Edmonton city council passes new arena deal

Council has passed a deal that will see the city of Edmonton and Oilers owner Daryl Katz each put in more money to offset the $55 million shortfall needed to build the new downtown arena.

All but three city councillors voted in favour of the deal. Kerry Diotte, Tony Caterina and Linda Sloan voted against the agreement.

Katz will chip in an additional  $15 million through the Edmonton Arena Corporation and another $15 million will come from the Community Revitalization Levy [CRL].

The city hopes to get a $25 million grant from the province's Regional Collaboration Program. Last week, a majority of the Capital Region Board — which represents municipalities around Edmonton — agreed to support the city's application.

Katz, who joined a news conference held after the council meeting by phone, said the project was a "once in a generation opportunity."

"The result today is a landmark agreement that enables our city to move forward in an enormously positive way," Katz said.

Katz thanked Mandel — who he called a visionary — as well as city administration and city councillors for the "extraordinary time and effort" they put towards the project.

He also thanked members of the Capital Region Board for stepping up, as well as the residents of Edmonton.

"I can't tell you how exciting it is for me and everybody at Katz Group to think about having 20,000 people downtown night after night enjoying a game or going to a concert or some other event," he said.

"And the opportunity that creates for existing businesses downtown."

Mandel said that discussions had been underway with the Katz Group over the past couple of days.

"They were very responsive and I've got to say, tremendously cooperative," Mandel said. "No strings. Nothing. Just 'let's get on with this project.'"

Katz admitted that there was pressure to get a deal completed.

"Everybody was feeling pressure. This was not an easy deal."

Construction on the arena is expected to start in spring 2014.

Federal, provincial governments criticized

The funding plan was easier for some councillors to accept after Coun. Amarjeet Sohi made a motion to drop $45 million in  Municipal Sustainability Initiative [MSI] money and replace it with funding from the CRL.

"I think that taking the MSI money off the table, we’ve got ourselves back to the point where we’re not jeopardizing other projects," Coun. Ben Henderson said.

City administration confirmed that the new funding arrangement will not result in increased property taxes.

But councillors Tony Caterina, Linda Sloan and Kerry Diotte still expressed reservations about the plan. They felt there were still too many unanswered questions, like whether the provincial grant would come through.

"I think that going ahead with this would be extremely irresponsible today," Caterina told council.

Sloan worried about the amount of debt the city is taking on.

"I just can't swallow the burden of risk and the borrowing the city is posed to assume," Sloan said.

Coun. Don Iveson supported the motion saying that the city was not going to get a better deal at this stage in the process. Still, he expressed mixed emotions.

"That deal I was talking about two years ago had less city money in it than this version. So by that measure, our circumstances have gotten worse," he said.

"But this deal also has more Katz Group money in it than it did two years ago."

Wednesday’s meeting took place exactly one week after council deferred making a decision to proceed on the project until administration could find new sources of funding.

The province has refused to provide direct funds to the project and at least two councillors criticized the other levels of government for not helping out.

"Having an arena in a city is part of what is expected of a city," Henderson said.

"To have them wash their hands and stay out of it, I think, is — considering that a lot of the benefit in tax dollars will go them, I think is a little bit churlish on their part."

The province still has to approve the application for the $25 million Regional Collaboration Grant, though city manager Simon Farbrother said the province has been positive in discussions.

A CRL is a controversial practice based on the belief that a public project such as an arena would encourage new businesses to spring up around them.

The resulting increase in property taxes from those developments are then funnelled back into the area.

CBC journalists Gareth Hampshire (@cbcgareth), Marion Warnica (@warnicam) and Michelle Bellefontaine (@MBellefontaine) covered Wednesday's meeting.

You can see all their tweets compiled in this blog.