Forget Vegas. Albertans will come here to play instead.
Multinational companies will consider setting up their headquarters.
Everyone from career-minded university graduates to well-off retirees will want to relocate, even NHL players.
It’s the ambitious vision of billionaire Daryl Katz. He’s standing in Katz Group’s head office, looking at a bunch of parking lots in downtown Edmonton. A stubby Greyhound terminal is one parking lot over. The view looks like how outsiders imagine Alberta’s capital city.
But Mr. Katz, the pharmacy magnate who owns the Edmonton Oilers, and Darren Durstling, chief executive of Alberta real-estate concern WAM Development Group, are revitalizing the city’s downtown core with a glitzy $2.6-billion, 10-hectare redevelopment.
A new arena built of stainless steel and glass for the Oilers will be the showpiece of the project, dubbed the Edmonton Arena District. Office towers, condos, and a plaza with restaurants and shops will be steps away. The colour-coded blueprints call for everything city-dwellers need, from doctors’ offices to movie theatres and a casino. A luxury hotel is on its way, with fancy residential suites on top.
“You have to understand, this is all parking lots. There was nothing here when we said we’re going to put the arena here and build all this stuff,” Mr. Katz said as he pointed to where new buildings will go. “It was just dead land.”
But he believes it will liven up.
“It is our hope that people from the north [in Alberta], instead of going to Las Vegas for the weekend, they’ll decide to come into Edmonton,” Mr. Katz said. “Stay at the hotel, go to an Oilers game, be at the casino, see some movies.”
The development is one part dream, one part reality. The Oilers’ new home, Rogers Place, will anchor the development. The arena is taking shape – the $606-million project is under construction, with the second level concourse already visible. The doors will open in 2016. A new light rail transit stop is being built just a stone’s throw away.
Stantec Inc., the international engineering and design firm with its roots in Edmonton, this week signed a deal to lease space in a $500-million tower in the new district. The City of Edmonton agreed to lease space in a $280-million tower. An area called “Block K” will host a $100-million complex housing a casino and head offices for the Katz Group and the Oilers. A hotel deal will be announced soon, Mr. Katz and Mr. Dursting said.
“They are absolutely trophy assets,” Mr. Katz said. All told, the developers expect to spend $2.6-billion building the project’s first phase. They locked in maximum price contracts for some parts of the development including the arena to avoid blowing the budget as they compete in a heated construction market in Western Canada.
Katz Group and WAM are joint venture partners in the development, with Katz Group, chaired by Edmonton-born Mr. Katz, holding a 90-per-cent stake and WAM controlling the remaining 10 per cent.
“We’re looking for higher rents than probably what you’ve seen in the rest of the city,” Mr. Durstling said, declining to be specific. “We’re getting them.”
Investors hoping the developers will sell assets to others, such as a real estate investment trust, will be disappointed. Mr. Katz, who said the idea to develop the district was a key factor in his decision to purchase the Oilers in 2008, said he’s holding on.
Edmonton mayor Don Iveson notes the city’s “urban shift” extends beyond the Edmonton Arena District. The new $340.5-million Royal Alberta Museum is under construction. New light rail stops are on their way connecting the city. But, still, the EAD is the crown jewel.
“This is one of our more notorious downtown parking lots, which we are thrilled to see be replaced by good underground parking, great street main-floor retail and public plaza space, and really extraordinary, soaring architecture,” Mr. Iveson said in an interview. “That’s a huge turnover just in terms of a sense of place and a sense of excitement about the core of our city.”
Mr. Katz and Mr. Durstling are counting on Alberta’s prosperity to make their joint venture work. They rattle off the billions of dollars energy companies are spending in the province. Oil sands, pipelines, refineries – they are counting on them all to keep the province flush and the population rising.
Mr. Katz does not like to talk hockey when he’s talking condos and concerts, but the development is about his hockey team, too. Pitch packages to NHL free agents include clips from the development’s DVD presentation, he said.
But first, he must lure Albertans.
“The point behind all of this is to build a development people want to live in,” Mr. Katz, dressed casually in all black with leather-looking accents on his vest, told reporters Thursday. “If this doesn’t bring people downtown to live, we’ve failed.”