Nearly 50 years after it was first signed, the Citadel Theatre’s lease with the City of Edmonton will expire in September.
One way or another, Edmonton will take over the building and the repair bills — which are expected to reach tens of millions of dollars.
The non-profit has operated and maintained the building since 1976 but leased the land from the city.
As per the original agreement, once the lease expires at the end of September, the city will be responsible for the building.
For more than a year, the non-profit and the city have been negotiating a new lease.
It would see the Citadel continue to look after the janitorial duties, utilities, insurance, security and property taxes of the theatre.
The city would become responsible for the capital renewal, repair and maintenance.
“The opportunity for us (would be) to be able to focus on what we do best, which is theatre production and presentation, and less focus on the building maintenance,” incoming executive director Jessie Van Rijn told Global News.
The Citadel would pay $1 each year for the next 10 years. It would also introduce a $2 fee to all tickets, paying the city those fees at a minimum of $100,000 a year.
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That would pale in comparison to the expected costs.
In a report presented to executive committee on Friday, administration said the city expects it will need $375,000 for tools and other items as it takes over operation and maintenance.
It’s estimated operating funded repair and maintenance would cost another $1.36 million each year.
The nearly five-decades-old building is also increasingly in need of repairs, including to the roof.
The report says capital renewal costs over the next decade are estimated to be about $56.2 million and $131 million over the next 25 years.
If no lease is signed, city staff estimated the building would cost the city about $800,000 per year to own.
None of the costs are figured into any budget right now and would come to councillors in the fall.
The city is admittedly cash-strapped, raising property taxes by nearly 9 per cent this spring.
Through 2032, it expects to be short $4.8 billion in capital renewal investment. That means that if approved, repairs to the Citadel could delay repairs to other city-owned facilities, potentially leading to service impacts.
Friday, councillors pointed out that while the costs are high, the city would be responsible for the building even without signing a new lease with the non-profit.
“Being left with a building without a core tenant like the Citadel would not be a good outcome for anyone,” Ward Métis Councillor Ashley Salvador told media.
“So this is not about whether we can do or not do it, it is about the best way to do it,” Mayor Amarjeet Sohi added.
The Citadel has seen traffic increase as of late. It expects to bring in $14 million in revenue during the 2023-2024 fiscal year, thanks to an estimated 120,000 visitors.
“After the pandemic and after a couple of tough years getting people downtown to see shows, we’re seeing that return and that excitement about live theatre,” artistic director Daryl Cloran told Global News.
The Citadel currently gets grants from both the federal and provincial governments. Mayor Sohi raised concerns about whether those could be impacted once the city takes over the building.
He pointed out that the province’s Bill 18 would require provincial approval for the city to get those grants.
“It’s a huge curveball, there’s no question,” interim executive director Alan Nursall told councillors.
The proposal needs approval from council as a whole, which could happen later in May with the new lease being implemented in October.