Northlands asks City of Edmonton to forgive $48M debt during pitch to council

Click to play video: 'Future of Northlands in question'
Future of Northlands in question
WATCH ABOVE: The future of Northlands is very much in question. Not only is there a short deadline for answers, but also a request for the city to forgive tens of millions in debt. Vinesh Pratap reports – Mar 15, 2016

EDMONTON – Northlands has asked Edmonton city council to come back with a decision about its bold plan for the future of the site by Sept. 1.

Northlands made the request Tuesday while pitching its ‘Vision 2020’ to council. The three-pronged plan comes with a cost of $165 million for renovations to the arena, an expansion of Hall D at the Expo Centre, and the creation of a new festival site, replacing the horse racing track.

“We’re here, because you’re our leaseholder and you’re our partner, to advise you that we see substantial risk for the sustainability of Northlands beyond 2016,” Northlands President and CEO Tim Reid said in his pitch to council.

“We think that we’ve been transparent and communicative throughout this entire process. But we do know that Rogers arena opening will happen in October and our business model will change, which is why September becomes such an important discussion point.”

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However, some city councillors were not overly pleased with the September deadline.

“That really kind of ticked me off,” Ward 11 councillor Mike Nickel said. “This is complex… Do you realistically believe we’re going to be able to explore all those options by Sept. 1? Highly unlikely.”

“We’re sitting here in March and we have a deadline of Sept. 1 for, I think, a very complicated scenario,” Ward 3 councillor Dave Loken said.

Northlands asks the city to help relieve debt

In another move, Northlands also formally asked the city to forgive $48 million in debt related to the Edmonton Expo Centre. The loan payments are around $4 million per year, and Reid said the facility loses about $3 million each year.

“We are not going to be able to fix this problem ourselves,” Reid said.

Northlands has been able to make payments up until now because of the revenue coming in from Rexall Place. However, with the Edmonton Oilers and concert industry moving out, Northlands estimates its earning will go from $9.3 million to $600,000 in 2017.

“They’re asking for a $47 million plus, plus, plus forgiveness, so I’m going like, ‘You know what? Maybe you’re not the best team to do this’ so I want to see other options,” Nickel added following the presentation.

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READ MORE: New $165M vision for Northlands includes 7-sheet ice facility, outdoor concert space

Mayor Don Iveson said relieving the debt is “no small ask.” Even if the city can afford it, there are questions around whether or not Northlands’ new concept will make money without having the operations subsidized by the city.

“I think that’s why we want the city to take a look at the business case rather than just take any one organization’s word for it,” Iveson said.

“They’ve done good preliminary work but additional analysis is prudent before the city spends any more money.”

If Northlands can’t find its future, it has a wind-down strategy ready just in case. But there will still be pressure on the city to do something as the issues will fall back on the city if Northlands dissolves.

“Then we pick up the asset and then we decide the partition of the asset, maybe with a new management team,” Nickel said.

“I think Northlands absolutely continues to exist,” Iveson said. “How its role could evolve over time, I think those are some of the things council will have to consider.”

Vision 2020 survey results

After releasing details of Vision 2020 last month, Northlands encouraged public feedback on the three-pronged plan. The survey closed on March 7 and Northlands released details of the survey Tuesday.

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The results showed 53 per cent of those who filled out the survey were very supportive of the Ice Coliseum project, which would see Rexall Place turned into a seven-sheet ice facility.

Forty-six per cent of respondents were very supportive of the Urban Festival Site, which would replace the racetrack and casino.

When it comes to the redevelopment of Hall D inside the Edmonton Expo Centre, 50 per cent of those who filled out the survey were very supportive of the plan.

Overall proposed vision for the Northlands site

On Monday, new conceptual designs of the site were provided by Northlands. Residential and commercial spaces are laid out in the new proposal.

There’s also the possibility for two new hotels – one near the Ice Coliseum that could serve those attending hockey tournaments, and another near the Edmonton Expo Centre that could serve the convention industry.

The City of Edmonton owns the land but would not develop it. Instead, portions of the site would be set aside for private development. The profit could then fund part of the redevelopment proposal.

READ MORE: Northlands site could one day be home to retail and residential space

Global News recently sat down the Northlands President and CEO Tim Reid to hear his thoughts on the future of the site. You can watch the interviews below:

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Gallery: Conceptual designs from Vision 2020 released Monday 

With files from Vinesh Pratap, Global News. 


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