Unanimous Approval of TOD Guidelines

City's Approval of Transit Oriented Development Guidelines falls short in Protecting Communities.

This morning, the Executive Committee of Council gave unanimous approval to the Administration's draft guidelines for Transit Oriented Development. While the guidelines are exemplary in advancing and articulating the vision and values associated with densifying our city and expanding LRT, they are weak in their protection of community character and offer no firm enhancements or securities to communities.

A key shortcoming in the guidelines is as follows: Neighbourhoods as described in the Station Area Type Characteristics (page 11) make the assumption that all communities have predominately single family homes. This is clearly not the case. No references are made in the guidelines to the baseline densities and housing mix. If you fall within 400 meters of a station, the guidelines apply generically. There are no triggers or exemptions and no front end analysis of core service provision before stations and accompanying densities are approved. It may be elementary to note, but necessary to emphasize that the majority of Edmonton's mature neighbourhoods were built to accommodate predominately single family homes as 50 percent of the housing stock. What happens to core service costs and infrastructure if large multi-story developments suddenly appear in neighbourhoods with aging fire equipment and already stretched garbage collection and police response?

Intensifying is philosophically admirable, but it must be backed up with some reality. Densifying cannot be successful if it results in a further loss of green space, an erosion of core service provision or two few commercial and recreational amentiies to support the neighbourhoods population.

Arena Debate Closing Remarks Video

Global TV captured my remarks on video. They are below for those interested:

http://www.globaltvedmonton.com/video/arena+vote+linda+sloan/video.html?v=2161594290#only+online

Arena Debate Closing Remarks

On Wednesday, City Council voted to support the arena agreement framework and move forward on design. I voted against this course of action. Below are my closing remarks:

I maintain reservations regarding costs and subsequent risks that the City is undertaking. Even assuming the province comes through with $100M that isn’t MSI funding and approves the CRL, we are looking at close to $250 of capital costs including:

• $125 Arena
• $? Land Costs beyond the $25M originally suggested
• $34.5 104 ave and incremental pedways
• $17 LRT
• $7 Community rink
• $? Off-site servicing
• $? Road upgrades

All this with no guarantee the arena district will result in revitalization. The Katz groups claim they have been talking to major hotels and businesses, but none of those have come forward to express public interest in building on the surrounding site. The money we pay towards this project is deceptive. Interest payments the City pays over a 20 year term are projected at an additional $97M (attachment 5 from yesterday).

I am further concerned that a lack of clarity has resulted in the Council and Administration to loose face in front of the public. Poorly communicating the components of the framework to the public is one component of my frustration, but I find myself equally frustrated with the lack of clarity regarding our contribution to this project - $24M of which is currently under the guise of “re-directed expenditures”. I believe we have also failed to give due consideration to the current tax revenue being lost by purchasing the arena lands. This year, those revenues were valued at $768,000. Even assuming assessment values and mill rates remained constant (likely to go up), that constituents a $15M revenue source over the next 20 years.

Another aspect of this deal breaks a century old partnership with Northlands. With no official notice, active involvement or input the good will and working partnership that has brought so much culture and entertainment to Edmonton has been abandoned to construct this deal with a largely inexperienced partner.

Finally, I have not been satisfied that we have sought sufficient collateral from the Katz group in the case he defaults from his contribution. Taking over the arena and its revenues in the case of a Katz default also entails taking on the costs and finding the personnel to manage it. This is simply not sufficient when dealing with a project of this magnitude.

Thoughts on the Arena

On the tails of a motion introduced by Councillor Gibbons at our June 1 Council meeting, I thought I would put forward a few of my thoughts on the subject of a new arena.

We have been told by the League and Oilers ownership that the team will not play in Rexall place past 2014, and will be gone forever if a new arena is not built using public dollars.

Such is the ultimatum pervading the entire discussion: If you oppose majority-public funding for an arena, you want the Oilers to leave Edmonton.

