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Quebec City's dream of an arena a step closer Add to ...

There are pending lawsuits, there is political opposition, but still Quebec City Mayor Régis Labeaume makes inexorable progress toward breaking ground on a new NHL-ready arena for the city.

The latest development: the municipal and regional councils have approved the arena management contract and leases inked last week after secret last-minute haggling between Mr. Labeaume, city hall lawyers and the Quebecor media conglomerate.

When a draft agreement was reached last spring, Quebecor chief executive Pierre Karl Péladeau set Sept. 7 as the deadline to conclude the final pact – it is now in hand, subject to the National Assembly passing a controversial private member’s bill that insulates the arrangement from a legal challenge.

It’s expected the legislation will be passed this fall.

Clearly elated at making the complex 25-year lease agreement official, Mr. Labeaume said at a Quebec City news conference on Tuesday that “the dream is coming true … it was like jamming a square into a circle, but we reached all our objectives.”

The $400-million arena project is not without its critics, but Mr. Labeaume claimed the final contract is even more beneficial for taxpayers than the agreement-in-principle the parties hammered out last March.

It contains a provision that allows the city to scrutinize Quebecor’s financial receipts as they pertain to the building, and some beefed-up clauses to keep a future NHL team in the building for the duration of the lease.

“If Quebecor, and this is a hypothesis I don’t believe in, were to obtain a National Hockey League team and sell it or move it in 10 years, they will still have to pay rent for 15 years. And that’s important to retain the club. It’s an incentive not to leave,” Mr. Labeaume said. Quebecor also won a concession in the final negotiations: If the company is unsuccessful in obtaining an NHL franchise, it will pay a lower price for the naming rights – which could top out around $64-million – to the proposed 18,000-seat building,.

The lease also builds different rent schedules into the agreement, one if there is a hockey franchise, and another, lower rate scale if Quebecor doesn’t manage to attract a team.

Over the life of the deal, the media conglomerate will pay between $110-million and $200-million in rent, profit-sharing and naming rights.

In return, Quebecor will have exclusive rights to stage concert events and hockey, and to make its own arrangements for ancillary revenues like concessions and beer sales. The city reserves the right to cancel the arena project, which is to be financed jointly by the city and the province, should a detailed cost study make the price tag prohibitive.

Just because the contracts have been signed and ratified doesn’t mean everyone is pleased with Mr. Labeaume.

A trio of independent city councillors voted against the contract, and two angry suburban mayors denounced the secrecy surrounding the deal – although they hold a minority of seats on the regional council and couldn’t block its adoption.

There is opposition on other fronts, as well, so it’s no sure thing that the project will be completed by the projected September 2015 opening date.

Former city manager Denis de Belleval is spearheading a lawsuit that seeks to quash the deal because it allegedly violates provincial law and city tendering regulations.

“All of this looks like a firm contract, but in fact it is as soft as Jell-O,” Mr. De Belleval told The Canadian Press.

Follow on Twitter: @MrSeanGordon

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