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    The Northlands ArenaStrategy Committee

    FinaApril 15, 2015Summary Findings & Recommendations

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    Summary Findings & Recommendations

    The Northlands ArenaStrategy Committee

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    This report summarizes the work of the Northlands Arena Strategic Committee

    (NASC) and is provided for the consideration of the Northlands Board of Directorsas per the committee terms of reference and authorities provided to it by theNorthlands Board of Directors.

    It is important to note that in the spirit of transparency this report is provided forpublic review concurrent to being delivered to the Northlands Board of Directors.

    Any further action or outcomes related to this report and the future useof Northlands arena (Rexall Place) or developments on the Northlandscampus will be the governance responsibility of the Northlands Boardof Directors in collaboration with the City of Edmonton, neighbouringcommunity, and other stakeholders.

    Prologue

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    Throughout the document references are made to a number

    of different organizations and groups.

    Key Terms & Denitions

    Please note the following denitions:

    Edmonton Northlands (Northlands): Northlands is a not-for-prot,volunteer organization in Edmonton, Alberta. It was founded in 1879,before the ofcial incorporation of the City of Edmonton or theProvince of Alberta.

    Northlands Board of Directors: The group of individuals elected orappointed by Northlands shareholders to provide governance andoperating oversight to the entire Northlands organization.

    Northlands Board of Governors: The group of individuals representing pastpresidents and Board of Directors chairs of Northlands in place to provideinsight and historical reference to the Northlands Board of Directors.

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    Northlands Arena Strategy Committee (NASC): The NASC is a committee

    struck by the Northlands Board of Directors that is responsible for deliveringthis report. Representation includes members of the Northlands Boardof Directors as well as leaders in the community representing a variety ofperspectives. The NASC was further broken down into three Subcommittees:

    1. Exploration—The Exploration Subcommittee was responsiblefor identifying and assessing viable opportunities by gatheringinformation on other areas in North America that have developednew arena facilities and introduced multiple large arena venuesinto a single market. As well, a review of mixed-use developmentmodels and repurposing of performance venues was conducted.The Exploration Subcommittee met with owners, operators,consultants, and staff at the various venues to ensure a

    multifaceted perspective was gathered.2. Engagement—The Engagement Subcommittee was responsible

    for collaborating with internal and external stakeholders to gatherand assess community input. Engaging the general public, internalstaff and volunteers, key community stakeholders, and residents ofthe immediate area around the site were all areas of focus for theEngagement Subcommittee.

    3. Finance—The Finance Subcommittee was tasked to developthe nancial implications of future Northlands arena (RexallPlace) models based on data provided by the Engagement andExploration Subcommittees. Although the scope of the NASCwas only around the future of the arena facility, the impacts ofchanging the use of the Northlands arena (Rexall Place) to theoverall Northlands organization also needed to be measured.

    Key Terms & Denitions

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    Key Terms & Denitions

    Northlands shareholders: The Northlands organization currently has 339

    of a potential 1,500 shareholders. Over the next 5 years, there is a strategyin place to ll all 1,500. The Northlands Board of Directors is accountableto the shareholders, and the shareholders elect from within the currentmembership the 12 elected positions on the Northlands Board of Directors.

    Northlands volunteers: Northlands hosts and convenes a broad varietyof events and activities. In order to do this a large cadre of volunteers areneeded. Northlands has over 1,100 volunteers who are actively involved inevent facilitation and other community endeavours. Some volunteers arealso Northlands shareholders.

    Northlands arena: The major sports and entertainment venue located at75 Street and 118 Avenue in Edmonton currently operating as Rexall Place.

    The City of Edmonton (the City): The City of Edmonton is a municipalcorporation that is governed by City Council. The City owns the land onwhich the Northlands arena (Rexall Place) sits as well as all land on whichNorthlands operates. In addition the City has an agreement with the KatzGroup Canada that led to the development of the new downtown arena(Rogers Place).

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    Key Terms & Denitions

    The Edmonton Arena District (EAD): This refers to the area around which

    the new downtown arena (Rogers Place) will operate. Elements includea “Winter Garden” and various entertainment and food establishments.The EAD will span across 104 Avenue. It is intended to serve as adestination for visitors that will result in visitation to the area beyond theconnes of the events within the new downtown arena (Rogers Place).