I want to be clear that this is not the case. I believe the Oilers are a valuable and beneficial part of our community, and their withdrawal would be disheartening and detrimental. However, it is difficult for me to accept that in a revenue-sharing league, a profitable team would be swept away with all the risks and costs that come with relocation to an unproven (or already-failed) market.

Even if relocation was a possibility, I refuse to have the City's bargaining position undermined by this threat.

I was elected to protect the interests of Edmontonians. I would be remiss to support the negotiating framework presented to Council without prior notice in-camera, a framework which I believe is a bad deal for Edmonton.

The agreement that came before Council on May 18 was framed in response to the original 17-points, but was a proposal that added new elements. This included an allowance for a $250 million loan for the city, half of which would go the Katz Group interest-free; a non-compete clause with Northlands over the coliseum; and the City's purchase of the arena's land, meaning not only an upfront cost to the City, but also a loss of tax revenue on the site for at least the next 35 years.

Public money is still public money. A Community Revitalization Levy and potential funds from all three levels of government currently account for $225 million of the capped $450 million price of the arena itself. Not included in this are costs to buy the land, upgrade the LRT and other infrastructure, and for a community rink (to which the Katz group would contribute nothing, but would still receive operating revenue).

A CRL derives funds from the additional development it is argued the arena will inspire. I remain unconvinced both that development would occur directly because of the arena, and that a CRL is fair to taxpayers. The new demand for more emergency services and infrastructure within the CRL zone would need to be met by the pre-CRL tax pool.

The Katz Group, in addition to its $100 million, pays the operating expenses of the new facility, but also receives all revenue from all concerts, sports games, and other events.

The $125 million from a user fee is just that, from the users. This is not a Katz contribution, but the Group would still charge for the fee's management.

Of course, over the course of the 35-year agreement, the City will "own" the arena for its troubles and hundreds of millions of initial investment. But at the end of that term, we would just be the owners of an aging building in need of replacement.

Finally, there is the additional $100 million Katz offered for surrounding development. However, that is contingent on the investment being commercially viable. They will invest $100 million is if they expect to get more than $100 million in return. If they truly believe the arena will be the focal point for downtown revitalization of downtown, a commitment, not a contingency, would be the best support of that argument. $100 million could very well ensure the success of the CRL.

I am not opposed to a new arena, but I want all citizens to be the beneficiaries of huge public investment. In my opinion, the approved terms are unfair to the people who will pay. The whole process has been too rushed and opaque to satisfactorily answer the numerous lingering questions.

The $100-$200 million offered by Katz is not charity; it is business. It is disingenuous for them to try to disguise it as otherwise, and dangerous for Edmonton if Council sees it differently.

Councillor Gibbons motion will be debated at Council on June 22.

Arena Clarification Motion

At the June 1, 2011 Council Meeting, Councillor Gibbons gave notice that the following motion will be made at the next Council meeting on June 22. It contains a number of questions I believe vital have answered before moving forward. The full motion is below.

NOTICE OF MOTION – ARENA

At the next meeting of City Council, I intend to make the following motion:

On May 18, 2011, City Council passed a motion directing, among other things, the administration to finalize a master agreement with the Katz Group based on the financial framework and that the content and form be subject to City Manager approval.

Accordingly, I would ask that the administration prepare a report answering the following questions:

