Edmonton city council approves arena framework with Katz Group
EDMONTON – In a vote of 10-3, Edmonton city council voted in support of a downtown arena deal with the Katz Group.
Wednesday afternoon, city council approved a new framework for a $480 million arena to be owned by the City of Edmonton, and operated by the Katz Group, owner of the Edmonton Oilers.
“I am pleased that we have been able to reach an understanding that is both competitive and reasonable, and will sustain NHL hockey in Edmonton long-term,” said Mayor Stephen Mandel following the council vote.
“Edmonton is one of the best hockey markets in the NHL. A new downtown arena built under this framework is a first-rate commitment by the City to our downtown and to the game and to the team we love.”
The framework is very similar to the elements Council approved Oct. 2011, but includes the following changes:
– The additional $30 million for the arena over the previous framework will be split between the City and the Katz Group.
– The LRT connection, solely funded by the City, has been reduced from $17 million to $7 million.
– Katz Group will pay for the slightly increased costs of the Winter garden.
– The balance of the elements – pedestrian corridor, arena land, and community rink – are projected to remain at the same cost as previously estimated.
– The total cost of the project will be $601 million, an increase of $23 million over previous projections.
– Under the new framework, the City will own the arena and land, and the Katz Group will pay all operating costs and receive all revenues.
City administration also presented Council with 2 alternative designs: one with a pedestrian link over 104 Avenue instead of the Winter garden, and the second with no pedestrian link or Winter garden. Neither of these options included a private sector partner or confirmed tenant.
The city’s financial analysis showed that the municipal contribution would be similar for all options.
“The option recommended guarantees an NHL tenant, shares costs with a private company, and keeps the Oilers in Edmonton for the long term,” explained City Manager Simon Farbrother.
Wednesday morning, council heard an update on negotiations between the City Administration and the Katz Group. Each councillor was given the opportunity to question both parties about the proposed framework.
After breaking for lunch, each councillor spoke to the proposed deal prior to a vote .
Councillors Linda Sloan, Kerry Diotte and Don Iveson did not support the deal.
Councillors Kim Krushell, Ben Henderson, Karen Leibovici, Bryan Anderson, Tony Caterina, Amarjeet Sohi, Ed Gibbons, Jane Batty, Dave Loken, and Mayor Stephen Mandel voted in support of the deal.
During her address, Councillor Sloan said “I believe the city is taking on an unfair and irresponsible burden.”
“Major outstanding questions need to be answered before a decision is made,” she added.
Councillor Krushell said “I will be supporting the motion in front of us.”
“We get the opportunity of significant redevelopment that I believe we will see in our downtown,” she explained.
Krushell pointed out that when neither party involved in a negotiation is completely satisfied, that usually means a good deal has been reached.
“I think we’ve done our duty protecting taxpayers of Edmonton,” she said.
Not all councillors agreed.
“We’re being asked – in very short order – to approve a $600 million deal,” said Councillor Diotte. “This idea we’re being presented with is not a win win.”
“We have no true financial of the Edmonton Oilers or the Katz Group,” he added. “We don’t have provincial funding after two years of begging for it.”
While he added that he thinks a downtown arena is a great idea, he said this particular deal is not, and wouldn’t be supporting it.
Councillor Henderson said “there are risks… but I think the risks are pretty minimal.”
Councillor Iveson spoke to the deal next.
“I know the politically astute thing for me is to vote for this deal,” he said. He explained he sees the framework as an indirect subsidy to the Edmonton Oilers.
“I had hoped that hitting the reset button would have resulted in” a different financial framework. He explained his vote will be on a “gut feel.”
However, Councillor Leibovici said “I believe we’re at a point of making it happen.”
Councillor Anderson said “Certainly, I support it.”
“This is Edmonton, I think we do a hell of a job at doing big things,” he added. “I am looking forward to that happening in a big way soon.”
Councillor Caterina’s support was slightly more guarded.
“I don’t think going forward today will put us in any deeper of a knot,” he explained.
He addressed the Katz Group and expressed his hope that council wouldn’t have to explore any more “asks” in the future, and asked the Katz Group to come up with a “Plan B and C” that don’t require funding from the provincial government.
Before saying he’d support the deal, Councillor Sohi said “You can’t expect a perfect deal… It’s a reasonable deal in my mind.”
Councillor Gibbons spoke about downtown revitalization, saying “in the last couple of years… downtown is coming alive.”
On the arena deal, he said “I will be supporting it… I hope citizens of Edmonton will accept and move forward.”
Councillors Batty and Loken thanked all parties for their patience during this process before voting to approve the framework.
In his closing remarks before the vote, Mayor Stephen Mandel said “I’m incredibly proud of this council… this will pass, thank goodness.”
A master agreement will still have to be signed in the future.
In a written statement, Daryl Katz praised the outcome of the vote.
“This is a milestone agreement for a world class facility that will drive the ongoing revitalization of downtown Edmonton,” he said.
“It also helps to ensure the Oilers’ long-term sustainability in Edmonton. This has been a challenging process for all concerned but we are confident we will all look back on the end result with pride and satisfaction at what we have achieved. I want to thank City Council and City Administration for their work on this file. This is a great day for Edmonton and we are excited to get to work on realizing this incredible opportunity.”
City council chambers were full Wednesday morning. Rexall Sports President and COO Patrick LaForge sat in the centre of the room, along with Edmonton Oilers players Taylor Hall, Jordan Eberle and Shawn Horcoff.
(Courtesy: Geoff Stickle, Global News)
City council took a break for lunch at 12 noon Wednesday. When asked about the province’s role in helping come up with (in an indirect way) the estimated $110 million still needed for the proposed arena deal, councillor Tony Caterina told Global News “your guess is as good as mine.”
However, he added, “I don’t think this is going to change anything we’ve already agreed to.”
Oilers Shawn Horcoff and Jordan Eberle also spoke to media following the morning’s discussion.
“We feel it’s an important part of our future as players,” said Horcoff.
“It’s exciting for the city of Edmonton, for the players, the fans,” added Eberle.
The framework was hammered out Friday at a private meeting attended by Oilers owner Daryl Katz, Mayor Stephen Mandel, city manager Simon Farbrother and NHL commissioner Gary Bettman.
The Katz Group and the city originally reached a tentative agreement on an arena project in October of 2011, only to have negotiations break down over the last year.
The Oilers’ lease at Rexall Place expires in 2014.
Watch a live stream of the city council meeting here. It begins Wednesday at 9:30 am.
Read the updated January 23, 2013 documents on arena proposal here:
Report to council on Arena Negotiations January 23, 2013: