City should sign new 10-year lease deal with Citadel Theatre, executive committee says
Millions in maintenance and renovation costs would become city responsibility
UPDATE: On May 15, Edmonton city council approved the 10-year lease agreement, where the city would take on annual maintenance costs and major renovation costs over the next decade.
The City of Edmonton and the Citadel Theatre are closing in on a new lease deal that would see the city take on costs for maintenance and major renovations, with an assist from the Citadel.
The Citadel Theatre's current leases with the city expire on Sept. 30.
Under a proposed new 10-year, $1-per-year lease agreement, the city would take on $1.3 million in annual maintenance costs, along with major renovation costs estimated at $56.2 million over the next decade.
City council's executive committee voted Friday to recommend council approve the deal and direct administration to find the funding to support it.
"I think it does strike a good balance between the needs of both parties and really supports and plays to the strengths of each party while delivering value for Edmontonians," said Ward Métis Coun. Ashley Salvador.
The Citadel signed its original land lease with the city in 1974 for the construction of the theatre complex, which opened two years later. A second lease followed in 1981 for land to expand the facility and add an indoor park and pedway connection to the LRT.
A signature building in Edmonton's arts district, the Citadel saw more than 110,000 people attend productions in 2023-24, according to the city report.
Alan Nursall, the theatre's interim executive director, said having the city take ownership of the building was part of the original lease agreement.
"For a year and a half now, city and city staff and Citadel staff have been talking about what is the best way to manage that transition and is it the right transition to make," Nursall told CBC's Edmonton AM this week.
The Citadel has agreed to contribute a minimum of $100,000 per year toward the facility's maintenance and renewal work.
It would raise that money by charging an extra $2 per ticket. The Citadel would also be responsible for janitorial, insurance, security, utilities and property tax costs.
The new lease would allow the Citadel to sublease parts of the building to businesses, that includes a restaurant and a dental office.
"That helps us offset some of the operating costs," Nursall said.
He said, except for the dentist's office, the other businesses would add to the experience of visiting the Citadel and being downtown.
The administration report says the city has a capital renewal investment gap of $4.8 billion, and that taking on additional costs related to the Citadel would increase that gap.
If renewal work for the theatre building is deemed higher priority, work on other city facilities could be deferred.
Without a new lease deal, the entire property would be returned to the city after Sept. 30. That would mean the city would be responsible for all costs. Alternatively, the lease could go into "overhold" after Sept. 30, with each party having the ability to terminate the agreement on short notice.
"So it is coming into our asset portfolio whether we want that or not," said Ward O-day'min Coun. Anne Stevenson.
"By having this lease in place, we do get more of a partnership opportunity with Citadel, with their commitment to the capital contribution to the building and some of the maintenance day-to-day."
The report also mentions another scenario if Sept. 30 arrives without a new lease deal: the lease could go into "overhold," with each party having the ability to terminate the agreement on short notice.
Since the COVID-19 pandemic, the Citadel Theatre has been on a rebound, Nursall said. "We're really, really pleased how this season has gone," he said, adding that it has exceeded revenue projections of the year.
Nursall said the Citadel would like the city to take on the "operating stress" to help it focus more on theatre productions.
"We will do what we're good at, and instead of worrying about the building, we'll invest our energies in producing great cultural content and live theatre."
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With files from Madeleine Cummings