1. I note that the motion of May 18, 2011 simply indicated that the verbal presentation of the City Manager remain in private pursuant to the Freedom of Information and Protection of Privacy Act. However, there was no motion directing the administration to keep the power point presentation in private. When will the power point presentation be made public?
2. I would ask that the administration provide its analysis it used to indicate that the presentation of the City Manager remain in private pursuant to sections 16, 21, 23, 24, 25 and 27 of the Freedom of Information and Protection of Privacy Act.
3. On April 6, 2011, City Council set out 17 terms and conditions in which the administration was to negotiate a financial framework with the Katz Group. I note that some of the conditions approved by City Council have changed; therefore, I would ask that the administration to provide a report on the following questions relating to the 17 conditions:
1. The user fee of $125M to fund capital costs was always intended to be controlled by the City of Edmonton. Now it appears to be controlled by the Katz Group. What authority did the administration have to change the direction of Council on this condition?
2. Under what basis did the $20M CRL contribution increase to $45M? Has the subject area been increased in order to accommodate the increase in CRL contribution? If the CRL contribution of $45M cannot be collected because of reasons beyond control of the City of Edmonton, are the taxpayers of Edmonton responsible for any shortfall? How long will it take to collect $45M in CRL contributions?
3. The April 6, 2011 motion indicated that the City of Edmonton's contribution would not exceed $125M. What options are available to the City of Edmonton to cover the remaining $80M, assuming that the CRL contribution is now $45M?
4. Is the City of Edmonton's purchase of the Katz Group's lands considered part of City's $125M contribution or is it an amount over and above the cap of $125M?
5. What assurances does the City have to ensure that the Katz Group conducts regular maintenance on the building?
6. What is the status/discussions for the balance of funds being secured by other orders of government?
7. What is Northland's position with respect to City Council's decision of May18, 2011?
8. I note that one of the conditions was that the City was to negotiate a potential revenue sharing arrangement with the Katz Group. This condition has not been satisfied. Please provide an explanation as to why this condition has been changed and what are the implications for the City of Edmonton.
9. Who will own the naming rights to the building?
10. One of the conditions from April 6, 2011 was that a final negotiated agreement be brought back to Council. However, I note that the motion that was passed on May 18, 2011, indicates that the administration is to finalize the master agreement and that the content and form be subject to City Manager approval. Does this mean that City Council will no longer see the final agreement? Does this also mean that City Council will no longer be dealing with any of the issues relating to the arena?
4. It was indicated at the May 18, 2011 presentation and reported in the media that the maximum building costs for the arena will be $450M. Could you provide Council with the estimated square footage of this building and site and the average square footage cost of construction of a similar building? Furthermore, who is responsible for any budget overrun, in other words, who is responsible for additional costs in the event that the construction of this building exceeds $450M?
5. Please provide an explanation on the funding sources to cover the debt on an annual allocation and explain how the funding sources can in fact be diverted to the arena project?
6. Who is responsible for the costs related to the LRT connectivity, transportation requirements and any additional infrastructure around the arena? If it is the City of Edmonton, are these costs over and above the $125M commitment of the City of Edmonton?
7. Based on the negotiated deal with the Katz Group, it would appear that the City of Edmonton is required to purchase the land for the arena. Will the purchase price be based on the same price that the Katz Group purchased for the land or will it be based on the value as of the date of purchase?
8. Please provide the estimated costs for the additional infrastructure in and around the arena, specifically the LRT connection, the purchase of the land, the pedway across 104 Avenue and any other infrastructure around the arena.
9. What commitment has the Katz group provided with respect to its promise to provide $100M in associated development regarding the Edmonton arena district lands? Specifically, does the Katz Group have the ability to not proceed with any type of development in the arena district if the market conditions are not favourable?
10. The Katz Group has committed to contribute $100M to the arena building project. Please explain how these funds will be paid to the City of Edmonton. Will the Katz Group simply provide the sum of $100M to the City of Edmonton or will there be conditions on that sum?
11. The Facility Improvement Fee amount will not be generated until after the arena is fully constructed and being used. Therefore, the project is short $125M. Which party (City of Edmonton or the Katz Group) is responsible for this shortfall now? If the City of Edmonton is responsible for this shortfall now, is it the arrangement with the Katz Group to have the Katz Group pay the City back, interest free and over time, from funds derived from the Facility Improvement Fee? Could you kindly explain the concept of this interest free loan to cover the $125M.
12. What is the expected amount in property and business taxes that would be generated by the arena itself and be the responsibility of the Katz Group?
13. What type of operating model the Katz Group is envisioning?
14. Is the community rink the responsibility of the City of Edmonton, specifically the development and construction of the community rink? Is the City of Edmonton responsible for paying for the construction of the community rink? If the answer is yes to these questions, then why is the Katz Group receiving all of the revenues from such an arena?
15. During the four-week period in which the City of Edmonton has the use of the arena for the CFR and Capital Ex and other community events, does the City of Edmonton get the arena at no cost?
16. A new term that came out of the discussions with the Katz Group is the non-compete clause with respect to Northlands. Who has the authority to accept a non-compete clause for Northlands? Is it the City of Edmonton or does Northlands have the final say on this issue? If in fact the non-compete clause is agreed to by the relevant parties, what does the future hold for Rexall Place? Is the only option demolition? What are the implications for Northlands with respect to a non-compete clause from a business perspective? Was Northlands consulted with respect to this new condition?
17. At the conclusion of the debate on May 18, 2011, City Council was left with the impression that all of the 17 conditions were satisfied and that there was no additional liability for the City. However, please advise which of the 17 conditions remain outstanding and unsatisfied.
18. When will the new CRL boundary come forward to Council for review and debate?
19. What are the timelines under which the City of Edmonton and the Katz Group are working under in order to meet the 2014 hockey season for the Edmonton Oilers? Is there a drop-dead date in which all things must be concluded in order to ensure the construction and completion of the arena by 2014? Given the urgency of this matter, I would ask that this report be prepared and placed on the next Council agenda immediately following the approval of the motion. As well, administration is directed that the report be made public.

