At the risk of being too outspoken on this topic, it is my intention to provide Edmontonians with EEDC’s absolute position on the new downtown arena. The rhetoric on this issue will escalate in the weeks ahead, so please consider this to be my statement of record.
Over the past six months, we have have had the opportunity to review the assumptions, business models and pro-formas of all parties involved. We have worked to find common ground between parties when needed, and we have struggled to watch the negotiations between parties unfold as they have. However, our support for this project has been unwavering, as the economic benefits are game-changing and the financial outcomes remain sound.
Specifically, EEDC’s support for the new downtown arena is based on the following fundamentals, in real dollars:
- Involved in $400-$500 million of new construction projects in the immediate vicinity that are targeting to proceed within 18 months of the arena’s approval;
- Aware of an additional $500-$600 million of new capital expenditures planned to proceed approximately 18 months in advance of the arena opening;
- Pro-formas conclude an average annual tax contribution of $19.5 million per year, which supports the 30-year financing of the missing $55 million; and
- Positive economic impact of $17-$19 million per year in hospitality (food, beverage, entertainment) expenditures associated with the physical move of the Edmonton Oilers Hockey Club to the downtown core.
Although the above fundamentals provide substantial justification for the investment, EEDC believes the following qualitative factors should also drive decision making. This investment:
- Unshackles our civic brand from a history of inaction and indecision on major projects, and provides confidence to the business and entrepreneurial communities that #YEG is a place where big ideas can be brought to reality;
- Solidifies Edmonton as the regional sports, entertainment, retail and hospitality centre for the rubber tire tourism market in Northern Alberta; it allows us to create new tourism products that appeal to those within a 400km radius;
- Stimulates a doubling of the residential density required to create a critical mass of after-hours vibrancy and safety in the downtown core;
- Adds necessary hotel capacity to support 8-10 new conferences and major events per year, reducing the ~25,000 room nights currently lost due to lack of supply; and
- Concludes the 25-year debate and threat of moving the Edmonton Oilers to another market, thus affirming our position as a leading professional sports city in North America.
New arenas built in isolation rarely result in positive outcomes – see examples in Ottawa and Phoenix. However, new arenas developed in association with a comprehensive downtown development plan have produced extraordinary benefits. Having recently assessed the impact of major projects in Brooklyn, Pittsburgh, Columbus and Minnesota, we can confidently state that the work completed by City Administration is peer-reviewed as “leading practice” and Edmonton will soon become a reference site for other major municipalities that follow.
Like many of you, I find it most disappointing that the Government of Alberta is lacking the long-term thinking needed to invest in such a critical piece of economic infrastructure. When we consider the $55 million request in the context of their $5 billion annual capital budget, the short-sightedness and political motivation is beyond comprehension.
Recognizing the province’s absence, it is more important than ever that Edmontonians and our City Council step up and show unified leadership. We can comfortably finance the missing $55 million at $2.5 million per year within an annual $800 million municipal capital budget, and we can confidently approve both the CLR and the arena financing needed to move forward.
We have encouraged members of City Council to take a unified position on this matter and push our great city forward. The business community is firmly behind the project and a timely decision, and we all look forward to realizing the positive economic gains over the decade ahead.
Each reader of this blog is encouraged to do the same, as this is YOUR arena and YOUR city. Thank you for being interested and engaged.