downtown arena update jan. 2013 #2
TRANSCRIPT
-
7/29/2019 Downtown arena update Jan. 2013 #2
1/33
Repl ace w it h appropr iat e im age in View > Mast er.
1
Dow nt ow n Arena Updat e
January 23, 2013
-
7/29/2019 Downtown arena update Jan. 2013 #2
2/33
2
Agenda
PreviousCouncilDirection(October17th &
December12th,2012)
DesignOptions
KatzGroupStatement
Status
of
Negotiations NextSteps
-
7/29/2019 Downtown arena update Jan. 2013 #2
3/33
3
Previous Counci l Di rect ion
October17,2012
SuspendnegotiationswithKatzGroupondowntownarena
LookatframeworkforpotentialavenuestosustainNHLhockeyinEdmonton(October2012)
Councildid
not
rescind
support
for
October
2011
Framework
December12,2012
ReopennegotiationswithKatzGroup
Extendlandinventoryagreement
Securemediator
&
financial
analyst
EvaluateothernonfinancialissueswithKatzGroup
-
7/29/2019 Downtown arena update Jan. 2013 #2
4/33
4
Design Opt ions
Exploredthreeoptions:
OptionA valueengineeredoriginaldesign
includingWintergarden and
underground
parkade
OptionB reviseddesigntoincludeopenair
pedestrianlinkageover104th Avenueandabove
gradeparkade
OptionC reviseddesigntoremove
Wintergarden andincludeabovegradeparkade
-
7/29/2019 Downtown arena update Jan. 2013 #2
5/33
5
Opt ion A -View Looking West 104 t h Avenue
-
7/29/2019 Downtown arena update Jan. 2013 #2
6/33
6
Opt ion A - View Looking East 104 t h Avenue
-
7/29/2019 Downtown arena update Jan. 2013 #2
7/33
7
Opt ion A - Plaza at Grade
-
7/29/2019 Downtown arena update Jan. 2013 #2
8/33
8
Opt ion A
18,559(manifested
seats)
Similarindesign&programtooriginaldesignincluding:
Wintergarden
350stallundergroundparkade
Stainlesssteel
cladding
executed
morecosteffectively
$480Marena
$601Mtotalproject(includes
arenaand
public
infrastructure)
$219MCitycontribution
$143MKatzGroupcontribution
Providesguaranteedtenant
$480M
(includesunderground
parkade)
WinterGarden$53M
PedestrianLink $15M
LRT Connection
$7MCommunity Rink$21 M
-
7/29/2019 Downtown arena update Jan. 2013 #2
9/33
9
Opt ion B -View Looking East 104t h Avenue
-
7/29/2019 Downtown arena update Jan. 2013 #2
10/33
10
Opt ion B Plaza at Grade
-
7/29/2019 Downtown arena update Jan. 2013 #2
11/33
11
Opt ion B -View Looking West 104 t h Avenue
-
7/29/2019 Downtown arena update Jan. 2013 #2
12/33
12
Opt ion B
18,559seats
Similarindesign&programtooriginaldesign,differencesare:
WinterGardenreplacedwithpedestrianlinkover104th Ave.