    The new downtown arena (Rogers Place): The new downtown major sportsand entertainment venue being developed in the Edmonton Arena Districtat 102 Street and 104 Avenue. This will be a world class facility that willserve as home to the Edmonton Oilers and will serve as a signicantentertainment center hosting concerts and events beyond sporting events.

    Katz Group Canada (KGC): Privately owned, the Katz Group includesoperations in pharmacy, sport & entertainment and real estate sectors.The Katz Group is based in Edmonton. Associated entities include theOilers Entertainment Group (OEG).

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    Over the past six months, a dedicated group of community leaders have

    volunteered their time, knowledge, and expertise to provide advice to theNorthlands Board of Directors regarding the future of the Northlands arena(Rexall Place) once the new downtown arena (Rogers Place) opens in late 2016.The Northlands Board of Directors should be commended for its visionaryapproach to resolving the Northlands arena (Rexall Place) challenge byempowering a group of external community leaders to provide independentrecommendations and advice.

    Members of the Northlands Arena Strategy Committee (NASC) havevolunteered thousands of hours to identify, research, and evaluate options andscenarios related to the Northlands arena (Rexall Place) and the associated site.Although the NASC was originally tasked with assessing Northlands arena(Rexall Place), the group quickly realized that evaluating the facility in isolation

    of the entire 160 acre Northlands campus would deliver an outcome thatlacked diligence and offered little benet to Northlands, the neighbouringcommunity, and the City of Edmonton.

    The NASC was formulated to include a diverse mix of perspectives,backgrounds, and areas of expertise. As the committee chair, my role wasto leverage the tremendous expertise of the committee members. TheNASC included elected representatives from all three levels of government(municipal, provincial, federal), the Northlands Board of Directors (includingthe Board Chair), the business community, and a number of signicantinstitutions and organizations in the city and region. Three Subcommitteeswere also formed: Exploration, Engagement, and Finance to work on specictasks and focus areas.

    A commitment was made to deliver a public report outlining the ndings ofthe NASC by April 15th, 2015 and with the support of the Northlands Board ofDirectors and administration and a committed group of volunteer communityleaders this deadline was achieved. As chair of the committee I want to providea summary with some direct comments, ndings, and recommendations.This detailed report is intended to provide the Northlands Board of Directorsthe information they will need to make a nal decision and I am condent thatthe NASC achieved great success in moving the Northlands arena (Rexall Place)discussion from a blank canvas of possibilities to two nal recommended optionsfor the consideration of the Northlands Board of Directors.

    A Message from Andrew Ross, Chair Northlands Arena Strategy Committee

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    I would also like to send a special thank you to all of the committee members,staff, venue hosts, and consultants who assisted us in this incredibly importantprocess. The progress the NASC has achieved in a short period of time simplycould not have been possible without exceptional support, dedication, and

    a genuine interest by others in sharing knowledge. Ultimately, the NASCunderstands that the Northlands Board of Directors will have to make adecision and set the strategic direction for the organization and its facilitiesand site; we also believe our ndings provide supporting documentation andcontext for our recommended course of action.

    The NASC worked collaboratively and while we did not always agree werespectfully debated to nd the right solutions; this nal report has achievedconsensus of the group. An unintended outcome developed throughoutthis process is the signicant progress made to repair previously strainedrelationships between members of the Northlands Board of Directors and keystakeholders at the City of Edmonton and the Oilers Entertainment Group (OEG).Special thanks goes to Tim Reid, President and Chief Executive Ofcer of

    Northlands; Bob Nicholson, Vice Chairman of the OEG; Simon Farbrother,City Manager; and Mayor Don Iveson who have been willing to take a forwardlooking approach in the best interest of our city and the sustainability of theNorthlands organization.

