ROUTING - City Council | DELEGATION – S. Farbrother, G. Klassen, L. Rosen, J. Karvellas WRITTEN BY – G. Klassen, L. Rosen | January 23, 2013 – Sustainable Development 2013SGM002 Page 1 of 6
Update on the Downtown Arena
Recommendation:
1. That Council approve the advancement of Option A as the basis for design of a downtown arena in accordance with the agreement with the Katz Group. 2. That Council approve the revised negotiated framework for the design and construction of the Option A arena as per Attachment 2 to the January 23, 2013 Sustainable Development report 2013SGM002. 3. That Administration enter into a Master Agreement, a Tax Agreement under s. 333.1 of the Municipal Government Act, and all other agreements necessary to finalize the design and construction of the Downtown Arena and associated infrastructure and that the agreements be in a form acceptable to the City Manager.
Report Summary This report responds to Council’s direction to explore options to achieve the long term goal of sustaining NHL Hockey in Edmonton and provides an update on Arena negotiations. Previous Council/Committee Action
At the October 17, 2012 City Council meeting the following motion was passed: That Administration provides a report outlining a framework for Council to explore potential avenues to achieve the long term goals of sustainable NHL Hockey in Edmonton. At the December 12, 2012, City Council meeting the following motion was passed: 1. That Administration re-opens negotiation with the Katz Group based on the October 26, 2011, Framework. 2. That Administration negotiates an extension in the deadline in the Land Inventory Agreement from December 31, 2012 to April 30, 2013. 3. That Administration work with the Katz Group to identify and appoint an individual who could act as a Mediator by January 23, 2013. 4. That the Mediator appoints a financial analyst to evaluate the City’s and the Katz Group’s financial assumptions and analysis for the arena revenue and expenses. 5. That Administration work with the Katz Group, under the support of the Mediator, to evaluate all other non-financial issues.
Report Background
In 2007 a report commissioned by Northlands found it would cost $250 million to renovate Edmonton’s NHL arena, Rexall Place, to meet present day arena standards for the NHL. In the same year a committee of community leaders, appointed by the Mayor, recommended in the “
City Shaping”
report that Edmonton needed a new arena. The report also stated “the greatest opportunity for Edmonton lies in developing a new facility that will revitalize our downtown and add to the excitement that is just starting to build in our core.” Committee members also recognized public support would be required to be successful.
Update on the Downtown Arena
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The Capital City Downtown Plan, approved by Council in 2010, confirmed the importance and catalyst nature of an arena and entertainment district in the downtown. In October 2011, the Mayor met with NHL Commissioner Gary Bettman and Edmonton Oilers’ owner Daryl Katz and developed a framework to advance the arena project. Subsequently, at the October 26, 2011 regular Council meeting, Council approved a 17-point framework, based on the New York meeting, to design and build a downtown arena. As well, Council passed a motion that directed Administration to enter into an Interim Design Agreement with the Katz Group for the design of a first class, multi-purpose facility that meets or exceeds the standards of design, construction and capabilities of recently constructed NHL facilities. The approved 2011 framework outlined a funding model that included: Arena:
$125M City contribution
$125M ticket tax
$100M Katz Group contribution
$100M provincial contribution Related Infrastructure – City Contribution:
$25M maximum for the Winter Garden
$25M land purchase
$15M for pedestrian corridor
$17M LRT connection
$ 7M City community rink (contingent on matching contributions from other orders of government). The Katz Group established the Edmonton Arena Corporation (EAC) and it was engaged by the City as the agent to advance the design. In the spring of 2012 public consultations on the designs were received positively. In an update to Council on October 17, 2012, Administration identified items that had arisen during negotiations that were outside the scope of the 2011 framework. At that time Council directed Administration to suspend negotiations with the Katz Group and explore options to sustain NHL hockey in Edmonton. In December, 2012 Council directed Administration to reopen negotiations with the Katz Group.
Design Options
Further to Council’s direction in October 2012 to explore potential avenues to achieve the long term goals of sustainable NHL Hockey in Edmonton, City Administration had two additional design options developed. Additional value engineering was also undertaken for the original design option. Administration was guided by the following principles in exploring options for a downtown arena: 1. Edmonton seeks to have an arena that meets NHL standards and provides a first class multi-purpose facility for concerts and events. 2. NHL hockey is sustainable in Edmonton. 3. The City’s financial position is not compromised by the cost of the arena project. 4. Design must optimize arena revenues for NHL and other events.
Update on the Downtown Arena
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5. Leverage municipal, provincial, owner and user contributions. 6. Maximize catalyst opportunities for the downtown revitalization. The following three options are the result of the design work undertaken.
Option A
Design Elements This option is essentially similar to the design developed collaboratively with the EAC and was shown to Council and the public last spring. The following program elements have been retained:
Multi-purpose arena
Underground parkade
Enclosed elevated pedestrian link over 104 Avenue (Wintergarden)
Internal pedestrian corridor (Pedway)
LRT lobby
Community rink
Private sector development on the north side of 104 Avenue. Design changes include: a redesign of the Wintergarden to more closely align with the original $50M (2011 Framework). The iconic stainless steel cladding for the Arena has been largely retained, but is executed in a more cost-effective manner. The interface between the arena and Wintergarden was redesigned for cost savings. The Master Plan prioritizes the street level pedestrian option by placing over 80% of all commercial programs within the master plan at grade. The Wintergarden effectively provides an all weather staging area for the Arena as well as a link over 104 Avenue to a plaza and business area. Option A comments:
Wintergarden design provides an all weather staging area and supports the immediate commercial and business opportunities on developed lands to the south.
Design closely aligns to the option shown and publicly supported in Spring 2012.
Wintergarden costs more closely align with the $50M budget set out in the 2011 Framework.
Construction would start in August 2013 through a phased Guaranteed Maximum Price (GMP). Significant design changes have resulted in a delay in providing a 100 per cent GMP. This will be available once all trade packages have been received by the end of 2013.
It meets current NHL and entertainment venue standards.
There is a guaranteed tenant.
Option B
Design Elements This option contains the following program elements:
Multi-purpose arena
Above-grade parkade
Open, elevated pedestrian link over 104 Avenue
Internal pedestrian corridor (pedway)
LRT lobby
Community rink
Small private sector commercial development at street level on the north side of 104 Avenue. This option includes an above-ground parkade with access from 102 Street. The Winter Garden has been replaced with an open, elevated pedestrian link. Option B comments: