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.]

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.

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:

• understanding that we need to come to a common and meaningful definition of sustainability, and recapture that word (or, alternately finding other language – see the inspiring paper on ‘resiliency‘);
• a big focus on energy, particularly in respect of depleting fossil fuels, transitions and alternatives;
• a honest look at what adapting to climate change may entail, since it’s looking pretty likely
• closely involving the city’s Next Gen Committee and Youth Council in this work;
• using social media to engage the public.

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

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.

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.

I received the following update from the Manager of Transportation Operations this afternoon which outlines significant changes that changes are being implemented and the timelines:

- signal phase structure is being modified – rather than separate eastbound and westbound phases, the east/west movements will occur at the same time, and then in turn east/west left turns will occur at the same time

- this change in phase structure will allow a reduction in the overall signal cycle from over 3 minutes to less than 2 minutes due to combining movements on the two pedestrian crossings, in combination with other signal phase duration changes

- in combination, these changes will minimize the risk of a signal phase being skipped more than once, however additional work needs to be done to further optimize the operation

- we are working with LRT to see if we can have a more regularized arrival pattern at the intersection – the current LRT train operation is highly random which affects phase skipping

- with the replacement of the central control computer later this summer, additional flexibility will be provided through the ability to more directly intervene in signal timings in the field

Instructions have been sent to EPCOR regarding the required changes with direction to implement as quickly as possible – worst case scenario will be some time tomorrow, but we will keep you posted once we have more information.

We did observe delays of up to 15 minutes in worst case for eastbound and also observed pedestrians crossing 111 St without waiting for the signals, both factors which are not acceptable and risky.

I can assure all those who have been impacted by this problem that resolving this is a top priority.

The City and County of Leduc are close to offering a commuter service to their citizens and employers that would connect to and/or through the airport. This service would most likely be operated by ETS as a charter, as is currently done for Spruce Grove and Ft. Saskatchewan, and would operate at peak hours only with a focus on moving commuters.

I argued that we have an narrow window of opportunity to leverage Leduc’s interest in providing transit for their citizens, and partner in a service which would also serve our citizens; this would compliment the Edmonton Regional Airport Authority’s interest in a relevant transit link from EIA to Century Park, which opens this week.

There was lengthy discussion about what the acceptable cost recovery would be for this service. Our ETS Advisory Board argued that while 100% cost recovery might be possible with only a 9% share of trips to and from the airport; capturing only 4% of those trips would match the usual cost recovery ratio of ETS service, which is around 43%. This assumes no contribution from the other municipalities or the airport authority, and a $2.50 charge each way. I’ve heard support for a higher cash fare as well, but pricing will be explored as part of any negotiations.

I believe we can effectively partner with the neighbouring municipalities and the Airport Authority, share any net cost of any service, establish a good precedent for regional collaboration, and make a stronger application for provincial Green Trip funding support. In that spirit, the motion which I proposed and was passed reads:

That the Transportation and Public Works Committee recommend to City Council that Administration approach the City of Leduc, the County of Leduc, the Edmonton Regional Airport Authority (and the Province as appropriate) to attempt to negotiate a partnership agreement and budget impacts for Council consideration that would implement peak and off-peak public transit service running direct from the Southern terminus of the LRT to the International Airport, building upon the potential ETS charter service serving the Capital Region Board partners and report back to the June 23, 2010, City Council meeting.

It’s not a done deal as this will doubtless get further debate at next week’s Council meeting, and then who knows how the negotiations will unfold.

Mack Male provided a nice summary here of some of the background. This is the Edmonton Journal story on the discussion. The Sun’s take is here.

The Katz Group proposal for a Downtown arena and related development remains a work in progress, which has contributed to uncertainty both for members of City Council as well as the public.

I can relate my thinking about it based on what I know so far.

Firstly, I’m still not convinced that there’s any crisis with the Coliseum/Rexall Place. I believe it could last another 10-20 years without major renovations.

Secondly, with regard to planning a ’sports and entertainment district’ downtown, I don’t have any real objection to the general concept. I gather a rezoning application was submitted very recently but I haven’t seen the specifics, and it likely will evolve with input from City planners. Whether I could support the planning permission (in terms of urban design) remains to be seen. There will be at least one public open house as well as a public hearing before council before any planning permission is granted.

Third, and separate entirely from the urban planning questions, are the financing questions: I, for one, am not keen on using the city’s borrowing power to finance any part of the development.

City borrowing power is prudently limited by both city policy and provincial law, and we need all of what’s remaining for the next phases of LRT expansion. I also don’t think it’s appropriate in general for the city to provide financing for-profit enterprise. We partner with not-for-profits all the time, but private enterprise has traditionally fended for itself.

