foster a new sense of energy that will further attract development and investment in the heart of our city.”

Here’s a look at how the arena is envisioned to fit into the new downtown:

The name certainly didn’t inspire everyone, but some were more annoyed by the revenue than the name. Under the terms of the agreement between City Council and Daryl Katz, his Edmonton Arena Corporation (EAC) would receive revenue from the naming rights:

EAC will operate the new arena and pay all operating and maintenance expenses, and will receive all operating revenues, including naming rights and parking revenue.

Of course, no financial terms were disclosed as part of today’s announcement. Rogers said the deal is part of its previously announced investment into Alberta:

Rogers announced on October 1st a $700M commitment over the next four years to further enhance and expand Rogers LTE – Canada’s fastest LTE network, open additional retail locations, fuel business growth and continue to build its presence in sports in Edmonton and across Alberta.

In addition to network enhancements, new retail locations, and new business services, Rogers acquired the official sponsorship and marketing rights for the Edmonton Oilers, Edmonton Oil Kings, and Rexall Place.

Rogers Place

I’m happy that the arena has a name and has moved another step toward becoming a reality, but I do think this is a missed opportunity for Edmonton. Rogers benefits from this deal obviously, but Edmonton doesn’t because “Rogers Place” could be anywhere. This is something we get wrong so often, partly because of our “capital city curse” as I like to call it, but partly because we don’t have a strong brand to hang these sorts of things on. Sure, most arenas and sporting complexes carry a sponsored name, but isn’t that a great opportunity to be different? Instead, it’s all about the money.

David Staples seems to agree with me on this point:

“The first naming of the arena, back in 1974 when it was called the Edmonton Coliseum was the best. That was the right name for our building. It still is.”

Yup. Too bad.

Here’s some other reaction from around the web:

https://twitter.com/OilersNation/status/407971780406435840

https://twitter.com/EricWarnke/status/408089659978571776

https://twitter.com/uncleheth/status/408084022309289985

In a vote on the Cult of Hockey blog, “Rogers Coliseum” seemed to be the favorite choice, ahead of “Some other name entirely” and “Rogers Place” in last. In a poll on Global’s website, more than 60% said they didn’t like the name “Rogers Place”. You can watch an overview of the announcement at CTV Edmonton. Also check out the Huffington Post’s coverage here.

You can learn more about Rogers Place on its new website. You can also follow it on Twitter.

Edmonton’s downtown arena is finally approved; get on board and help make it a success

City Council voted in favor of the arena today by a vote of 10-3, and while there are some things still outstanding (final approval of the CRL, approval of the regional grant) the project is most likely going to move ahead. This one feels final. We could argue about the deal forever, but it’s now done. I’m not happy about all the specifics, but I’m happy that we can move past this endless debate and get on to more important things.

Now that we know there’s going to be a shiny new arena downtown, it’s time to get on board and help to ensure that the project is as successful as possible. The hard work doesn’t stop with approval of the deal…it’s really just beginning.

There’s a lot of outstanding questions that need to be explored, including:

  • How does the deal impact the City of Edmonton’s debt and debt servicing levels?
  • What will the marketing/branding partnership with the Oilers actually look like?
  • Will the Gretzky statue get relocated?
  • What happens to the Baccarat Casino?
  • What is the impact of this decision on Rexall Place and Northlands? Can we sustain two large venues?
  • I’d rather see local restaurants and shops in the new arena than chains. How can we ensure the arena benefits local?
  • How does replacing MSI funding with additional CRL funding impact other downtown projects? How can we ensure those still move forward?
  • Where is the list of property developers ready to announce projects in the downtown area? What else do we need to do to ensure that surrounding development goes ahead?
  • What happens if the CRL doesn’t result in the lift we all hope for? What’s plan B, C, and D?
  • If the arena is the carrot to entice speculators to do something with their empty parking lots, taxation/policy changes are the stick. How can we get the stick implemented too?
  • How are Administration and Council going to learn from this to ensure future large projects follow a much smoother process, with more communication and transparency, and less ambiguity?
  • How will construction of the arena impact residents and businesses downtown, especially considering it’ll take place alongside a number of other large construction projects like the LRT?  How can we reduce that impact?
  • What else is the City of Edmonton prepared to do to support downtown’s ongoing revitalization? How soon can we get other related projects off the ground?