    The following is a brief summary of our key learnings:

    • Competing with the downtown arena (Rogers Place) would be a losingscenario for all parties. It is a possible option and would in fact generateincome for Northlands over the short term but ultimately all majorstakeholders (i.e. Northlands, the City of Edmonton and the OilersEntertainment Group) will lose as competition will result in a reduction tooverall net economic and community benet. This competitive approach

    has been taken in other North American cities with limited (or no) success.• An alternative option reviewed for the facility was decommissioning or

    going dark. This could mean completely shutting down Northlands arena(Rexall Place); alternatively it could refer to closing the facility for all buta few events per year. This option is not tenable. This approach wouldserve to attract undesirable activity to the site and will likely create safetyconcerns. The neighbouring community has been working hard inits revitalization efforts and this option could set back those efforts.This option is potentially the worst option for the community and our city.

    • Activating the site is critical, particularly in consideration of thesurrounding community. There are several options that will lead to thishappening. The Northlands Board of Directors in conjunction with the City

    of Edmonton and/or development industry can continue to bring positiveeconomic and social impact to Northlands, the surrounding community,and the city through the implementation of one of several options thatfacilitate positive, meaningful trafc to the Northlands campus.

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    • Through site activation, positive cash ow can continue to begenerated. There is a need to begin to think of Northlands as a 160acre campus similar to the programing experiences at the PacicNational Exhibition or the Canadian National Exhibition (both

    discussed herein). The integration of existing assets and the strategicassembly of future buildings and activities will be critical to the longterm success of Northlands. Northlands does not have the nancialresources to repurpose Northlands arena (Rexall Place) or to demolishit; the building still has reasonable useful life remaining and the citizensof Edmonton are passionate about maintaining the building thus thereare two avenues to review.

    » The rst avenue is to consider a collaborative approach that wouldinvolve all stakeholders but begin with the Oilers EntertainmentGroup and the City of Edmonton. Northlands arena (Rexall Place)must become a complimentary venue to the currently underconstruction downtown arena (Rogers Place). This can be achieved

    by developing an operating agreement that clearly denes the rolesof each venue for the nancial and social benet of both facilityoperators and the City of Edmonton. This collaborative approach hasthree potential options as recommended by the NASC:

     – The rst option is to nd a partner (or group of partners) tocontinue to drive meaningful activity to the Northlands arena(Rexall Place) site while sustaining the Northlands organization,creating value for the surrounding community and the city andavoiding competition with the downtown arena (Rogers Place).Thus a collaborative model with the City of Edmonton andthe Oilers Entertainment Group would be desired. The intentwould be to use both the Northlands arena (Rexall Place)and the downtown arena (Rogers Place) to attract sports and

    entertainment to Edmonton and leverage both facilities for thebenet of citizens throughout northern Alberta while increasingeconomic activity for the region. An example of this scenariowould be to ensure that events such as Canadian Finals Rodeocould occur simultaneously with major concerts in the samemarketplace.

    – The second option is to nd a partner (or groups of partners) toreactivate the Northlands arena (Rexall Place) site to ensure futurecash ow for Northlands, positive activity in the surroundingcommunity, and additional benet for the city. Some optionsof reactivation include: repurposing the facility as a communityrecreation center, reducing the scale of the operation for smaller

    events (e.g. dirt events, smaller concerts, family events), or usingthe space to expand conference and trade show capacity in theCity of Edmonton. The long-term benet to these scenarios forthe City of Edmonton is that there would be two major facilitiesfor event hosting pursuits and long term planning. The advantagefor Northlands is that this approach enables the retention ofstaff, overall sustainability, and continued economic and programcontributions to the community.

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     » Finally, if agreements cannot be reached regarding theaforementioned scenarios, Northlands would either have to workwith the City (as the land owner) or partner with a developer todemolish the facility and potentially redevelop the site. Should

    demolition need to occur, we cannot emphasize enough how crucialimmediate redevelopment of the site would be to the surroundingcommunity. It is also important to note that failing to establish anagreement and redevelopment plan with the City of Edmonton orother partners would result in Northlands having to relinquish thefacility and site to the City for some type of future use without theinvolvement of the Northlands organization.

    Regardless of the decision on the future of the Northlands arena (RexallPlace) the NASC feels obliged to share its perspective specic to a greaterNorthlands vision. The following statements and recommendations arespecic with intent and should be considered as collective summarystatements from the NASC following six months of learning. These summary

    statements are intended to enable Northlands to be nimble and make quickdecisions in an environment where time is of the essence. Most importantly,these summary statements should be considered as the Northlands Board ofDirectors looks to reimagine the future of the organization.