340stallabovegradeparkade
Seatingbowlrevised,removalofsomepremiumspaces
Additionalopportunitiesforintegrationof104Avenueintroduced
Newatgradeentryplazaadded
$493M
arena
$576.8Mtotalproject(includesarenaandpublicinfrastructure)
$214.9MCitycontribution
Tenanttobedetermined
$493M (includes parkadeshown in green)
CommunityRink $21M
Pedway over104th Avenue $15.8M
LRT Connection$7M
Pedestrian LinkPedestrian Link
$15M$15M
-
7/29/2019 Downtown arena update Jan. 2013 #2
13/33
13
Opt ion C - View Looking West 104 t h Avenue
-
7/29/2019 Downtown arena update Jan. 2013 #2
14/33
14
Opt ion C -View Looki ng East 104t h Avenue
-
7/29/2019 Downtown arena update Jan. 2013 #2
15/33
15
Opt ion C Plaza at Grade
-
7/29/2019 Downtown arena update Jan. 2013 #2
16/33
16
Opt ion C 18,559
seats
Similarindesign&programtooriginaldesign,differencesare:
WinterGardendeleted
300stallabovegradeparkade&44stallsbelowgradeforteamuse
Seatingbowl
revised,
removal
of
somepremiumspaces
Additionalopportunitiesforintegrationof104Avenueintroduced
Newatgradeentryplazaadded
$511.75marena
$571.25Mtotal
project
(includes
arenaandpublicinfrastructure)
$217.25MCitycontribution
Tenanttobedetermined
$511.75M (includesarena & parkade shown in
Green)
LRT Connection$2.75M
Community
Rink
$31.75M
-
7/29/2019 Downtown arena update Jan. 2013 #2
17/33
17
Financial analysis of t hree opt ions
$217.25M$571.25MOptionC
$214.9M$576.8MOptionB
$219M$601MOptionA
MunicipalContribution
TotalProjectCost
Option
-
7/29/2019 Downtown arena update Jan. 2013 #2
18/33
18
Finance Opt ions
Proposedfundingmodelfrom2011Framework&modifiedinaccordancewithaproposedagreement
OptionB&CnoprivatecapitalinvestmentbutCity
wouldexpecttoearnrentsimilartoinvestmentinOptionA. Tenantwouldneedtobedetermined.
Citydoesnotrecommendcondominiumization of
seatsmodelasitborrowsfromfuturerevenues
-
7/29/2019 Downtown arena update Jan. 2013 #2
19/33
19
Design Opt ion Sum m ary
Administrationlooked
at
3options
and
while
Options
B
&
C
arelessexpensivebothrequireadditionaldesignwork,timeandriskrelativetotenancy
Administration
is
recommending
the
updated
Framework
withOptionAasthebasisfordesignasit: MeetsgoalofsustainingNHLhockeyinEdmonton
Guaranteeslongtermtenancy
Reasonablefinancialarrangementformunicipality
RealizesCitysvisionofarena&entertainmentdistrictoutlinedinTheWayWeGrow&contributestoongoingrevitalizationofdowntown
IconicstructureinsupportofCapitalCityDowntownPlan
-
7/29/2019 Downtown arena update Jan. 2013 #2
20/33
20
Kat z Group St at em ent
-
7/29/2019 Downtown arena update Jan. 2013 #2
21/33
21
Recom m ended Negot iat ed Fram ew ork
Interviewedanumberofpotentialmediators
Concurrentlyresumednegotiationswiththe
KatzGroup
Asaresultofaseriesofmeetings,
AdministrationisrecommendingtheCity
enterinto
an
agreement
based
on
the
followingnegotiatedframework
-
7/29/2019 Downtown arena update Jan. 2013 #2
22/33
22
Nochange.SustainabilityofNHLHockeyinEdmontonis
aprimeconsideration.
TheCommitmentisincreasedby$15millionto
coverhalftheprojectedincreaseinthecostofthe
arenabuilding
total
commitment
to
be
paid
as
rentover35years(includinginterest).
TheKatzGroupwillpaytheprincipaland
interestcostsassociatedwith$100millionof
capitalcost
over
35
years.
Upset(maximum)priceis$480millionwiththe$30millionincreasetobesplit50/50betweentheCity
andtheKatzGroup.
TheArenaBuildingProject(whichincludes350parkingstalls)hasamaximumpriceof
$450million.
RecommendedNegotiatedFrameworkOctober2011ApprovedFramework
Recom m ended Negot iat ed Fram ew ork
-
7/29/2019 Downtown arena update Jan. 2013 #2
23/33
23
TicketsurchargetobeleviedbytheCitywiththe
ratetobedeterminedbyEdmontonArenaCorp
(EAC).The
rate
to
be
at
least
sufficient
to
fund
principalandinterestpaymentsforthe
repaymentofthe$125millionofinitialcapital
overa35yeartermanda$1.5millionannual
contributiontoongoingmajorcapital
maintenance.