And my favorite:

  • When will Mayor Mandel announce he’s not running in the October election?

In his closing remarks, Councillor Henderson noted that the downtown arena “is not a magic wand”. For it to work, a lot of other things need to happen alongside and around the project. It’s a big step, but it’s just one step, in ensuring our downtown continues to grow. We need to make sure we take those other steps too.

Edmonton’s downtown is being held hostage by the arena

Edmonton’s downtown hasn’t gotten its fair shake when it comes to capital funding over the last decade. There’s now a pretty pie chart that magically appeared to illustrate that (I’m not sure where the data comes from specifically, but it seems more or less accurate to me). I am totally on board with the idea that we should be putting our money where our mouths are. If downtown is so important to Edmonton, and I believe it is, we should be willing to back that up with dollars.

I think it’s fair to say I’m one of the biggest downtown supporters in the city. I talk about it all the time. I’ve organized plenty of events for downtown. I seeded the I ❤ YEGDT campaign. I built and operate the website. I work downtown. Sharon and I chose to live downtown and purchased a condo here.

With all of that said, I want to support what the newly formed Downtown Vibrancy Coalition is trying to do, but I’m finding it very difficult to get on board. Here’s what their backgrounder states:

“If we lose the arena – over a missing $55 million – approximately $3 billion in downtown revitalization projects will be shelved or scrapped. The arena represents only one-sixth of the proposed investment. But if the arena fails, Edmonton’s downtown will lose $2 billion of private investment in the related entertainment district – new hotels, office towers, retail shops, clubs – as well as downtown parks, a river valley promenade and Jasper Avenue streetscape enhancements.”

Every single time I read that, I can’t help but think: bullshit. Is downtown important or not?

This all stems from the August 2011 decision to make the proposed arena the centerpiece of the Community Revitalization Levy. I wrote in that post that I was worried we’d be doing more harm than good for downtown by tying the two together. Now, as we’re about the lose the arena, the impact of that decision is becoming clear. We’ve put all of our eggs in one basket, or at least that’s what it looks like.

But I see no reason why downtown revitalization has to die along with the arena. The notion that you need an anchor or catalyst project for a CRL to work is false (as proven by the existence of CRLs for The Quarters and Fort Road). Furthermore, we know that programs like housing incentives work and lead to the outcomes we want. There are ways to ensure downtown gets the funding it deserves with or without a shiny new arena. Why would everything need to be shelved or scrapped?

I would love to see a new arena built downtown, and I do agree that $55 million seems like a surmountable barrier. But I don’t like that MSI funding is being used to help pay for the arena and I really don’t like that our downtown is being held hostage by it.

Full disclosure: I’m a member of the Downtown Vibrancy Task Force and of ONEdmonton.

Edmonton City Council and Katz Group move forward on new downtown arena

Today was the latest episode in the downtown arena saga and it was a weird one. Council received an update from Administration on negotiations with the Katz Group and ultimately voted 10-3 to move forward with an altered deal, though one that still closely resembles the framework that was approved in October 2011. Today is being called a “landmark” day for Edmonton, and supporters of the arena are understandably happy that the project is moving ahead, even though they may not be entirely sure why.

