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Gondola developer would pay Edmonton $1.1 million annually for city land

Click to play video: 'Prairie Sky Gondola agrees to lease City of Edmonton land for $1.1M annually' Prairie Sky Gondola agrees to lease City of Edmonton land for $1.1M annually
The City of Edmonton has reached a land agreement with Prairie Sky Gondola for its proposed river valley crossing. Breanna Karstens-Smith breaks down the numbers. – Jul 29, 2022

City of Edmonton administration is recommending moving forward with a land agreement for the Prairie Sky Gondola project.

In a report going before councillors on Aug. 10, city administrators lays out the costs the developer would have to pay to lease public land.

The 2.5-kilometre line would run from Old Strathcona on the south side, across the river and to the edge of the downtown core.

There would be five stations with towers built on 19 plots of city land, primarily in the North Saskatchewan River valley.

In exchange for building on those lands, Prairie Sky would have to pay $350,301 per year in rent, with that increasing every five years.

The license fee would be $774,633.91 annually with the lease lasting 30 years. That could be extended for an additional 30 years twice, for a total 90 year agreement.

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“It was important for us to pay our full measure of municipal taxes,” Prairie Sky Gondola’s chief strategy officer Bob Black told Global News.

“For Edmontonians to be able to look at the deal that has been struck here and recognize that there are no subsidies — direct or indirect.”

Read more: The ‘day has come’ for Alberta to embrace urban gondola projects: Developer

The prices were determined by city assessors and based off market rent.

“What gives me assurances is that this is not costing the city anything. This is a private enterprise,” Ward O-Day’min Coun. Anne Stevenson said in response to the numbers.

Her colleague Coun. Michael Janz disagrees, saying if the project were needed, the city would create it as part of public transit.

“The river valley is the soul of Edmonton and I think it’s a sin to sell your soul. But to sell your soul for such a paltry amount is ridiculous,” Janz said.

About half of the project would go through Janz’s ward — something he said he heard a lot of criticism about during the election campaign.

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“I have many people who enjoy these views and enjoy the city of Edmonton and don’t want to see skyclutter,” he added.

Even if councillors approve the agreement, the public will still get a say.

Read more: Edmonton council approves 1st step for gondola across North Saskatchewan River

The next steps would also see Prairie Sky apply for rezoning and do both archeological and environmental assessments.

“It’s a very important step but there’s certainly still a lot of work left to do,” Black said, assuring the public this is not a done deal.

If the project falls through at any point after shovels break ground, Prairie Sky Gondola would be on the hook.

Click to play video: 'Gondola moves another step  forward with Edmonton city council approval' Gondola moves another step forward with Edmonton city council approval
Gondola moves another step forward with Edmonton city council approval – Feb 22, 2021

The city would have access to funds to completely change or take down any and all work that had been done and the developer would have to pay to remediate the river valley.

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“That is a very, very rare instrument. In fact, we’ve had to do a fair amount of work around being able to secure an underwriter for that,” explained Black, who also worked on the Rogers Place project.

Black believes construction could begin within 18 months of all the necessary approvals, adding that the work would likely take about two years.

Prairie Sky estimates it to cost between $132 million and $155 million. Operating costs would be between $12 to $13 million per year with everything paid for by the private sector.

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