Fundsgenerated
by
the
surcharge
inexcessofthisamountwillberetainedbyEAC.
Aticketsurchargewillbeleviedonadmissionsat
Rexall Placeandshallbeatthesamerateasthe
ticketsurchargetobechargedonnonhockey
eventsattheDowntownArena,toamaximum
of7%.
The
proceeds
of
this
surcharge
will
be
remittedtotheCity.
Userfeeleviedthroughticketsurchargetofund
$125millionplusinteresttofundthecapital
project.
TheCommitmentisincreasedby$15millionto
coverhalftheprojectedincreaseinthecostof
thearenabuildingforatotalof$140million.
CityofEdmontonwillcontribute$125millionto
thearenabuildingincluding$45milliontobe
fundedbyaCommunityRevitalizationLevy
RecommendedNegotiatedFrameworkOctober2011ApprovedFramework
-
7/29/2019 Downtown arena update Jan. 2013 #2
24/33
24
Nochangewiththeexceptionthat
Administrationnegotiatedanextensioninthe
deadlinein
the
Land
Inventory
Agreement
from
December31,2012toApril30,2013asper
Councildirection.
Landtobepurchasedatthesamepriceandon
thesametermsandconditionsasinthecurrent
purchaseagreements
plus
third
party
costs
associatedwiththelandacquisitionandzoning.
TheCityscoststobuildanLRTconnectionto
thearenawillbecappedat$7million. TheCity
isresponsible
for
all
operating
and
on
going
capitalcostsfortheLRTconnection.
TheCityscoststobuildanLRTconnectionto
thearenawillbecappedat$17million.
ClarificationthatIfthenetcostexceeds$50
million,KatzGroupistocovertheoverage. Net
Costs meansthegrosscostofthe
Wintergarden lessthe
reasonable
value
of
the
retailcommercialspaceinthesouthendofthe
Wintergarden.
Pedway (Wintergarden bridge)over104Avenue
isrequiredadjacentinfrastructurefunded
outsideofthearenabuildingproject. Katz
Groupand
City
each
pay
half
of
cost;
however,
theCitycontributionislimitedtonomorethan
$25million. TheKatzGroupcontributionwillbe
amortizedoverthe35yeartermofthelease
withinterestcostsincluded.
RecommendedNegotiatedFrameworkCouncilOctober2011ApprovedFramework
-
7/29/2019 Downtown arena update Jan. 2013 #2
25/33
25
EACtohavefirstrighttonegotiateupto3lease
extensionsfortenyearsandwillhavethefirst
rightofrefusalonanysubsequentleaseorland
andbuildingsalenegotiatedwitha3rd party.
KatzGrouptohaveoptionfor3tenyearlease
extensions.
TheCitywillproceedwiththeconstructionof
thecommunityrinkforamaximumof$21
million.City
to
own
and
operate
the
rink
with
all
revenuesandcostsaccruingtotheCity.
However,EACwillactasanagentfortheCityto
solicitadvertisingandsponsorshiprevenue
withoutcommissionorrestrictioninconjunction
withadvertising
and
sponsorship
of
the
arena.
ThisprovidesanopportunityfortheCityto
shareintheupsideofsponsorshippackagesthat
includethecommunityrink. Approvalof
sponsorshipproposalsforthecommunityrink
restswiththeCity.
Communityrinktobeconstructedadjacentto
thearenacontingentonfundingfromthe
federaland
provincial
government
with
total
maximumcostof$21million. Citytoownand
operatetherinkwithallrevenuesandcosts
accruingtotheCity.
RecommendedNegotiatedFrameworkCouncilOctober2011ApprovedFramework
-
7/29/2019 Downtown arena update Jan. 2013 #2
26/33
26
IntheeventofanEACdefaultunderthelease,
Rexall SportsCorp.(RSC),ownerofthe
EdmontonOilers,
shall
be
obliged
to
cure
the
defaultsundertheleaseandassumeall
obligationsundertheleaseinplaceofEAC.
