Even though the city signaled a year ago some funding changes were needed for the downtown arena project, city council Wednesday finally went through the mechanics to make it happen. $32 Million more of Community Revitalization Levy money is being used because the province didn’t come through as hoped.
Coun. Michael Oshry had one last debate on the matter. “I was quite surprised that the original deal didn’t have the money allocated before we went ahead and started building the project.”
Oshry asked if a project ever went ahead with out all the funding accounted for, and was told it had with some portions of the LRT.
Council was also given updated CRL figures, the money expected to be collected over twenty years of tax ‘uplift’ from new projects in and around the zone created by Rogers’ Place. It is now officially below $1 billion.
“The $984 million is what we believe to be our likely scenario,” chief financial officer Todd Burge told council. “We do have a high scenario that is in excess of $1.1 billion so we’ve got a range of scenarios. We’ve actually brought in some of the economics when this was updated for the budget. But it does factor in what we believe will happen.”
The additional $32 million in CRL that will be used to offset the debt on the project brings the overall total to around half of the total cost. “The total estimated cost of that, principle and interest, is about $457 million,” Burge said. “We’re roughly fifty percent committed as to what we expect to achieve in revenues.”
Coun. Tony Caterina asked if the Katz Group had been approached to see if they could help with the missing $32 million.
“The conversation has been at the table,” confirmed sustainable development GM Gary Klassen. “The lease holder is expecting us to maintain the agreement we entered into. So the answer is they’re not prepared to enter into a $32 million contribution.”
“Council is aware there had been some additional costs in the project that they have wholly picked up. But that’s not one of them,” Klassen said.
CRL cash comes with the province foregoing the education portion of property tax that normally would be collected. “Everything in the CRL is essentially twenty percent off for the City of Edmonton,” said Mayor Don Iveson.
“The point was that versus going after another source of funding for this $32 million, there’s an advantage to using the CRL and the CRL is in good shape, notwithstanding the economy. We can still see the construction towers, we can forecast the tax revenues we’re going to get off what’s being built today and it’s more than sufficient to pay back the CRL, including this $32 million.”
The missing $32 million was made up of $25 million that former Mayor Stephen Mandel was hoping to get out of a previous municipal affairs budget item on cooperation between multiple municipalities. Another $7 million was expected to be matching funds from a $7 million federal grant.