    • Northlands must look at activating more of the entire 160 acre campusand should be exible and creative in its thinking. The NASC hasgenerated some concepts for the Northlands arena (Rexall Place) andsite which have not been fully explored in terms of compliance and/or land use but believe that a strategic plan for Northlands must becompleted in conjunction with a master plan for the region. Due toNorthlands’ nancial position, this will require innovative developmentactivities that would most likely require collaboration with the City of

    Edmonton and private developers.• Northlands must establish other revenue generating activities in light

    of the traditional business model for the Northlands arena (Rexall Place)being compromised. Relying on the Northlands arena (Rexall Place) todrive protability and achieve social good will no longer be acceptableas the loss of earnings with the introduction of the new downtown arena(Rogers Place) could lead to an approximate average of $7.5 millionannually based on historical performance. The other business unitsoperating in the Northlands portfolio typically run an annual decitwhich is covered by the surplus generated by the Northlands arena(Rexall Place). This decit also account for any community investmentmade by the organization in any given year and the social goodgenerated by the events and activities hosted at the Northlands campus.

    Failure to improve business operations across Northlands will renderthe organization unsustainable and will compromise the social goodit delivers in the city and region. We believe there are many ways toincrease revenue and protability but the Northlands Board of Directors,the City of Edmonton, and potential third parties will need to create avisionary plan.

    • The Northlands Board of Directors and administration must be exibleand able to negotiate with future partners to achieve positive solutions.The greatest risk to the organization is the narrowing window of time tond a viable solution that delivers meaningful benets to Edmontoniansand positive nancial contribution for the sustainability of Northlands.The Northlands Board of Directors should remain as a governance board,

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    set strategic direction, ask good questions, stringently review the overallorganizational business model, and support administration when requested.

    • Northlands must become more agile if it is to nd a viable solution forthe future. Relationships are critical to a successful outcome. There aremany compromised and/or broken relationships between shareholdersand the Northlands Board of Directors, stakeholders, management, andkey partners. The emotion inherent in the current context cannot cloudthe need to achieve the best possible outcome for the sustainability ofNorthlands and the betterment of the city. It is our recommendationthat the relationships built through this process be leveraged to drive asuccessful outcome. Through this process, Northlands has been able tobuild relationships with the City of Edmonton, the Oilers EntertainmentGroup, and various other community leaders. The Northlands Boardof Directors is positioned to bolster these relationships by providingadministration with a refreshed, visionary mandate; supportingadministration when requested, and reviewing and evaluating the

    strategic direction it sets on an ongoing basis. The Northlands Board ofDirectors also needs to hold administration accountable to deliver onstrategic directions set forth.

    • The Northlands Board of Directors and administration need to movequickly and be vigilant in their commitment to redening a path forwardas the timelines for the opening of the downtown arena (Rogers Place)are xed and will immediately create an unsustainable business modelfor Northlands. The Northlands Board of Directors must realize thata strong opportunity does exist to redene the leadership role ofNorthlands in the City of Edmonton, however if a plan cannot beimplemented that generates positive cash ow to offset the loss ofthe Northlands arena (Rexall Place) the organization will be left in avulnerable position.

    In closing, it is imperative that all involved or interested in this processunderstand that the reality of a new and world-class arena and district in theheart of Edmonton will bring our city great opportunity, growth, and change.This opportunity has had a dramatic impact on the viability of the existingNorthlands business model. There is a need to develop a clear vision notonly for Northlands but the local community and broader northeast quadrantof Edmonton. Just as the new downtown arena (Rogers Place) has acted asa catalyst for change in the downtown core, the potential of Northlands todrive revitalization in the local area is an opportunity that our community canill afford to ignore.

    The one clear nding that this process has led me to appreciate is that the worst

    decision we can make for Northlands and Edmonton is to do nothing at all.