Protecting the Public Interest: Arena Non Negotiables

During the January proposed downtown arena hearings, I questioned the City’s effectiveness as a negotiator that protects the public interests. It has instead become increasingly evident that the City has tied the fate of downtown revitalization to the arena project.

Supporters of the project would say it is using public assets and investment as an effective leverage for future revitalization efforts. If that were true, then those same public assets and investments should be fairly valued and offset with private sector collateral. To date, there is no offer other than that of the initial $100 million extended by Mr. Katz to Council last July. The City's investment in land and borrowing will undoubtedly exceed $500 million.

What is also an aspect of the negotiations is the future of Rexall Place. Evidence suggests that it would be difficult to run two competing facilities. With Rexall still being a viable and functional facility, it would seem narrow-minded to forfeit this asset in the interests of downtown development.

Furthermore, the losses to Northlands should be considered. Northlands, as a public entity serving the city of Edmonton, has a legacy of public/community investment dating back 100 years. If the public interest is to be served, the City should see collateral guarantees that offset the revenue losses associated with the Oilers receiving all operational revenue.

Finally the implications of the proposed Community Revitalization Levy must be properly understood. First, it should be recognized that City maintenance costs would exist within the new development area. One cannot suggest that taxes remain unaffected if maintenance costs in the area need to be covered by the general tax levy. Second, while the levy is proposed to raise approximately $125 million, the development timelines are extremely questionable. If delays occur, the CRL revenues may fall short of paying the debt. The City should therefore be pressing the Katz Group for guarantees that additional collateral will be available to ensure Edmontonians are not covering any shortfalls.

Reflections on the 2011 City Budget

When I voted against the city’s budget last Thursday, I didn’t do so lightly. I understand the importance of compromise and consensus when crafting a civic budget. This was my sixth budget since my election to council in 2004, and I have never before voted against one.

I expected my decision would prompt a reaction, and it has. Therefore, I’d like the opportunity to put that decision into context.

My vote has been misrepresented as a call to squeeze more money out of Edmonton taxpayers. This is patently untrue. My issue lies in the way we collect that money.

Since the 2005 budget, civic services have been cut by approximately $30 million. During that same period, council has made consecutive reductions in the assessment base while increasing its reliance on user fees, utility fees, and dividends (including those collected from sanitary drainage, EPCOR and the newly created Waste Utility). The city has also dipped into its savings to cover operating costs.

