Editor’s Note: This story originally stated Northlands’ debt was $48 million. It has been corrected to state the debt is $47 million.
City council is considering allowing Northlands until March 2018 to make the next payments on the $48-million loan it owes the City of Edmonton by making changes to a bylaw.
The first reading was passed Tuesday to amend Bylaw 15075, which would allow deferral of up to four loan payments.
A city bylaw amendment suggests: “The loan repayment schedule will be recalculated in such a manner that the indebtedness will be repaid over the remaining life of the 25-year debenture.”
Northlands borrowed money to make major renovations to its Expo Centre in 2009. Today, the centre loses $3 million per year. The loan payments are $4 million per year and there’s still $47 million to pay off.
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The organization was supposed to make payments of about $2 million twice a year, on March 15 and Sept. 15.
In March 2016, Northlands asked the city to forgive the $47-million loan.
Last year, the City agreed to allow Northlands to defer on its loan payment. Now, additional deferrals are on the table – until March 2018. Mayor Don Iveson said it shouldn’t cause alarm.
“We just needed a bylaw to make formal what we already intended to do, which was the deferral of the debt while we did some of the continuing work with Northlands,” Iveson said Tuesday.
“So this is par for the course. Everything’s on track.”
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Northlands was able to make payments while the Edmonton Oilers were playing at Rexall Place. However, with the Oilers and the majority of the concert industry moving to Rogers Place, Northlands has estimated its earnings will go from $9.3 million to $600,000 in 2017.
“We’re deferring on payments, but we want to make a payment,” Lori Cote, with Northlands, said. “We want to be a good corporate citizen in the city and we want to make those payments, so we’re working on a schedule to do so.”
Last year, Northlands pitched the concept of Vision 2020, which would include a six-sheet ice facility for the arena.
READ MORE: Dozens speak at public hearing for Northlands’ Vision 2020 at city hall
The city reviewed the proposal and said Northlands’ plan to overhaul the arena, Expo Centre and horse racing track overestimated the amount of revenue the changes would bring in, and underestimated the cost of the massive overhaul.
Additionally, city staff said there’s not enough demand for an additional six rinks throughout the year. In the winter, there would be demand, but not in the summer.
The City is studying Vision 2020 and other options, including better integration with the Shaw Conference Centre.
“We want to create more tourism and hospitality jobs by bringing more events in by leveraging the calendar between these two facilities in a complimentary way rather than in a head-to-head way,” Iveson said.
The bylaw amendment has received support from city administration but can’t be passed before Feb. 21.
With files from Vinesh Pratap, Global News.