     Andrew RossChair of the Northlands Arena StrategyCommittee and member of theNorthlands Board of Directors

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    Table of Contents

    Section

    Section

    1: Introduction & Methodology 1

      An Overview of Northlands 3

      The Northlands Campus 5

      Northlands Financials 8

      The Northlands Arena (Rexall Place) Operations 12

      Planning Context 13

      Planning Stakeholders 20

      The City of Edmonton 20

      The Province of Alberta 21

    2: Potential Options 22

      Model #1: Compete 23

      Model #2: Reduce Scale 23

      Model #3: Repurpose 24

      Model #4: Decommission 24

      Model #5: Demolition 25

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    Section

    Table of Contents

    3: Research Findings 26

      Exploration Subcommittee Findings 26

      Kansas City, Missouri (Sprint Center) 27

      Kansas City, Missouri (Kemper Arena) 27

      Kansas City, Kansas (Sporting KC Park) 28

      Columbus, Ohio (the Columbus Arena District) 29

      Ottawa, Ontario (Landsdowne Park/TD Place Stadium) 30

      Toronto, Ontario(Mattamy Athletic Centre formerly Maple Leaf Gardens) 31

      Toronto, Ontario (Ricoh Coliseum) 32

      Toronto, Ontario (Exhibition Place) 32

      Vancouver, British Columbia(Pacic Coliseum/Pacic National Exhibition) 34

      Vancouver, British Columbia (Richmond Oval) 34

      Engagement Subcommittee Findings 35

      Public Web Survey 36

      Information/Discussion Sessions 37  Key Stakeholder Conversations 39

      Finance Subcommittee Findings 40

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    Table of Contents

    4: Analysis 44

      Decision Making Process 46

    5: Recommendations: The Northlands Arena 47

    6: Recommendations: The Northlands Organization 49

    7: Summary & Next Steps 51

      Appendices

      Appendix A: NASC Terms of Reference 53

      Appendix B: NASC Membership 58

      Appendix C: State of Replaced NHL Venues 59

      Appendix D: Exploration Brieng Packages 65

      Appendix E: NASC Timelines & Communications 81

      Appendix F: NASC Media Coverage 83

      Appendix G: Public Web Survey Report 85

      Appendix H: City Council NASC Process Presentation(February 19th, 2015) 109

      Appendix I: Rexall Place Building Condition Assessment 121

    Section

    Section

    Section

    Section

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    Introduction & Methodology

    Northlands has been an integral part of the Edmonton community for over 137years. Over its storied past, the not-for-prot agricultural society has operatedfacilities, offered programs, and hosted special events that have enhancedresident quality of life and built the brand and image of the city and broadernorthern Alberta landscape.

    The Northlands arena (Rexall Place), currently operating under the Rexall Placemoniker, has been a key component of the Northlands business model and acontributor of both nancial resources to the organization as well as social good

    in the community since 1974. Northlands arena (Rexall Place) is currently the singlelargest prot center for Northlands generating a three-year average of $7.5 millionin annual net surplus (2011 – 2013). With the nal direction of Edmonton CityCouncil on July 3rd, 2013 to modernize the sport and entertainment experiencewithin the City of Edmonton by investing in the new downtown arena (RogersPlace) and the Edmonton Arena District (EAD), the existing business model forNorthlands is no longer viable and must be redened.

    When the construction of a new downtown arena (Rogers Place) was originallyannounced in June of 2012, a plan for the existing Northlands arena (Rexall Place)was not established and remains currently undened. The issues surroundingthe future of Northlands and the Northlands arena (Rexall Place) are notonly of concern to the Northlands organization but also have implications to

    the City of Edmonton. City Council has made motions in the past to directadministration to work with Northlands to explore a range of scenarios toensure the sustainability of Northlands and explore the future of the City-owned Northlands arena (Rexall Place) site.

