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Daryl Katz always idolized the Oilers, and paid $200-million for the team in 2008.

Three billion dollars will go far in helping former drugstore magnate Daryl Katz's decade-long push to refocus his business interests around hockey, real estate and Hollywood film production.

Famously publicity shy, Mr. Katz gave little in the way of specifics Wednesday about what he will do with the proceeds of the sale of Rexall Health to the United States-based McKesson Corp.

In a news release on Wednesday, the billionaire said going forward, his privately held Katz Group will continue to invest in its three other lines of business – real estate, sports and entertainment, and private and public investments.

But Mr. Katz, 54, has made no secret that his current focus is far away from the world of neighbourhood drugstores and Medicentres, and is laser-trained on the building of Canada's largest mixed-use sports and entertainment district.

"A city within a city," downtown Edmonton's Ice District will be anchored by an arena project for his beloved Oilers, and will include office towers, a luxury hotel, about 1,000 condos and apartments, cinemas and other commercial developments. There will be a community rink, a winter garden connected to the arena and plans include a new light-rail transit (LRT) stop.

The price tag will be hefty, even for someone of Mr. Katz's considerable means. The development is a joint project with WAM Development Group, but Mr. Katz holds a 90-per-cent stake. The first 25-acre phases of the project will cost $2.5-billion, but the final tally, once the planned second phase is built, could reach $6-billion. The budget for the steel-topped arena itself – being jointly funded by the city, and set to open this fall – is $606.5-million.

"There's a change in the focus of his business operations, now that he's become heavily involved in the real estate development and entertainment component in and around a new arena development here," says Dan Mason, a University of Alberta professor of sport management, who consulted for the city on the arena project.

"There's a new landscape for the operations of professional sport franchises, and in many respects, they're seen as a piece of a bigger puzzle," he said.

Mr. Katz was born into an entrepreneurial family – his father owned a large drugstore in Edmonton's north end when he was a toddler. He cut his teeth playing competitive tennis as a teenager and winning the Alberta franchise rights for Yogen Fruz as a young lawyer, but he made his mark when he took his father's drugstore business and turned it into a business empire.

But he always idolized the Oilers, and paid $200-million for the team in 2008. Even then, Mr. Katz was envisioning a grand project in the city that loves its shopping and movies almost as much as the Oilers. Mr. Katz's purchase of the team was followed by five years of wrangling with Edmonton's city council to come to a funding agreement for the Rogers Place arena – Edmonton taxpayers will pick up $279-million of the tab, and a significant ticket surcharge will also help bankroll the project.

But Mr. Katz signalled last year that his interests extend beyond hockey. A resident of Palm Springs during the winter months, it was the California warmth that brought him in contact with Joel Silver – the long-time Hollywood producer behind the Matrix and Lethal Weapon franchises. Last April, they announced they were teaming up to form Silver Pictures Entertainment, a company that will develop, produce and provide or arrange financing for its own slate of feature films, television and digital projects.

"Silver Pictures is an important part of the vision and breadth of our growing sports and entertainment business," Mr. Katz said at the time.

In Edmonton, construction on the Ice District has been proceeding on schedule, but there are challenges ahead for Mr. Katz, who has tied much of his future to the fortunes of his hometown. Two years ago, he trumpeted the Ice District development as being inextricably linked to the oil-focused Alberta economy – and pointed to $284-billion in investment planned for the oil sands by 2035.

But the dramatic crude price drop since mid-2014 and a slowdown in oil sands growth is likely to have a cooling effect on the demand for commercial and residential space in downtown Edmonton.

"In the short term, there's going to be some pain there," Prof. Mason said.

Follow Kelly Cryderman on Twitter: @KellyCrydermanOpens in a new window

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