Archive for the ‘2007-2010 Term’ Category

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Arena: Katz Group Pitch

Jul
24
2010

This post follows up on three previous posts on the Arena topic: here, here and here.

Mr. Katz came to City Hall this week in response to Council’s invitation to come and publicly present his vision for the Arena District. He clarified his position on funding: $100 million toward the arena itself, a new $100 million toward the nearby development, and reminded us that he spent roughly $200 million buying the team in the first place.

The Katz Group asserted that the Oilers will not play in Rexall Place, renovated or otherwise, past 2014. They would not clarify what happens after that, which leaves us all to speculate. But it does present a deadline and, more or less an ultimatum to deliver a new arena.

It would seem that Council may be prepared to go ahead and partner with him to build a new arena publicly. Council directed that this not involve raising taxes, and asked for Northlands to be brought back to the table (all the motions are below).

I’m still not sold.

My questions of the Katz delegation (here on video at the Edmonton Journal website) and city staff focused on two main points: exploring why a private funding option appears to have been ruled out, and what risks and opportunity costs the city might experience by being involved in building and financing the arena. My motions at council, which passed, probe these issues further:

Downtown Arena – Private Development

1. That Administration develop a benchmark scenario for private development of the facility and report back on the proforma for this. If it is Administration’s conclusion that it is not feasible for an arena to be built privately, then detail and quantify the financial gaps that stand in the way.

Community Revitalization Levy – (Downtown) Risk Leakage

2. That Administration report to Council on the risks of leakage of development potential from the pending Quarters Community Revitalization Levy to the proposed Arena District Community Revitalization Levy. [I wrote about some of the issues with levy financing in a previous post.]

The key message in the Katz Group pitch for a new arena is the assertion that the Oilers are ‘not sustainable’ as they operate today. They argued that this is because:

Rexall place does not meet their needs - not enough seats and luxury boxes, which translate to lower ticket revenues than might be realized in a new arena.

They don’t get all revenues realized from the arena - apparently other NHL teams get the non-hockey related revenues from their buildings, whether they own them or not; in other words, they want the business Northlands is doing on the other nights between hockey games. They also want a larger building with more concession opportunities.

The team has lost money over the last ten years, including each of the last two - it was said that Mr. Katz has subsidized the team with several million dollars in both seasons he’s owned it.

After speaking to the community benefits of the team Mr. Katz put it plainly: “But the team is also a business. And like any business, it needs a sound financial base in order to be sustainable, which today it is not.” This remark comes about five minutes into a video of his remarks on the Edmonton Journal website.

The Katz Group essentially argued that the Oilers play in a small building in a small market and that because of insufficient revenues they can’t afford to build their own rink – even if they had control of non-hockey revenue and could sell more seats.

They also argued that three of the last four Canadian NHL arenas failed – all of which were built privately – and that they are not prepared to take that risk (they supplied me this document on this point).

There may in fact not be enough money in the hockey business in Edmonton for them to afford to build a rink. If that’s true, and if they won’t play at Rexall, and if we want to have a hockey team, their logic flows that it has to be built by the city.

And so the real question Council was led to was: what’s it worth for Edmonton to keep the team? I don’t think there’s all that much risk of Mr. Katz moving the team. I think the issue is what happens if he felt forced to sell the team – and then who knows what the next owner might do?

The main motion, moved by Cllr. Batty was:

That Administration:

1. Enter into discussions with the Katz Group of Companies and Northlands on a framework for the financing, not including an increase in current property taxes, and operations of a potential downtown arena and entertainment project.

2. Develop a community consultation program, in line with City Policy C513, on a downtown arena and entertainment district project on a city-wide basis.

Anticipated Impacts on Northlands

3. Prepare a report for Council on Edmonton Northlands’ anticipated impacts and opportunities relating to any potential downtown arena and entertainment district project.

Invitation to Edmonton Northlands

4. Invite Edmonton Northlands to make a formal presentation to Council on the impacts of a new sports and entertainment facility and the future of Rexall Place and the overall financial health of Northlands.

Cllr. Sloan’s motion:

Downtown Arena – Potential Impacts

That Administration prepare a report on potential impacts on City operations, infrastructure and investments of a potential downtown arena and include an update on any commitments of Federal and Provincial funding for this project.