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    Background &Overview 

    An Overview of Northlands

    The Northlands Campus

    Northlands Financials

    The Northlands Arena(Rexall Place) Operations

    Planning Context

    Planning Stakeholders

    PotentialModels

    Model #1: Compete

    Model #2: Reduce Scale

    Model #3: Repurpose

    Model #4: Decommission

    Model #5: Demolition

    ResearchFindings

    ExplorationSubcommittee Findings

    EngagementSubcommittee Findings

    FinanceSubcommittee Findings

     Analysis

    Decision Making Process

    Recommendations

    The Northlands Arena

    Recommendations

    The NorthlandsOrganization

    Summary &Next Steps

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    THE NORTHLANDS ARENA STRATEGY COMMITTEE

    Summary Findings & Recommendations

    On October 16th, 2014 the Northlands Board of Directorsstruck the Northlands Arena Strategy Committee (NASC),comprised of community leaders from throughout theCity of Edmonton and beyond to provide advice on the

    future of Northlands arena (Rexall Place). The followingreport outlines the process, research, and ndings of theNASC as well as recommendations for the considerationof the Northlands Board of Directors as they look toplan the future of the Northlands arena (Rexall Place).This document is provided for public information andthe use of the Northlands Board of Directors as theyfeel appropriate. The following graphic explains how thereport is presented.

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     An Overviewof NorthlandsNorthlands was founded as an agricultural society in1879 making it the oldest agricultural society in Alberta.The agricultural status of Northlands is deeply rootedwithin the history of the organization and provides anopportunity to secure signicant annual provincial grantfunding to support and promote the advancement,education, and development of the agricultural sector.

    Northlands programs and site features facilitate agriculturalinterpretation, education, and exposure. The developmentand support for agriculture extends beyond the Northlandscampus into the community through its partnership with

    4-H Alberta, support of local producers, and its relationshipwith agriculture schools and faculties within the province’scolleges and universities. Through endowments establishedin the early 1980s by Northlands, over $40,000 in scholarships,awards, and bursaries is annually distributed to deserving post-secondary students at eleven colleges and universities in Alberta.

    Northlands is committed to the development of youngagriculture leaders both on the farm and in the classroom.Northlands receives annual grant funding to support theresearch, development, promotion, education, awareness,and support of Alberta Agriculture via the Ministry ofAgriculture and Rural Development. Northlands receives

    grant revenue specic to the delivery of horse racing atNorthlands Park Racetrack although these funds mustbe solely directed to the delivery of racing. It should benoted that in the late stages of this planning processthe risk associated with a dependency on provincialgrant funding became evident as Northlands receiveda reduction in its agricultural grant funding from $9.3Mannually to $7.3 million annually in conjunction with therevised provincial budget.

    Northlands has helped innumerable groups and eventsprosper through community investment and has providedunique and valuable infrastructure that is accessed by

    stakeholders throughout Alberta and beyond. Northlands hashelped Edmonton become established as a host communityfor national and international events and has created awelcoming image and atmosphere for new events andactivities to occur.

    Northlands 160 acre site sets the scene for hosting the bestin concerts, professional sports, trade shows, horse racing,and gaming. Northlands three venues: Northlands arena(Rexall Place), the Edmonton EXPO Centre and NorthlandsPark Racetrack & Casino serve as the destination for world-class entertainment and excitement in Edmonton andnorthern Alberta.

    As a provincial not-for-prot agricultural society

    Northlands is able to support more than 80 charitableorganizations, contributing over $1 million annually tosupport the development and enhancement of othernot-for-prot agencies that share similar values and adedication to both Edmonton and northern Alberta.Northlands currently represents one of Edmonton’s oldestand largest social enterprises making corporate decisionswith a blended approach of entrepreneurial spirit andsocial good.

    Northlands partners and collaborates with surroundingcommunity leagues and neighbourhood organizationsto support the vibrancy of nor theast Edmonton.

    Through the Northlands Neighbours grant program,local projects, programs, and events are providedmatching seed funding to ensure the successful launchor implementation of community based projects.

    Northlands has 1,700 full and part-time staff combiningfor an annual salary expense in 2014 of $35.2 million and isa signicant employer within the region. A unique aspectof the Northlands employment model is the inclusiveand blended approach the organization implementsto servicing operations with a large employee baseand a dedicated volunteer community of over 1,100volunteers. The depth, diversity, and dedication of

    Northlands volunteers is a unique benet of the currentbusiness model and contributes to a leading culture ofcommunity service. Northlands volunteers contributed20,981 hours of service in 2014.

