Yesterday afternoon it was announced that the City of Edmonton had completed the land purchase for the downtown arena that will be the future home of the Oilers. But the City didn't just purchase the arena land, they also purchased a parcel of land adjacent to the arena development and another parcel south of 104 Avenue. The final sticker price for all of this was $74.9M. For those who've followed the arena negotiations closely, that final tally probably jumped off the page as the previously discussed price had been $20M. To be fair, the $74.9M is a little misleading; Paula Simons provides a good explanation of the cost breakdown:
The seven-acre site where the arena itself, as well as a planned public skating facility, will sit cost the city $24.6 million, plus an additional $1.3 million in legal fees and carrying costs. That $25.9-million total is roughly in line with the city's original estimate.
The city has also purchased the adjacent five-acre parcel for another $15.4 million. "That will allow us to control the development that goes in the area in terms of the time, the type and the form," [City Media Contact Robert] Moyles told me.
As well, the city has purchased 3.7 acres of land south of the arena site, and east of the Greyhound bus station, for another $33.6 million. However, Moyles said the Katz Group has agreed to buy back that land and has already paid the city $16.8 million toward that purchase.
There are a couple of takeaways from this deal. First, while the cost of the arena lands may be "roughly in line" with the $20M estimate, $41.3M is not. The details surrounding the land negotiations had to be done in camera but if the amount of land being discussed for purchase was significantly changed from what had been previously made public I think the public should have been informed. That we are less than a week removed from Council's approval of the arena deal and already the costs seem to be shifting is not a good sign.
And secondly, the $33.6M for the land south of 104 Avenue that the Katz Group will buy back from the City addresses the amendment to the arena deal presented by Tony Caterina asking that the Katz Group invest $30M for adjacent development immediately. My expectation had been that this investment would be in the form of a building and not ownership of a parking lot, but I guess the devil is in the details. The other $70M that has been promised is still there but when we will see it is unknown as any additional investment from the Katz Group will now be contingent on market conditions. So basically the City has no guarantee of any development occurring.