Final piece of funding for downtown arena approved
Groundbreaking slated for Spring 2014
May 15, 2013 - The final piece of funding for the downtown arena has been approved by City Council, paving the way for the project to move ahead and contribute to the revitalization of Edmonton’s downtown.
Council approved the following capital profile for the arena project and associated infrastructure:
- $279 million from Community Revitalization Levy (CRL) and other incremental revenues (increased parking revenue, reallocation of existing subsidy paid to Northlands and new taxes from business in the arena)
- $125 million from ticket surcharge on all events in the new arena
- $137.81 million from lease revenue for the Arena
- $23.68 million in cash from EAC
- $25 million from other government sources
An important development in today’s discussion was Council’s agreement to rescind a previous motion that drew on the increase in Municipal Sustainability Initiatives funding to service $45 million in debt; the CRL will be used to cover these costs instead.
“This is an outstanding day for Edmonton’s downtown and our city. This project is without a doubt the most significant investment that we have made in our downtown in the last decade,” says Mayor Stephen Mandel. “This building will become a beacon in our downtown and will foster a new sense of energy that will spark further development and investment in the heart of our city.”
On May 9 members of the Capital Region Board representing 95 per cent of the population served by the board supported Edmonton in applying for its allocation under the provincial Regional Collaboration Program. The City will submit the application as soon as the program’s guidelines are defined.
Council also approved first reading of the Borrowing Bylaw, the mechanism that will allow the City to borrow the money necessary to build the arena. Money will not be borrowed until it is required for the project.
The City will repay its share through the CRL and other sources that do not include property tax increases (new parking revenues, reallocation of current subsidy paid to Northlands).The Katz Group’s portion will be repaid through an annual lease payment while revenue from the ticket surcharge will be used to cover $125 million and associated interest.
Council’s decision also means the Master Agreement, that outlines the terms and conditions of the arrangement, between the City and the Katz Group can now be finalized and signed.
"This is a great day for Edmonton. It's been a long road for everyone involved, but the result is a landmark agreement that will drive investment in our city, help revitalize the downtown core and put the Oilers right in the heart of our community where they belong," said the Chair of the Katz Group, Daryl Katz. "I want to thank Mayor Mandel, City Administration and Members of Council for the extraordinary time and effort they have given to get this project over the goal line, and the Capital Region Board and the people of Edmonton for their support."
The arena project team continues to advance the building’s design and anticipates having a Guaranteed Maximum Price (GMP) ready to take to Council in early 2014. Once the GMP is approved, construction on the site will begin. The facility is slated to open in September 2016.