Agreement for Edmonton arena passed by council

Edmonton city councillors voted 10-3 in favour of a revamped framework agreement betwen the city and Oilers owner Daryl Katz to build the new downtown arena.

Edmonton city councillors voted 10-3 in favour of a revamped framework agreement betwen the city and Oilers' owner Daryl Katz to finally build the new downtown arena.

"It's 100 per cent. A deal is done. Council's approved it," Mandel said at a news conference afterwards. "But I'm ...absolutely confident that we will go ahead and at some point in time all of us will go to a new arena with great pride."

"It's spectacular. It'll be the nicest, most dynamic arena you've ever been to. It'll be cool."

Katz did not attend the meeting but sent his reaction via news release after the agreement passed Wednesday afternoon.

"This is a milestone agreement for a world class facility that will drive the ongoing revitalization of downtown Edmonton," he said. 

"It also helps to ensure the Oilers' long-term sustainability in Edmonton ...this is a great day for Edmonton and we are excited to get to work on realizing this incredible opportunity."

Katz Group executive vice president John Karvellas said that he was proud of the mayor and council.

"This, I know, was a difficult decision for them to make too but I'm glad they finally made it and made it on a basis that we can live with and that the city of Edmonton can live with," he said.

The proposed arena itself would cost $480 million, with the Winter Garden set at $53 million. A pedestrian corridor, LRT connection, community rink and cost of purchasing the arena lands would add $68 million to the total cost of the project, which now sits at $601 million.

The deal calls for the city to put up $219 million, Edmonton Oilers owner Daryl Katz to put up $143 million with $114 million to come from other levels of government. A ticket surcharge would raise another $125 million.

While the outstanding $114 million hasn't been confirmed, Mandel said he believes that the city will get funding from the provincial and federal governments.

"Very confident," he replied. "If I didn't think we could do this, I wouldn't have spent the last six years doing it so."

Mandel said that Finance Minister Doug Horner has mentioned that the province is looking at creating a program that municipalities can use for major projects.

The province is being asked for $100 million for the arena and $7 million for the community rink attached to the project. The city has also requested $7 million from the federal government to put towards the rink's $21 million cost. 

Three councillors voted against the agreement — Don Iveson, Linda Sloan and Kerry Diotte.

"Everybody loves the Oilers. I do," Diotte said. "But this is a business deal and it's my duty to stand up for taxpayers. This is not a good deal for taxpayers."

Construction could start by August

The latest proposal increases the city's share a "quite manageable" $5 million more compared to the October 2011 framework, said city CFO Lorna Rosen.

Some councillors worried over the so-far uncommitted $114 million.

Coun. Tony Caterina asked administration if there was a backup plan if the province refused to help fund the arena.

City manager Simon Farbrother said that, like the LRT expansion, the city couldn't afford to wait for all the money to be in place before starting.

The proposal was put together after NHL commissioner Gary Bettman came to Edmonton on Friday to meet with city officials and The Katz Group.

City manager Simon Farbrother also presented council two cheaper options costing $577 million and $571 milliom, but emphasized that the more expensive plan better meets the goals of the arena project.

Construction on the arena could start as soon as this August with the arena opening sometime in 2016.

"Whether we're in the ground in August or a few months later, I don't think is all that material because we're not going to make it, it would appear, for the 2015-16 hockey season," Karvellas said.

'End of the line'

The original framework deal from October 2011 proposed a $450 million arena.

In that deal, The Katz Group pledged $100 million to the project with the city raising $250 million from the CRL and a user-pay facility fee. Another $100 million would come from the provincial or federal government.

But negotiations started to go off the rails late last summer when Katz negotiators started demanding additional concessions including a $6 million operating subsidy.

Councillors cut off talks in October after Katz refused to attend a council meeting to explain why he needed this additional cash.

Talks resumed again last month after Karvellas and other Katz Group officials appeared before council and dropped the subsidy demand.

Expectations soared over the weekend after word leaked out about the Bettman meeting.   

Karvellas said Katz made "significant concessions" over the past month to get the deal completed.  He said a feeling that talks had reached "the end of the line" was a factor.

"I think Daryl felt exactly the same way," Karvellas said.  "I made the comment to him that: 'We're not going to have any more chances. If we're going to make a deal with the city, we've got to bring it home.'"

Katz was on a plane to Toronto on Wednesday while things unfolded at city council, although Karvellas acknowledged that his boss likely wouldn't have attended anyway.

"I can't say he regrets not being able to be here because this isn't his kind of thing,"  he said.

Funding still a question

The province's contribution of at least $100 million to the project still hasn't been confirmed.

While the government insists that it won't provide direct funding, NDP Leader Brian Mason doesn't believe it.

"The provincial government has made commitments," Mason said. "It's clear to me that they've made commitments to the city of Edmonton and to Daryl Katz and we need to know what they are."

But Deputy Premier Thomas Lukaszuk brushed aside Mason's demands.

"Nothing has been promised to Daryl Katz from this building, from Alberta legislature, from our government," he said.

Wednesday's meeting was also notable for its star power.

Oilers CEO and president Patrick LaForge and a handful of players including Jordan Eberle, Ryan Smyth and Taylor Hall attended, leading Mandel to joke that the meeting was "punishment" for allowing six goals in the first period of last night's game.

With files from the Canadian Press