As many of us know Edmonton Northlands in its current state cannot survive. The race track, Rexall Place, the Expo center and all its other holdings are now at risk as Northlands is at the point of insolvency. This insolvency is directly related to (if not caused by) the loss of the concert revenue that was “negotiated” away by the City of Edmonton and council several years back. This then placed the revenue in the hands of the Katz group as a condition in building the new downtown arena. At the crux of this tumultuous debt disaster is Northlands inability to makes its $4 million per year loan payments extended to them by the City of Edmonton regarding Expo center, which is far from breaking even on the amount owed.
A public hearing was held on August 31, 2016 on the disposition of Northlands and their new Vision 2020 plan. At this well attended public hearing we heard the how the very heart of the City would be torn asunder if Northlands would be allowed to fold. It was apparent from the start that both from an administrative overview by the city and by Northlands own admission that Northland’s 2020 plan which was submitted to council was grossly insufficient. This plan failed to determine what the highest and best uses for this site are or what they should be. At the core of their ask was a plea for forgiveness of the $48 million loan by the City of Edmonton to Northland’s, which due to our terms to the people we borrowed the money from, i.e. The Province of Alberta. In the end this would cost the City over $78 million to simply ‘forgive’.
So once again the citizens of Edmonton are caught in an unenviable trap, reminiscent of the Metro Line, Millwood’s Double Barrel Project and other projects that City of Edmonton has entered.Another project too big to let fail alongside little confidence in the management team in charge to get us out of the mess we now find ourselves in. The Mayor and other councilors have proposed a two year holiday on its loan repayments so it can come up with a plan for the site. It is worthy to point out this that is not a forgiveness of the $4 million annual payment owing, but rather a delay with the balance left outstanding to be repaid at a later date.
This urgent call for leniency begs the question of “why now?”, given that Northlands knew what was planned out several years ago. Why is Northlands now coming to us today asking for forgiveness? This leads me to my next question, if past performance is any indication of the future why should Edmonton Northlands as an entity even be at the table? I believe this is a worthy question for council to also consider
To date, in my opinion, Northland’s record has been appalling in the handling of their financial matters over the past several years which now puts us–the rate payer–to the unfortunate task of subsidizing Northlands to an even greater degree than we already are today. And yes, this is going to affect your taxes.
All subsidies aside I do not want Rexall to come down, the Expo Center to close its doors or even have the race track moved. But the reality is between all the other “City” building projects we have going on i.e. Blatchford, Valley Line LRT, The Quarters and now Edmonton Northlands just to mention a few; one has to ask: has this council just taken on too much?