As a result, approximately half of our revenue now comes from discretionary sources (user fees/savings), rather than the much more stable source of taxes. This puts our city in a precarious position: if we ever see a drop in our utilities dividends and investments, we will be faced either with drastic cuts or huge tax increases to deal with the shortfall. At the same time, I feel it is philosophically dishonest to hide tax hikes in the guise of higher fees for city utilities and facilities.

My vote was also prompted by a matter of principle. The new budget creates a higher tier of fees for the new Terwilliger Recreation Centre, despite the fact that Edmonton’s citizens collectively invested $160 million in its construction. The city’s multipurpose facility pass will not allow people to use Terwilliger. In other words, many of the people who paid for the facility won’t be able to afford to use it. This two-tiered approach to accessibility and affordability for Edmonton’s municipal recreation facilities sets a bad precedent.

During the budget debate I supported or made numerous amendments, in an effort to reach a compromise that I could comfortably support. Ultimately, though, I felt the budget in its final form did not adequately protect Edmonton’s health and well-being.

I recognize that we face difficult economic and social times. However, to sustain our families and communities through these struggles, we must be prepared to carefully invest in good civic services, including such things as police, fire, public transit, roadways, parks and natural areas.

Edmontonians seem to get this. During the recent civic election campaign I spoke to thousands of people at doors and at forums, and not one of them demanded a cut in civic taxes.

Nobody—not even a city councilor—loves the idea of paying more taxes. But the alternative isn’t always wiser, or less expensive in the long run.

Engaging Seniors

This week has involved many discussions with senior citizens. They are always thoughtful, well informed and engaged on both issues and decisions Council has made. Consistently the issues of the LRT and City Center Airport are raised for discussion and clarification. Tonight is the Next Gen Forum @ Robbins Center @ 630 pm. It will be interesting to contrast and compare the perspectives of the under 30 generation with those I have heard this week!

Speaking Candidly on the Airport Issue

Recently, I made an independent motion that Council place a question on the civic election ballot regarding the future of the ECCA (Edmonton City Center Airport) which failed. I made this motion because I believe the sale of public assets the scale of Capital Power or ECCA should occur only with a clear mandate from citizens.

I believe Council did not seek direction on either decision, and I believe citizens will pay a price, through higher fees (to pay for power from a private third party) or through higher taxes to cover costs and lost revenues.

At the July 2009 hearing on the ECCA, I voted no to closure and yes to a Council approved plebiscite. I felt strongly that the original analysis and reports prepared for Council's consideration, were one-sided and only offered a perspective that supported closing the airport. I did not feel that Council was provided with a complete picture by City Administration, and I was left with unanswered concerns.

My first concern is around the financials associated with closure. Edmonton's municipal airport has historically been one of the most profitable airports in Canada; and the city has shared in its profits. In 1992 and 1995 there were plebiscites that approved the consolidation of scheduled air service at The International, while regional air service would continue at the municipal. Long term leases were signed—some for 52 years. Tenants invested in building and expanding hangers—all which become our liability and cost if closure occurs.

Another serious problem as I see it, is the issue of medevacs. At the time that the decision to close the ECCA was made, Administration committed to achieving a transition plan for medevacs before closure was initiated. This plan has never been provided to Council, and Runway 16-34 was closed in August despite this fact.

I strongly believe that a good democracy must be transparent in decision-making, and further to that, we must be supported by a bureaucracy that provides thoughtful and objective information. This was not the case in the ECAA question. From my perspective, the analysis provided to Council was not balanced as it did not project both the opportunities and risks associated with closing the facility.

Finally, is also important to clarify that Council never voted on the Envision petition. It was declared invalid by the Clerk and dismissed. And, it is important for my constituents to understand that my perspective is my own, and that I have no involvement with Envision.