[Update, 2pm July 26: my written questions to Katz Group and City Administration posted to the comments area below.]


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Posted in 2007-2010 Term, Arena | 44 Comments »

Budget Forecast: 2011

Jul
09
2010

The following ran in last week’s Edmonton Examiner as part of our monthly ‘Councillor Connection’ column. It is reproduced here for reference.

Last week Council established 2011 budget guidelines for City Administration to work towards.

As with last year, Council set a target for an overall tax increase of 5% for 2011.

I recognize that very few Edmontonians’ incomes will increase that much in 2011, and that tax increases that exceed inflation are especially difficult for those on fixed incomes.

I wish that municipalities in Alberta had access to other forms of taxation, (such as the sales taxes US cities have, or a dedicated portion of the income tax like Winnipeg gets), which would be far more progressive, and would reduce our over-reliance on property taxes. In this vein, we will be looking at whether there are some user fees that could be increased to support certain services rather than taxes.

I should stress that the main drivers in the proposed increase are infrastructure related.

The guideline includes a 2% charge dedicated specifically to investments in neighbourhood roads, curbs, and sidewalks. This would be the third year of 2% increases in a row for this program, which altogether will increase investment in neighbourhood reconstruction and preventive maintenance by more than $50 million annually.

At this rate we’ll be able to tackle the backlog of work in mature neighbourhoods within 10-20 years instead of 50-100, while also preventing newer neighbourhoods from falling into the same disrepair.

There are also debt service costs associated with the major road and bridge projects we see unfolding around us, as well as the new recreation centres. These payments alone are equivalent to almost a 3% tax increase.

There are other costs under pressure from the growth of the city – i.e. the more we spread out the less efficient our emergency services, waste and transportation systems become. These operating costs are rising faster than the tax revenue we get from new development.

In other words, continued sprawl is pushing costs, and in turn taxes, up.

On the bright side, previous years’ larger increases were  also driven by a combination of increased infrastructure spending and labour market pressure. With the economic slowdown we can anticipate a more moderate cost of labour for the city, and better pricing on infrastructure, which is why we’re eager to push ahead with more LRT.

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Posted in 2007-2010 Term, Taxation | No Comments »

The Way We Green

May
20
2010

Earlier today I helped launch the City’s next big planning exercise, namely the new environmental strategic plan dubbed ‘The Way We Green‘. It’s picking up after the 2006 Environmental Strategic Plan, which was good but more internally focused on the city and not very high-profile.

The project is building on the widespread consultations in 2008 that led to the city’s 30 year vision and 10 year overall strategic plan, The Way Ahead. That same consultation work fed into the creation of the first three specific strategic plans: The Way We Move (our transportation plan, approved in the fall of 2009); The Way We Grow (our development plan, which should be finalised next month); and The Way We Live (our ‘people plan’ which will to council next month).

But now it’s time to drill down and focus specifically on the environment – the services we get from it, the impacts we have on it, and the value we place on it.

The City is inviting Edmontonians to learn more and participate by visiting the project website at www.edmonton.ca/thewaywegreen.  The city commissioned the Edmonton Sustainability Papers, a provocative set of 21 essays that cover virtually every imaginable topic from the how price signals can shift behaviours affecting our environment to the concept of an ecological footprint. It’s going to take me a while to get through them all but the ones I’ve read are just what we had in mind. There are also videos covering topics from peak oil/peak energy to ecological economics.

There are a few things I’m really proud to see as part of this project that I specifically pushed for:

This is critical work. Indeed, I think it’s one of the most significant conversations our community will ever have.

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Posted in 2007-2010 Term, Environment | 3 Comments »

Examiner Column: 111th Street Intersections

May
06
2010

What follows ran in today’s Edmonton Examiner as my monthly column. It follows up from this previous post.

I heard loud and clear that last week was challenging for many motorists encountering LRT on the south side, especially those who use 51 Avenue.

The transportation department remains focused on optimizing the performance of all intersections along 111 Street.

However, we all need to accept that these intersections will not operate like they did before the LRT opened.