Alternatively,RSCmayenterintoacommitment
tofundpaymentsassociatedwiththeEACs
$140million
contribution
under
anew
lease
withtheCitythatisconsistentwiththeexisting
Rexall Placelease(includingF&Brightsfor
hockey,butnotinrespectofotherevents,and
excludinganyreversionoftickettaxtoRSC). In
anyevent,theCitywillhaveinplaceatickettax
bylawat
alevel
sufficient
to
sustain
the
capital
maintenancelevelsspecifiedintheleasewith
EACandtoprotecttheCityforthe$125million
tickettaxrelateddebt.
RecommendedNegotiatedFrameworkCouncilOctober2011ApprovedFramework
-
7/29/2019 Downtown arena update Jan. 2013 #2
27/33
27
EACwilloperatethenewarenaandwillpayall
operatingandmaintenanceexpenses. Major
building
capital
rehabilitation
and
replacement
willbetheresponsibilityoftheCitytobefunded
with$1.5millionannuallyfromtheticket
surcharge. Allothermaintenanceandcapital
enhancementsandproductivityimprovements
willbetheresponsibilityofEAC.TheCityandthe
KatzGroup
have
agreed
on
adefinition
of
CapitalMaintenancecostsandonanallocation
ofresponsibility.
EACwillpayallrequiredEducationProperty
Taxes. Themunicipalpropertytaxestobepaid
byEACandaffiliatesistobeamaximumof
$250,000annually. Thisamountwillbereduced
totheextentthattheaggregatemunicipaltaxes
leviedonthearmslengthsubtenantsofthe
Arenacarryingonbusinessonlywithinevent
hoursexceeds$250,000annually.
TheKatzGroupistooperatethenewarenaand
istopayalloperatingexpenses,capital
maintenance
and
repair.
RecommendedNegotiatedFrameworkCouncilOctober2011ApprovedFramework
-
7/29/2019 Downtown arena update Jan. 2013 #2
28/33
28
Inordertomoveforwardonthearenaona
timelybasis,theprojectedstartdatefor
construction
would
be
August
2013
through
a
phasedGuaranteedMaximumPrice(GMP).
TheCitywillcontinuetoworktosecurea$100
millioncontributiontotheprojectfromthe
Province
Thelandassemblyistobecompletedby
October31.
Thedesign
process
is
to
commence
as
soon
as
possible. TheCitywillfundthecostofdesignto
a60%levelonwhichthetenderdocumentswill
bebasedinordertogetthebestpossible
GuaranteedMaximumPriceforthearena.The
costofthedesignwouldbepartofthe$450
millioncost
of
the
arena.
The
conceptual
design
workcompletedtodateisownedbytheKatz
Group.Ifeitherpartyelectsnottocompletethe
deal,theCitywillhaveownershiprightstothe
designworkundertakenbytheCity.
TheCity
will
continue
to
work
to
secure
a$100
millioncontributiontotheprojectfromthe
Province.
RecommendedNegotiatedFrameworkCouncilOctober2011ApprovedFramework
-
7/29/2019 Downtown arena update Jan. 2013 #2
29/33
29
Oncethenewarenaisopen,allsubsidiesto
Rexall Placewillbeeliminated.Aticket
surchargewillbeleviedonadmissionsatRexall
Placeand
shall
be
at
the
same
rate
as
the
ticket
surchargetobechargedonnonhockeyevents
attheDowntownArena,toamaximumof7%.
Theproceedsofthissurchargewillberemitted
totheCity.
TheKatzGroupwaivestherequirementforthe
noncompeteclause.
