Edmonton city council and the Katz Group have negotiated an agreement that ensures the construction of a proposed $480 million downtown arena.
“This is a milestone agreement for a world class facility that will drive the ongoing revitalization of downtown Edmonton,” said Daryl Katz, chair of the Katz Group, in a press release. “It also helps to ensure the Oilers’ long-term sustainability in Edmonton. This has been a challenging process for all concerned but we are confident we will all look back on the end result with pride and satisfaction at what we have achieved.”
Edmonton council approved a new framework for the arena on Jan. 23, which is based on elements that were approved in October 2011.
However, the new deal includes some important changes.
To begin with, the maximum cost for the downtown arena building is $480 million, which is $30 million more than the original budget of $450 million. The increase in cost will be split 50/50 between the City and the Katz Group.
A ticket surcharge will be levied by the city, but the rate will be determined by Edmonton Arena Corporation (EAC).
The surcharge will fund principal and interest payments for the repayment of the $125 million of initial capital over a 35-year term.
It will also cover a $1.5 million annual contribution to on-going major capital rehabilitation and replacement.
The Katz Group will pay the principal and interest costs associated with $115 million of capital cost over 35 years through a lease payment.
The city will contribute $140 million to fund the initial capital cost of the arena building.
The Edmonton Arena project involves the construction of a multi-purpose sports and entertainment facility including: a professional hockey arena; associated food, beverage, retail and entertainment areas; ice plant facilities; and parking garage and loading areas.
A pedestrian bridge structure will be built to span 104th Avenue to lands south of the Arena Lands, as well as a community rink and light rail transit connection.
The cost of building an LRT connection to the arena, which is being funded by the city, has been reduced from $17 million to $7 million. The city will proceed with the construction of the community rink for a maximum cost of $21 million.
The total cost of the project will be $601 million, an increase of $23 million over previous projections.
City administration presented council with three design options, but the municipal contribution would be similar for all three.
PCL Construction Management has been selected by the City of Edmonton and the Katz Group to manage construction of the proposed downtown arena.
Icon Venue Group has been named the project manager.
360 Architecture is the architect and the consulting engineers are Thornton-Tomasetti Engineers (structural) and M E Engineers Inc. (mechanical and electrical).
Construction for the new arena is expected to start in late summer to early fall, with completion in 2016.