Financial Model
City Council has approved the agreement framework, negotiated by the City and the Katz Group (owners of the Edmonton Oilers), to build a new arena in downtown Edmonton. The agreement sets the design and construction budget for the arena at $450 million and will not result in increased property taxes or a reallocation of civic infrastructure dollars.
Currently sources for $350 million of the total cost have been identified with the final $100 million yet to be confirmed. Here’s the funding breakdown:
1. $100 million from the Katz Group
The Katz Group will provide $100 million of financing specifically to an arena building. They will contribute another $100 million, subject to commercial viability, to spark development in an entertament area adjacent to the arena.
2. $125 million from a User-pay Facility Improvement Fee
$125 million would be raised through a seven per cent surcharge per ticket for every event held in a new arena. The fee will be administered by the Katz Group, who will remit $125 million to the City towards the cost of construction.
3. $125 million contribution from the City
The City will contribute $125 million towards this project, with $45 million raised through a community revitalization levy (CRL). This is a provincially-approved way for municipalities to dedicate some property tax revenue in a specific area to pay the costs for a new public facility or new infrastructure in that area.
$45 million from a CRL around the proposed arena would be dedicated to the design and construction of the arena.
A proposed downtown CRL area was brought to Council on August 31; the boundaries include a number of catalyst projects identified in the Capital City Downtown Plan and includes the arena project.
Once this investment has been repaid, the additional revenue realized as a result of the new development would be directed to the City’s general tax levy.
The $80 million balance of the City's contribution will be raised through parking revenue, tax revenue from the building and redirected subsidies.
4. Other Potential Revenue Sources
Now that Council has approved the agreement framework the City and the Katz Group can formally pursue funding requests of other orders of government.
For more information:
| Online | Contact 311 Online |
|---|
| Telephone | In Edmonton: 311 Outside Edmonton: 780-442-5311 |
|---|---|
| TTY | 780-944-5555 |
| 311@edmonton.ca |
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