After a heated debate at City Hall, councillors voted Wednesday to use MSI funding as leverage to pay for a portion of the missing $100 million for the downtown arena.
Councillors voted 8-5 to use $3 million per year of MSI funding as leverage to borrow $45 million over a 20-year period to pay for a portion of the missing $100 million for the downtown arena.
However the city will only move forward with borrowing $45 million if the province confirms it will provide the remaining $55 million.
On Wednesday, a master agreement, location agreement, as well as the MSI funding option, were presented to councillors.
Councillors voted 10-3 to approve the downtown arena master agreement in principal.
The master agreement outlined costs associated with the arena project - that remained relatively unchanged from the numbers councillors approved in January, except for an increase in the cost of the winter garden.
The winter garden’s cost rose from $53 million to $56.6 million – changing the total cost of the project to $604.5 million.
The master agreement also states tha the city would only be able to use the winter garden and arena for 28 days of the year - for non-commercial events.
The arena project also includes a community rink ($21 million), LRT connection ($7 million) and pedestrian corridor ($15 million), along with $25 million for land.
The arena itself would cost $480 million.
The location agreement will see the Oilers stay in Edmonton for 35 years.
Who pays what
The city was expected to contribute $233 million to the overall cost, while the Katz Group would put in $146 million.
A ticket surcharge would cover $125 million and the parties would be seeking an additional $114 million from both the provincial and federal governments - with $100 million going to pay for the remaining cost of the arena.
Farbrother said that the Katz Group had been asked a day after the provincial budget was released, whether they could put up the missing $100 million.
The Katz Group said no.
The federal government has also stated that it does not provide infrastructure funding for professional sports teams, a policy that has been applied across Canada.
The province has said repeatedly that Edmonton can use MSI to help fund the downtown arena.
Municipal Sustainability Initiative (MSI)
MSI is a fund municipalities receive for infrastructure projects from the province.
Some councillors expressed concerns about using MSI to fund the arena.
Coun. Tony Caterina expressed concerns that using MSI funding for the arena would mean other infrastructure projects would suffer.
"There is a tradeoff here," Caterina said.
Coun. Linda Soan questioned putting the arena over other various infrastructure, including fire stations and libraries, that “serve Edmontonians on a daily basis,” and could use MSI funding.
But Mayor Stephen Mandel said the province wants the city to use MSI to help pay for the arena, and that is what is now being done.
"This motion states quite clearly what the province has asked us to do," Mandel said.
Sign, sealed, delivered?
John Karvellas with the Katz Group said Wednesday that "it remains a very complex deal" but Karvellas believes everything can be approved and signed by the end of the month.
"I'm confident that with hard work & goodwill, we will be able to sign, seal and deliver everything by the end of April," Karvellas said.
Edmonton Oilers President Patrick LaForge said he’s happy with the councillors’ decision.
“We think council made a positive step in the right direction,” LaForge said.
“We look forward to the next round.”
When asked if the approval of the master agreement marked a ‘done deal,’ Mayor Stephen Mandel said:
“It’s much closer today then it was yesterday.”
A new arena project schedule was also released, indicating that construction could begin on the arena project by spring 2014, with the arena opening in the fall of 2016 – depending on whether the province can confirm it will contribute $55 million to the project.
If the province says no, Mandel says the issue will be brought back to council.
The city hopes to sign a final master agreement next month.
CTV hosted a live blog of the Downtown Arena Update. Below is an archive of the live blog:
