Municipalities across the country receive significant benefit anytime they are able to identify and involve partners that are prepared to share financial responsibility for major infrastructure projects.
The 480M arena building is cost shared 50/50 between the Katz Group and the City of Edmonton. For our 50% capital contribution, we get the following:
· 35 years of an NHL Franchise in Edmonton guaranteed by the NHL
· The City of Edmonton as the owner of the land and building
· 35 years of no operating costs
· 35 years of no maintenance costs
· 35 years of no capital replacement costs i.e. Ice plant, HVAC system, roof etc.
· Development permits approaching over 4 Billion dollars, created by the Katz Group and partners which will create additional tax revenue sufficient to pay back our 50% capital investment on the arena building.
The City of Edmonton owns Rogers Place and the land that it sits on.The City has entered into a series of agreements with the Edmonton Arena Corporation (EAC), owned by Daryl Katz, who also owns the Edmonton Oilers, to design, build, and operate Rogers Place.
These agreements achieve the following 4 objectives, which were identified during public consultation:
1. Protection of the City’s interests
2. Does not increase current municipal property taxes
3. Sustains the NHL in Edmonton
4. Provides public infrastructure as a catalyst for downtown revitalization
Summary of Financial Framework Terms
The total cost of the project will be $613.7-million. The entire project includes the arena, Winter Garden, Downtown Community Arena, LRT connection, pedestrian corridor and the land. None of the sources of funding for Rogers Place or the associated infrastructure will result in an increase in municipal taxes.
Funding for Rogers Place
- Rogers Place is being built for $483.5 million, including underground parking.
- The Katz Group is paying $132.5-million. $112.8-million of their contribution will be paid to the City as rent over 35 years, and cover the City’s principal and interest costs. The remaining $19.7-million will be paid as cash.
- The City of Edmonton’s contribution of $226-million to the arena building includes funding through a Community Revitalization Levy, new parking revenues, and redirecting the current Rexall Place subsidy.
- $125-million will be collected through a ticket surcharge. Winter Garden
- The price of construction for the Winter Garden is $56.8-million
- The City’s contribution to the Winter Garden pedestrian pedway over 104 Avenue is $25.1 million.
- The Katz Group is paying $31.7-million. $25-million of their contribution will be paid to the City as rent over 35 years, and cover the City’s principal and interest costs. The remaining $6.7 million will be paid in cash.
- The City will build an LRT connection to the arena for a maximum $7-million, funded through the CRL.
- The City will build a pedestrian walkway through the arena, linking the LRT to the Winter Garden, for a maximum $15-million, funded through the CRL.
Downtown Community Arena
- The City will build the Downtown Community Arena for $24.9-million.
- The City owns and operates the rink, with all revenues and costs going to the City.
- The City will fund $14-million through the CRL. The Federal Government has funded $7-million through the Federal Gas Tax.
- The Federal Government is funding $7-million through the Federal Gas Tax.
- MacEwan University has agreed to fund an additional $3.5-million to the community rink for improvements needed to host their Griffins athletics program.
- The ticket surcharge will be levied by the City, pursuant to the Downtown Arena Ticket Surcharge Bylaw.
- The proceeds of this ticket surcharge goes to the City and must be sufficient to cover the principal and interest payments for repayment of $125-million over a 35-year term, plus a $1.5-million annual contribution to the City to create a fund for ongoing major capital expenditures. Any excess funds will be retained and used by EAC to operate and maintain Rogers Place.
- Capital contributions will be reviewed after 15 years.
- Ticket surcharge collected in excess of what is required to fund the $125-million in initial capital costs and the $1.5-million per annum for ongoing capital maintenance will be retained by the EAC.
- Each year, the City Manager will determine the amount of the ticket surcharge for Rogers Place, based on a proposal from EAC.
- A ticket surcharge will be levied on admissions at Rexall Place at the same rate as the ticket surcharge charged on non-hockey events at Rogers Place, to a maximum of 7%. The proceeds of this surcharge will go to the City.
- EAC will operate Rogers Place and pay all operating and maintenance expenses, and will receive all operating revenues, including naming rights and parking revenue.
- Through a Council-approved tax agreement, EAC and affiliates will pay the City a maximum of $250,000 in municipal property taxes annually, for EAC arena operations that are open during event hours, and will be responsible for paying all required provincial Education Property Taxes. This tax agreement excludes areas held by third parties, public parking, gambling and restaurants, bars, and other retail and commercial operations operated outside of event hours or open to the general public.
- The City will have access to the Arena and Winter Garden for up to 28 days a year, at EAC’s incremental cost. The City’s use will be for community purposes – not for commercial events.
Sustainability of NHL Hockey in Edmonton is a prime consideration.
- A location agreement signed as part of the deal keeps the Edmonton Oilers Hockey Club in Edmonton for 35 years.
- The City will enter into a marketing/branding partnership with the Edmonton Oilers to promote the City of Edmonton with the Oilers nationally and internationally at a cost of $2-million annually for 10 years.
Design and costing
- The cost of design work is included in the $613.7-million budget for the entire project.
- An on-budget Guaranteed Maximum Price (GMP) contract was effective in March 2014. A GMP is a cost-based contract where the contractor is paid a fixed fee subject to a ceiling price. The contractor is responsible for cost overruns.
- The City bought the land for the arena project, which is included in the $613.7-million cost for the entire project. The cost of the land was $26.5-million.
- The EAC has first right to negotiate up to three lease extensions for 10 years, and has the first right of refusal on any subsequent lease or land/building sale.
- The Community Benefits will be included within a schedule as part of the Master Agreement, acknowledging the activities of the Oilers Community Foundation.
- A Community Advisory Committee meets on a quarterly basis to identify and address community issues.
- A senior member of the Oiler’s operations serves on the Community Advisory Committee.
- There will be provision for development/facilitation of training or employment for low-income/high-need Edmontonians.
Information on the construction, including regular updates on what activity will be on site and traffic disruptions, is available in The Build section.
Learn about Bryan's involvement leading up to the downtown arena project from the links below.