EDMONTON — Edmonton city councillors have been told the proposed downtown arena project is now over budget.
Cost estimates for the arena are now sitting at $485 million, which is $35 million over the maximum price of $450 million set by the city.
The new figures come in despite cost-cutting efforts on the project, such as removing some food and beverage areas, the Oilers store, and changing to less expensive materials for the arena flooring and its exterior.
The city is to pay $125 million for the facility, with another $125 million coming from a ticket tax and Edmonton Oilers owner Darryl Katz putting up $100 million; leaving $100 million unaccounted for.
Coun. Kerry Diotte says this will shake the public’s confidence in the financial arrangement the city has made with the Katz Group.
Mayor Stephen Mandel, however, says he still thinks the project is in good shape.
“I think it just shows though that, with a reasonable balance, we can reach the number and still have a substantial contingency,” said Mandel. “So, I think it’s a pretty good news story, personally.
“Now, during the next six months, discussions will have to take place as to what you want to have in and what you don’t want to have in, what you’re going to have to give and what you’re going to have to take.”
The numbers will be on the city council meeting agenda next Tuesday. Council will then have to decide whether or not to proceed with the project.
“I believe that we need a new arena, but I’ve never been a fan of the funding formula,” said Diotte. “I think we should get a better deal.”
The Katz Group called the report “encouraging” and said its supports the idea the project “can deliver significant benefits to the entire city for many years to come.”
However, the Katz Group also noted that in order for the project to proceed, there must be agreement on an arena design and budget “that will support the level of investment we hope to make in downtown Edmonton ... we are also concerned about rising construction costs if the project is delayed.”