September 12, 2017 11:33 pm

Northlands CEO believes Edmonton will force organization to surrender lease on Coliseum

Northlands Coliseum in Edmonton.

Global News

The CEO of Northlands believes “the decision will be made for Northlands to surrender the lease on Northlands Coliseum effective Jan. 1, 2018 and surrender the lease for Northlands Park when the live racing concludes.”

Tim Reid made the statement on Tuesday in a letter to Northlands staff, shareholders and volunteers that was obtained by Global News.

His memo comes ahead of an expected debate at city council on what to do about outstanding loan payments owed to it by Northlands.

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“Pending the decision of council, it is anticipated that in 2018, Northlands will no longer have management responsibilities for our current site,” the letter reads. “As you can appreciate, the Northlands of the future will look and feel much different than it does today, however, I wish to be clear that an exciting future does exist.”

On Tuesday afternoon, council did not get through its scheduled agenda and it is expected the Northlands loan debate will now take place on Wednesday.

Late last month, city councillors approved a plan that will see the Edmonton Economic Development Corporation (EEDC) take control of the Expo Centre at Northlands once negotiations to finalize agreements are complete. That transfer of control is expected to take place on Jan. 1.

The Expo Centre has a $47-million loan attached to it. Northlands borrowed money to make major renovations to the Expo Centre in 2009. The centre loses $3 million per year and the loan payments are $4 million per year.

In September of last year, Northlands began negotiating the first of several deferrals on loan payments to the city. On Wednesday, council will debate whether to continue three payments that have already been deferred – $2,082,248.51, $2,081,220.95 and $2,080,167.35 respectively – and whether to defer them until Dec. 7, 2017. If approved, the new deferral would effectively see Edmonton forgive the loan to Northlands when it assumes responsibility for the Expo Centre.

If Northlands does not agree to a new deferral agreement, it would set the wheels in motion for the city to take the Expo Centre unilaterally and terminate the site lease if Northlands were to default on its loan payment.

It was not clear what prompted Reid to write he believes Northlands Coliseum and Northlands Park will be taken over by the city. A report recommending council push for a new loan deferral agreement with Northlands does not mention Northlands Coliseum or Northlands Park, only the Expo Centre.

READ MORE: City councillors vote to approve plan to ‘transition’ Expo Centre to the City of Edmonton

Watch below: On Aug. 29, 2017, city councillors voted to approve a plan to transition the Expo Centre to the City of Edmonton in a move to consolidate the Expo Centre and the Shaw Conference Centre.

“We were disappointed to receive the decision of council to transition the Edmonton Expo Centre to EEDC last week but we are confident that EEDC is fully capable of accepting this new responsibility,” Reid wrote. “Moving forward, we anticipate minimizing the loss of jobs for employees, however, it is important to be clear that some valuable members of our team will be negatively impacted by this change.

“We are confident that many employees will transition to the EEDC effective Jan. 1, 2018, and others responsible for the Coliseum and Site Management may find an opportunity with the City of Edmonton. When Northlands Park transitions with the opening of the new race track near the airport, we anticipate many individuals will find an opportunity to work with Century Casino’s operation.”

Reid wrote he believes post-January 2018, Northlands will employ between 35 and 45 employees as it shifts to a focus on food, events and education related to agriculture and enhancing K-Days, among other things.

On Tuesday, a reporter asked Coun. Bev Esslinger about reports Northlands was prepareing to shed 75 per cent of its staff.

“We haven’t got to any of those items yet,” Esslinger replied.

“You remember two weeks ago, we were able to resolve the conference centre piece of it and there were a few more pieces left to work with, and I’m confident that we essentially have resolution on all of them,” Mayor Don Iveson said after council met on Tuesday. “Council is nearly done our work in ensuring that Northlands as an organization will be successful into the future, driving tourism, event and agriculture economy outcomes for our city and region.

READ MORE: Iveson hints that Hockey Canada plan for Coliseum could move to Expo Centre

“I’m confident that by tomorrow, we’ll have final resolution of all of those questions around facilities and land and transition and how we’re going to work with Northlands to be successful in the future.”

“I remain as committed to finding a positive path forward for Northlands as I was on my very first day joining this team,” Reid wrote. “My commitment and the support of my family in finding a future for our great organization are steadfast.

“I am excited about our future, anxious to get started on our next chapter of Northlands.”

© 2017 Global News, a division of Corus Entertainment Inc.

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