The wait for left turns and east/west-bound traffic will be longer all up and down 111 Street. This was not a traffic engineering error.

The disruptions we saw at 51 Avenue last week were clearly the result of an error. Fortunately, last week’s traffic was moving better after a significant change to the signal timing.

I personally visited 51 Avenue several times during the first part of the week to see the problems for myself and understand the transportation department’s approach to the problem.

On the bright side, travelling north/south will be faster since that is the dominant flow of traffic and trains. In fact, a number of constituents have told me their commute by car up 111 Street is faster than before the train opened.

One way to think about this is that opening LRT is like building a six-lane freeway in terms of its capacity to move people, so when you’re crossing 111 Street in a sense it’s like crossing the equivalent of a 10-12 lane road.

Many have contacted me to ask why the major intersections were not tunneled under or bridged over, and the decision was made during the planning phase based on computer modeling of each intersection. Each grade separation costs millions to implement, and cause more serious disruption so they are used very sparingly.

Other citizens have asked whether the experience at these intersections will change the city’s intentions to run the new southeast-to-west line on the surface, including through downtown.

This is a fair question that we will have to explore. The initial plans involve limiting many of the left turns, which wasn’t done on the South LRT.

Feel free to contact me if you have any questions at 780-496- 8132 or at don.iveson@edmonton.ca.

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Posted in 2007-2010 Term, Road Maintenance, Transit | 4 Comments »

New Standards for Side Street Snow

May
05
2010

This post is a follow up from my Snow Policy Must Change post.

Yesterday at Transportation and Public Works committee we debated the proposed new Snow Policy. My comment to the head of Transportation was “I couldn’t have written this better myself.” It calls for just what I called for back in January, specifically: a 5cm snow pack instead of the 10cm pack maintenance, which hasn’t worked. The full report is here.

This appendix entitled Cost Summary of Residential Plowing indicating that we’re budgeting $2.4 million to maintain the 10cm pack under current policy. The proposed 5cm snow pack standard would cost $800,000 more annually, which is pretty reasonable.

Plowing to bare pavement without removal (i.e. with large windrows) would cost $6.6 million more per year than what we spend now, or $8 million per year. Plowing to bare pavement and removing the windrows would cost more than ten times what we’re spending annually ($8M for plowing, $15M for trucking, $2M for snow site operation), plus the development of an additional four snow storage sites at $25 million a pop. Not so reasonable.

City staff also undertook extensive public consultation work confirming there is little support for a bare-pavement policy, and broad support for maintaining a snow pack and limiting windrows.

The new policy clarifies that windrows less than 30cm high on driveways will be the adjacent property owner’s responsibility to clear, while windrows 30cm and above higher than this will be cleared by the city.

The policy was recommended to Council and will likely be confirmed next week. We’ll need to find the $800,000 in resources, but Council should be able to find this in the 2011 budget without much, if any, impact upon the tax levy.

The most relevant text in the new policy reads as follows:

  • In any given snow event , a city-wide residential plowing program will be initiated (including Alleys ) immediately after the Arterial and Collector road network has been plowed and considered to be in safe condition. Residential Roads will be bladed to a 5 cm snow pack condition.
  • When rutting or snow drifting occurs residential roadways will be bladed to maintain a level snow pack condition.
  • Service level will only involve the blading of snow. Windrows ( less than 30 cm in height) left behind blocking driveways will be the responsibility of the adjacent property owner. Windrows (more than 30cm in height) left behind will be cleared as to not block driveways.
  • Snow will not be hauled away.
  • Notification of residential blading or plowing will be announced through the media. A parking ban will not be used.
  • Plowing to bare pavement on residential roads may be initiated at the discretion of the City Manager. Bare pavement shall include:
    • All driveways, crosswalks and corners will be opened.
    • Where windrows of snow are created they will not be hauled away.
    • In cul de sacs snow will be stacked in the centre and hauled away.
    • Alleys are not covered under city-wide bare pavement policy.

The committee asked for more information about the terms under which the last clause about plowing to bare pavement would cause the City Manager to exercise that discretion.

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Posted in 2007-2010 Term, Snow Removal | 4 Comments »

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