Let’s start with what’s new. The price of the arena has gone up $30 million to $480 million, and that pushes the total cost of the project (including the community rink, land, and other elements) to more than $600 million. The other changes include:

  • The additional $30-million for the arena over the previous framework will be split between the City and the Katz Group
  • The LRT connection, solely funded by the City, has been reduced from $17-million to $7-million
  • Katz Group will pay for the slightly increased costs of the Winter Garden
  • Under the new framework, the City will own the arena and land, and the Katz Group will pay all operating costs and receive all revenues

There are some other changes too, such as a property tax clause that no one seems to understand. But the biggest difference? Congratulations and optimism all around. Speaking to the media afterward, Mayor Mandel declared:

“It’s 100%, a deal is done. All the other stuff is just going through some steps. I’m absolutely totally confident that we will go ahead…”

And here’s the statement from the Katz Group:

“This is a milestone agreement for a world class facility that will drive the ongoing revitalization of downtown Edmonton,” said Daryl Katz, Chair of the Katz Group. "It also helps to ensure the Oilers’ long-term sustainability in Edmonton. This has been a challenging process for all concerned but we are confident we will all look back on the end result with pride and satisfaction at what we have achieved. I want to thank City Council and City Administration for their work on this file. This is a great day for Edmonton and we are excited to get to work on realizing this incredible opportunity.”

You may recall that when the original agreement was passed in October 2011, there was quite a bit of optimism then too. But it wasn’t along the lines of “the deal is done” as much as it was about moving forward. To be fair, it’s not like there was cheering in Council Chambers today, as Paula noted:

“After all the years of negotiations, the vote was greeted by silence — followed by an awkwardly belated round of quiet applause from the Katz Group and their supporters.”

But for Mayor Mandel and Daryl Katz in particular, their comments represent a complete turnaround. Last September, the mayor was “frustrated” and issued a statement calling for “the Katz Group to clarify its full position.” In response, Daryl Katz wrote a letter in October in which he called for “more time and political leadership.” He said negotiations had “gone backwards” and noted there were 15 open issues. In December, the Mayor said “we’ve gone as far as we’re going to go” and said a deal had to be reached within six weeks.

My read of the report suggests fewer than 15 changes were made, but maybe Katz was just grandstanding in his letter. What’s most interesting of course are the things that have not changed.

There’s still $100 million missing from other orders of government (plus another $14 million for the community rink). Mayor Mandel today said he is “very confident” that the province will come to the table for that amount, but no one knows when or how. There’s also no guarantee that that province would approve the proposed downtown CRL (though it seems unlikely they would reject it) nor that the Katz Group will actually invest in the commercial development surrounding the arena (it’s all “subject to commercial viability”).

I don’t see much of a difference between today’s deal and the agreement from October 2011, but apparently it was enough for Mandel and Katz to declare that we’ve crossed the finish line.

So what’s next? Well someone needs to come forward with $114 million, for starters. Given that the City expects construction to start as early as August 2013, getting the remaining funding issues sorted out would seem to be the priority. But perhaps more importantly, this agreement significantly increases the likelihood that Mayor Mandel will decide not to run again in the next election. As Paula noted, that means “a new political game is just beginning.”

I’ll give Don Iveson the last word on today’s proceedings: “I don’t want our city to fight about this anymore. It’s been an open wound in Edmonton.”

The arena deal is dead, but the City of Edmonton came away the victor

After a heated discussion on the arena yesterday afternoon, City Council voted to cease all negotiations with the Katz Group and directed Administration to explore alternatives. Here are the three motions they passed:

  1. As a result of Mr. Katz’s letter and unwillingness to have an open discussion with Council and the frustration of the Interim Design Agreement, all negotiations and ongoing City work related to the October 26, 2011, framework cease immediately.
  2. That Administration provide a report, as soon as possible, to City Council to report on the completion of the cessation of negotiations and the status of the City’s current, transferable investments in a potential downtown arena project.
  3. That Administration provide a report outlining a framework for Council to explore potential avenues to achieve the long term goals of sustainable NHL Hockey in Edmonton.