TheCityhasagreedthatacompetitivemarket
betweenRexall Placeandthenewarena
requiresalevelplayingfieldandso,oncethe
newarenaisopenwilleliminateanysubsidiesto
Rexall Place. Asupplementaryticketsurcharge
willalsobeleviedagainstalladmissionsatRexall
Placein
the
future
at
the
same
percentage
(currentlyestimatedat7%)astheticket
surchargetobeleviedatthenewarena. Foras
longastheticketsurchargeatthenewarenais
allocatedtotheCitytopayforthecostsof
borrowingthe$125millioninconstructioncost
tobe
paid
by
this
user
fee,
the
City
will
retain
therevenuegeneratedbytheticketsurchargeat
Rexall Place. CityCouncilwilldeterminetheuse
ofthosefunds;however,theintentofthe
agreementisforthefundsnottogobackto
Northlands.
RecommendedNegotiatedFrameworkCouncilOctober2011ApprovedFramework
-
7/29/2019 Downtown arena update Jan. 2013 #2
30/33
30
Thelocationagreementistobesupportedbya
letterofcooperationfromtheNHL.
TheEdmontonOilersHockeyClubwillstayin
Edmontonfor35years
TheCity
and
EAC
will
complete
the
design
and
buildingofthefacility. Anydisputeswillbe
handledbyMr.Farbrother andMr.Karvellas or
theirdesignees.
Designprocess
to
be
undertaken
collaboratively
betweentheCityandtheKatzGroup.
Nochange;
however,
for
clarification,
the
City
willhaveaccesstotheArenaandWintergarden
forupto28daysayearatEACs incremental
costwithallfood,beverageandotherrevenue
accruingtoEAC. TheCitysusewillbefor
communitypurposes notforCFRorother
commercialevents.
Cityaccess
to
the
new
arena
for
any
28
days
ayearatitsdiscretion.
RecommendedNegotiatedFrameworkCouncilOctober2011ApprovedFramework
-
7/29/2019 Downtown arena update Jan. 2013 #2
31/33
31
Nochange;however,additionalclarification
provided: Acknowledgementofcommunity
contributionof
Oilers
Community
Foundation.
Inaddition,bothPartiescommittocommunity
benefitsincluding(i)establishmentofa
communityadvisorycommitteetoidentifyand
addresscommunityissues,(ii)aseniormember
oftheOilersoperationswillbeavailableto
meetat
least
annually
with
the
community
advisorycommittee,(iii)development/
facilitationoftraining/employmentforlow
income/highneedEdmontonians.
TheKatzGroupwillenterintoaCommunity
benefitsagreementwiththeCity,takinginto
accountthe
activities
of
the
Oilers
Community
Foundation.
NoChange;however,ifEACelectsnotto
proceedwith
the
commercial
development
associatedwiththeeastsideofthearenathat
necessitatesachangeinthedesignoftheeast
walloftheArena,theCitywillberesponsiblefor
thecost.
TheKatzGroupcommits$100millionto
associatedadjacent
investment,
with
aleast
$30
milliontobeinvestedpriortoconstructionof
thenewdowntownarenaandthebalancetobe
subjecttocommercialviability.
RecommendedNegotiatedFrameworkCouncilOctober2011ApprovedFramework
-
7/29/2019 Downtown arena update Jan. 2013 #2
32/33
32
Nochange.Anymethodofpersonalseatlicenses,
condominiumization modelorseatrightswould
notbe
pursued
by
the
Katz
Group.
Nochange.TheCitywillenterintoamarketingpartnership
withtheEdmontonOilers,investing$2million
annuallyinaprogramtopromotetheimageof
theCityandtobuildCityrecognitionwiththe
Oilersbrand.
The
City
will
enjoy
amost
favoured nationstatusinitsmarketingpackage.
Themarketingpackagewillbeofaqualityand
impactthatisconsistentwitharrangements
withtheprivatesectoratasimilarlevel.
RecommendedNegotiatedFrameworkCouncilOctober2011ApprovedFramework
-
7/29/2019 Downtown arena update Jan. 2013 #2
33/33
33
Next St eps
Councilapproval
of
Option
A
as
the
basis
for
design&constructioninaccordancewith
modified
agreement
with
Katz
Group Councilapprovalofrevisednegotiated
frameworkforthedesignandconstructionof
OptionA
arena