EDMONTON – Even though the money is not all in place, Edmonton city council voted to approve a deal that would see a new downtown arena built for the Edmonton Oilers.
Councillors voted 10-3 in favour of the Master Agreement with Oilers owner Darryl Katz, Wednesday afternoon.
Councillors also voted- by a smaller margin- in favour of leveraging $45 million from the Municipal Sustainability Initiative (MSI) – a provincial fund that provides grant money for infrastructure – to make up for part of a $100 million shortfall in funding for the project.
However, the city said it will only borrow the money if the province confirms it will provide the remaining $55 million. All parties would have until Sept. 1 to finalize the funding arrangement or the deal could still fall apart.
The decisions were made after Edmonton city council heard an update on the downtown arena project and received the Master Agreement on the deal from city administration Wednesday.
During the public portion of the council meeting, councillors heard that city administration still expected the outstanding $100 million in arena funding to come from the province.
“The city still expects the province to step up in terms of its commitment to the arena,” said City Manager Simon Farbrother.
“We do believe over the next number of years they (the province) will have the ability to do that,” he added.
Councillor Don Iveson brought up a point that was displayed on a slide during the presentation which read, “Contribution from the Province needs to be resolved before any definitive agreements are signed.”
Iveson asked Farbrother for clarification on this issue.
“You’re recommending that we sign this deal without all the funding in place?”
Farbrother responded by saying the city either decides to hold off on the project until the province comes through with funding or proceed with the expectation that the province will come through.
Several councillors reiterated that in previous frameworks, the $100 million needed to be secured before a final agreement was signed.
Farbrother clarified that the direction of council to date has been to hold off on the final agreement subject to the $100 million being accounted for, but given the current situation, he says, that ‘subject to’ is making progress on the project difficult.
Farbrother said the city could use Municipal Sustainability Initiative (MSI) funding to supply nearly half of the unaccounted for $100 million.
It was suggested the City use $3 million of MSI funding and that it be leveraged over a 20 year borrowing period to raise a portion of the $100 million.
“We believe we’ve gone from a $100 million problem to a $55 million problem,” Farbrother added.
Many councillors were wary of signing off on an agreement without having the remaining funds accounted for.
“Now we’re being asked to consider another leap of faith for $55 million,” said Tony Caterina.
Iveson asked Farbrother if signing this agreement means the city is responsible for the remainder of the funding if the province doesn’t provide it. Farbrother replied “yes.”
“We’re asking you to make a call on this,” he explained.
Councillor Kim Krushell referenced some other ideas the city had discussed to come up with some of the remaining funds.
“We did discuss some other options,” she said, “that were not made public.”
“Yes,” said Farbrother, “this is your call.”
Mayor Stephen Mandel suggested a motion that would make the city’s contribution subject to the province “coming up with the balance of the money in some way or form.”
“There needs to be a contribution, we hope, by the provincial government. We believe there will be,” added Mandel.
Around 5:30 Wednesday evening, councillors voted on the following motion: “That the City of Edmonton use $3 million of MSI funding and that it be leveraged over a 20 year borrowing period to raise a portion of the $100 million and that final signing of the agreement is contingent upon receiving confirmation from the Province with respect to funds against which the City can apply for the balance of funds required.”
The motion was passed. Councillors Diotte, Henderson, Sloan, Iveson, and Caterina voted against the motion.
“I think that this motion makes a clear statement that we will not move forward until we have the balance of the money from the province,” said Mayor Mandel. “If we get any, it’s going to come in MSI.”
The motion to approve the Master Agreement, Location Agreement and Location Support Agreement was passed later Wednesday evening.
Three councillors voted against the motion accepting the Master Agreement; councillors Iveson, Sloan and Diotte all voted against the motion.
Before councillors questioned city administration on this agreement, John Karvellas, Vice President of the Katz Group, addressed the group.
“This remains a complex deal,” he said. However, he added that he’s confident that “with hard work and continued good will” the outstanding issues will be resolved and “we will be able to sign, seal and deliver” the arena plan by the end of April.
View the full Downtown Arena Master Agreement and Location Agreement Approval below:
Comments