That means the arena as we know it is dead, but it doesn’t mean that a new arena is completely off the table. With that third motion, Administration is empowered to explore alternatives to working with the Katz Group, which could mean the City builds a new arena by itself. Here’s the full video of Mayor Mandel and City Manager Simon Farbrother answering questions about yesterday’s meeting:

Supporters of the arena will no doubt lament the fact that we appear to be no further ahead than we were four years ago, but I don’t think that’s true. Here are some of the reasons that I think the City and Council came away the victors in this whole debacle:

  • The City owns the land. No matter what happens with the arena, that land was a great investment. And I’d much rather have the City own it than some speculator who is just going to sit on it.
  • The City owns the design of the arena. Last October, Council directed Administration to spend $30 million to get the design completed to 60%. The City can take this design to a new partner or use it as the basis for building the arena itself.
  • The City now has a head start on a CRL for downtown. I think a case could be made for a downtown CRL even without the arena. Maybe it would be scaled back, but all the work that has already been done to develop the CRL plans could be reused.
  • Council no longer look like the bad guys & gals. I’m no fan of the way that Council handled the negotiations over the last couple of years, but fortunately for them Katz handled things even more poorly!
  • It may seem as though Katz has the upper hand with the ability to move the team elsewhere, but that has always been an empty threat and remains so. The NHL still wants hockey in Edmonton, and I honestly believe that Katz wants to keep the Oilers here too. If anything has changed, it’s that the NHL would be even less likely to allow a move now that Council has done everything it can to work with the Katz Group.

I’m less confident this will actually come to pass, but I was encouraged by comments made yesterday by one of the Councillors that the “unprecedented” use of in-camera sessions should be avoided in the future. It’s clear that the private meetings did more harm than good in progressing the deal and getting Council what they wanted, and I hope that means Council will avoid in-camera sessions in the future.

The arena is getting all the attention right now, but in the grand scheme of things, there are far more important issues for Council to be dealing with. More than 150 neighbourhoods need renewal and it’s going to take billions to maintain all of that infrastructure. At the same time, Edmonton’s population and economy continue to grow much faster than the national average and that means big pressures in terms of where we put new infrastructure, how we move people efficiently throughout the city, etc. As soon as they were done with the arena issue yesterday, Council starting talking about the LRT.

Back to business.

Should MSI funding be used for Edmonton’s downtown arena?

Even if you’re optimistic and think the Katz Group and the City can resolve their current differences, let’s not forget that the arena project is short at least $100 million. Under the current agreement, that amount is slated to come from “other orders of government” such as the province. Over the last year or so, various ministers have stated that the province will not be providing any new funding for the arena. In May, Municipal Affairs Minister Doug Griffiths said:

“The province is not going to write a separate cheque for a particular project. We provide MSI funding for every municipality in the province, which is $896 million this year. We have proposed that’s going to increase. The reason why we do so is municipalities can choose what their priorities are.”

While the downtown arena project would certainly be eligible under the Municipal Sustainability Initiative (MSI), I have long wondered if it would really make sense to use our limited funding for that purpose. How much MSI funding do we have? What have we already spent? Can we really count on an increase? These are some of the question I’ll explore below.

What is the Municipal Sustainability Initiative (MSI)?

MSI is a way for the province to provide cities, towns, and other municipalities in the province with funding for infrastructure projects. From the MSI website:

In 2007, the $11.3 billion MSI program was announced to provide predictable, sustainable funding for our province’s municipal infrastructure projects to keep our municipalities strong.

The objectives of the program are:

  • To work in partnership with municipalities to manage growth pressures;
  • To provide municipalities with sustainable funding; and
  • To support infrastructure needs.

All eligible municipalities in the province receive an amount each year that is calculated based on the following formula:

  • 48% is allocated on a per capita basis;
  • 48% is allocated based on education property tax requisitions;
  • 4% is allocated based on kilometers of local roads.

A wide range of municipal projects are eligible for MSI funding, which means that each municipality can decide where the money is best spent.

How much MSI funding will the City of Edmonton receive?

Edmonton is slated to receive a total of $2.1 billion by the end of 2021. From 2007 through 2011, we received about $567 million. In order to take advantage of favorable economic conditions, Council also decided to fast-track another $250 million or so, which means we have used roughly $850 million in MSI funding already. This chart shows the amount of funding per year (with FT designating the fast-tracked amount):

That means we have roughly $1.3 billion still to come over the next ten years. The projected amounts for 2012-2021 take into consideration repayments on the fast-tracked amount. The City’s fast-tracking strategy requires an annual repayment of $57 million, including interest for five years, reducing the amount of MSI available in 2012-2016 by $285 million.

What have we spent our funding on so far?

The MSI website provides a list of accepted projects by year for each municipality in PDF. I extracted the data for Edmonton, and organized it in a spreadsheet. Based on the description, I categorized each project as either “new” or “existing” to indicate whether it was for a new asset or to rehabilitate/upgrade/repair an existing one. I also assigned each project a category such as “Parks” or “Transit”. Here’s what we have spent per year:

The total spent is roughly $850 million. The big jump in 2009 was the fast-tracked funding, which allowed us to take advantage of lower construction costs.

Here’s the breakdown of new vs. existing:

As you can see, roughly 53% of our MSI funding has been spent on “new” projects.

Here’s the breakdown by category:

The bulk of our MSI funding has been spent on transit and roads. Parks and recreation facilities are the only other two categories that have received more than $100 million in funding.

A total of 82 capital projects were listed, with an average project cost of $9.9 million. No project has cost more than $100 million. The largest project we have constructed so far was the new Centennial Garage in southwest Edmonton, which had a total project cost of $99 million ($89.3 million of which came from MSI). It would be fair to call that project an anomaly however – only one other project, to rehabilitate several roads for $61 million, came with a price tag greater than $40 million.

Can we count on an MSI increase in the future?

MSI funding has always been tied to the economy. The amount allocated to municipalities over the first five years of the program was reduced due to weaker than anticipated revenues. The City of Edmonton had expected to receive $802 million over the 2007-2011 period, about $235 million more than the $567 million it ended up receiving. That does not bode well for an increase in the future.

Both Calgary and Edmonton have been pushing for an improved funding framework with the commitment to develop a big city charter. The outcome of that initiative, slated to be considered by the Legislature in the spring, could impact the way Edmonton receives funding from the province.

Should we use MSI funding for the arena?

According to the City, the average age of Edmonton’s infrastructure assets is 30 years. At the end of 2011, more than 150 neighbourhoods required renewal. An average annual reinvestment of $400 million over the next three years, plus an average annual reinvestment of $450 million over the 2015-2021 period, is the minimum amount of funding required to renew Edmonton’s existing infrastructure to achieve a reasonable state of repair. This is a big challenge, and MSI funding provides only a piece of the pie.

As shown above, our MSI spend has been more or less equally split between new projects and upgrades or rehabilitation of existing assets. A total of $87.5 million was spent on seven new recreation facilities (either brand new, or additions to existing) from 2007 through 2011. Would we have rather spent all of that on the arena? A number of new projects would need to be postponed if funding was allocated instead to the arena. A total of $384.8 million was approved by Council for recreation and cultural projects in the 2012-2014 Capital Budget.

In a poll earlier this year, two-thirds of Edmontonians opposed provincial funding going toward the new arena. An equal number supported fast-tracking the southeast LRT line to Mill Woods. It would seem that the use of MSI funding thus far more or less aligns with the desires of Edmontonians, with the largest share going toward transit projects (though not all of that was LRT-related).

This decision would ultimately need to be made by City Council, and as we approach an election next year, I’m not sure many councillors would be willing to take money away from important neighbourhood renewal projects or new facilities like libraries and parks for the arena.