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The Agreement

Edmonton City Council has entered into a series of agreements with the Edmonton Arena Corporation, owned by Daryl Katz who also owns the Edmonton Oilers, to design and build a new downtown arena.

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 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 $604.5-million. The entire project includes the arena, Winter Garden, community rink, LRT connection, pedestrian corridor and the land. The City will contribute $279-million to the project, none of which will be generated by increasing taxes.


Element Estimated
Cost
CRL Other City
Funding
EAC Lease
Funding
EAC
Cash
Ticket
Surcharge
Other
Gov't *
Totals
Rogers Place
(the arena)

$480

$120

$80

$112.81

$17.19

$125

$25

$480

Winter
Garden

$56.5

$25

 

$25

 $6.50



$56.5

Pedestrian Corridor

$15

$15

 

 




$15

LRT
Connection

$7

$7

 

 

 

$7

Community
Rink

$21

$7

 

 



$14

$21

Arena
Land

$25

$25

 

 

 

$25

Totals

$604.5

$199

$80

$137.81

$23.69

$125

$39

$604.50

(costs in millions)
* These sources will not result in an increase in taxes.

Funding

  • The maximum price of Rogers Place, including underground parking, is $480-million.
  • The Katz Group will pay the principal and interest costs for $112.81-million of their contribution as rent over 35 years. The remaining $17.9-million will be paid as cash.
  • The City of Edmonton contribution of $279-million to the arena building will include funding through a Community Revitalization Levy, new parking revenues, and redirecting the current Rexall Place subsidy. 
  • Members of the Capital Region Board representing 95% of the region's population supported Edmonton in applying for its allocation under the provincial Regional Collaboration Program. The City will submit the application as soon as the program's guidelines are defined.

Ticket Surcharge

  • The ticket surcharge will be levied by the City, with the rate set by the Edmonton Arena Corporation (EAC).
  • The amount collected must fund 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.
  • 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.
  • 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.

Arena Operations

  • EAC will operate Rogers Place and pay all operating and maintenance expenses, and will receive all operating revenues, including naming rights and parking revenue.
  • EAC will pay the City a maximum of $250,000 in municipal property taxes annually, for EAC arena operations that are only open during event hours, and will be responsible for paying all required Education Property Taxes.
  • 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.

Public Infrastructure

  • The City will build an LRT connection to the arena for a maximum $7-million.
  • The City will build a pedestrian corridor through the arena, linking the LRT to the Winter Garden, for a maximum $15-million.
  • The City’s contribution to the Winter Garden bridge over 104 Avenue is set at a maximum of $25-million. The Katz Group is paying $31.5-million. $25-million of their contribution will be paid as rent, and $6.5 million will be paid in cash.

Community Rink

  • The City will proceed with the construction of the community rink for a maximum of $21-million.
  • The City will own and operate the rink with all revenues and costs to the City.
  • The City will fund $7-million through the CRL, and apply for the remaining $14-million from the federal and provincial governments.
  • MacEwan University has agreed, in principle, to fund an additional $2-million to the community rink, on top of the original $21-million cost, for improvements needed to host their Griffins athletics program. 

Edmonton Oilers

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 $604.5-million budget for the arena project.
  • An on-budget Guaranteed Maximum Price (GMP) contract was reached in February 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.

Land

  • Council has bought the land for the arena project, which is included in the $604.5-million cost for the entire project. The cost of the land is estimated to be $25-million. Land not required for the arena will be sold.

Lease

  • The EAC has first right to negotiate up to three lease extenstions for 10 years, and has the first right of refusal on any subsequent lease or land/building sale.

Community Benefits

  • 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 has been established to identify and address community issues.
    • A senior member of the Oiler’s operations will be available to meet quarterly with the community advisory committee.
    • There will be provision for development/facilitation of training or employment for low-income/high-need Edmontonians.

For more information:

Online Contact 311 Online
Telephone

In Edmonton: 311

Outside Edmonton: 780-442-5311

TTY 780-944-5555
Email 311@edmonton.ca