Further, I’m not keen on the city owning any part of a new arena. If there is a new arena development it should survive financially on its own merits. Main reason why is that I really don’t want the city to wind up on the hook for developing a new arena every generation to meet the tenant hockey team’s specifications.

It’s unclear how the public will be formally consulted on the financing question. I am receiving a lot of input on this question and would be happy to hear from readers of this article.

I’ve posted a few notes on my blog about this and you can view the arena items by typing www.doniveson.ca/tag/arena in your browser and feel free to provide comments that way as well.

The Katz Group has launched a website at www.revitalizedowntown.ca with their perspective on the project.

Three units, south facing, in lovely Bonnie Doon, Edmonton.

This project has some really neat elements: the adjoining and parallel exterior walls are straw bale construction, which is good for about R-50, and has a fire rating of more than double the building code requirement. The front and real walls are timber construction because of the windows, but still well insulated. The owner of the end unit reported a $21 gas bill in January. Also, the wood material is FSC certified and much of it is sourced locally. Even the paint is low-VOC (volatile organic compounds – aka the stinky stuff). Many of the materials, like the paint, the recycled paper countertop materials and bamboo flooring, are available through Carbon Boutique here in Edmonton.

Arnold and Chris on the main floor. It's a very warm space.

Needless to say I was excited by this project. As important as the nearby Strathearn Heights project and others like it are to transforming our city, smaller projects may in fact play a much more transformative role over time. The reason is these kinds of projects can fit reasonably into almost any neighbourhood, and may in fact be prove more appealing, affordable and suited to many families. Given recent concern about school closures in mature areas, encouraging this type of development is part of the transition to moderately higher densities that can better support all manner of amenities including schools. Take a walk through Kitsilano in Vancouver and you’ll find lots of this sort of development.

This lovely stairwell is also light well and a cooling tower when you open the windows at the top.

I pushed for more opportunities for precisely this form of development on corner lots when Council was debating the Infill Guidelines last year but faced opposition on a number of fronts since the Guidelines were the result of considerable negotiation with stakeholders, especially the EFCL. ‘Not to worry,’ I was told – we’ll get another crack at this question when we look at expanding opportunities for these kinds of medium-density projects with some of the Transit Oriented Development up-zoning that is supposed to come with new LRT stations. Further, we’ll look at this again at the two-year review of the Infill Guidelines.

I spoke with Arnold and Chris about some of the challenges of doing this project. They hastened to indicate that for the most part the city has been quite good to deal with. However, the big one is that if they were building a duplex or a single detached home the permit gets treated like a single home. Once you cross from two units to three the permit application goes into the ‘multifamily’ category, which takes longer and requires much more (like a detailed lansdcaping plan, even though the yard is the same). I’ve heard the same frustration from the suburban developers who would like to build more of this product but face a real cost/time/hassle barrier in going from duplex to triplex.

In this case the higher multifamily standards entailed tens of thousands in special drainage work, culminating with the installation of a drainage catchment basin in the back yard. Here’s the kicker: they’re putting a green roof on this project which will reduce the roof runoff to substantially less than an equivalent sized single family home or duplex on the same lot without a green roof. You can’t see but I’m still shaking my head. Must fix this. I Will start by emailing the director of planning a link to this post.

Note the offending drainage grate. The landscaping and garage will happen in the spring. I like that they saved this apple tree too.

The mayor has put speculation to rest an announced that he will run again. The pundits are already reading the entrails to see what impact it will have on this fall’s elections. I am glad the question is settled. Everyone seemed to be in a much calmer state of mind at Council today.

Also the province announced further changes to Municipal campaign finance reform via Bill 9. It proposes to fix some of the implementation issues with the previous bill, but it also relaxes limist on contributions per person/corporation/union to $5000 per year instead of $5000 per campaign period (which is three years). Might as well not have a limit. I have a motion establishing a $5000 contribution limit for Edmonton that was postponed until we get an update on Bill 9.

Last week I was able to take a tour of two of our fleet facilities – the Westwood transit garage and the Davies garage where most of the rest of the fleet gets fixed. There are more than 4000 vehicles in the city fleet and they all need tires, oil changes, and sometimes a whole lot more than that. Got some neat pics with the iPhone.

These buses will be back on the road for afternoon rush hour.

I was impressed with how much our staff can handle. This bus was in a head on collision and is being rebuilt. Insurance will cover the cost above the deductible.

We have 150 trucks that can swap out sander units (silver) for dump truck bins (white, lower right), and water trucks and asphalt hauling bins - Transformers-style. Designed and custom built by the city's own fabrication shop.

Tomorrow I will be doing a site visit of Quesnell bridge to see construction progress. Did I mention I love field trips? Have since elementary school.