    Northlands has a complex governance structurethat supports the operations and strategic directionof the organization. Northlands has maintained acommitment to its roots with the Northlands Boardof Governors (comprised of former organizationalleaders who provide support to the Northlands Boardof Directors and administration) and a volunteer basewith direct access to corporate history and community

    connectedness. The Northlands Board of Governorsis comprised of 19 past presidents, past board chairs,and organizational leaders. The strategic direction forNorthlands and operational oversight is a responsibilityof the Northlands Board of Directors who form a 19member group that represent the shareholder base,neighbouring community, municipal, provincial andfederal governments, and the Northlands Board ofGovernors. The Northlands Board of Directors has theability to seek unique and needed skill sets from thecommunity. If an elected position becomes vacant, theNorthlands Board of Directors may appoint someoneto ll that vacancy pursuant to Ar ticle 53 of the Articles

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    of Association. Article 54 of the Articles of Associationalso allows the Northlands Board of Directors to appointup to three additional people. When read in conjunctionwith Section 2.1 of the 2009 Amending Agreement

    between Northlands and the City of Edmonton, itis claried that those three Article 54 positions shallbe jointly appointed by Northlands and the City ofEdmonton. Further, one of those appointees shall be aresident of a community adjacent to the Northlands site.

    The Northlands Board of Directors is elected or appointedby the shareholder base comprised of individuals livingwithin northern Alberta. Recently, Northlands hasimplemented an aggressive recruitment campaign tomodernize and grow the shareholder base from thepreviously capped number of 300 to the recently revisedshareholder potential capacity of 1,500. Shareholders

    are approved by the Northlands Board of Directorsand pre-qualied via the Governance Subcommittee.Currently there are 339 shareholders of the Northlandsorganization. Northlands anticipates fully populating the1,500 shareholder capacity by 2022.

    The staff and volunteers support not only Northlandsevents and programs but are part of the larger Edmontoncommunity volunteering their time to assist local festivals,community programs, and charitable organizations.The Northlands Day of Sharing project has seen over240 full-time Northlands staff lend a day of volunteersupport to a charitable or not-for-prot organization of

    their choice. Northlands staff are also actively engagedin the community, annually supporting the Make-A-WishFoundation, building Christmas hampers for local families,or donating time and funds in support of the United Way.

    Northlands hosts ve signature community events:K-Days, Canadian Finals Rodeo, Farmfair International,Northlands Farm & Ranch Show and the CanadianDerby. These ve events attract over one million

    attendees annually1 and provide valuable opportunitiesfor charitable and not-for-prot partner organizations togenerate awareness and nancial support.

    Beyond these signature events, the 160 acre site is hometo over 550 other events per year and generates trafcof over 3 million visitors annually to the local area. Eventsand activities at the Northlands campus are estimated togenerate more than $1 billion in economic impact to theregion2. Northlands is currently in the special event, tradeshow and performance hosting business; a business thathas allowed it to thrive and generate both nancial andsocial return which has been invested signicantly back

    into the local economy and community.

    1 Total attendance at K-Days was 740,840 in 2014. Attendance atCanadian Finals Rodeo/Farmfair International was 181,565 in 2014.

    2 Economic Impact Assessment of Northlands Operations 2006,prepared by Stantec, December 2007 estimated Northlands’economic impact at $1,052,272,745.

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    The Northlands CampusThe Northlands campus encompasses 160 acres ofmulti-functional space and is directly accessible by

     Yellowhead Trail (Highway 16) and Wayne Gretzky Drive.The site is additionally served by the City’s Light RailTransit system (LRT). Amenities and facilities on thesite include:

    • Northlands arena (Rexall Place) with a seatingcapacity of approximately 18,500 for concertsand 16,877 for arena sports.

    • Edmonton EXPO Centre with 522,000 square feetof exible indoor exhibition and event space;including eight halls with capacity of over 50,000square feet, food court, and meeting rooms.

    • Northlands Park Racetrack with grandstand seatingfor 2,600 and 1,100 stabling stalls.

    • Northlands Park Casino with 550 slot andgaming machines.

    • 6,200 parking stalls on site.

    The Northlands site is located adjacent to, or in closeproximity to, a number of other major public spacesand facilities. The Northlands site is approximately 1kmfrom Commonwealth Stadium and the CommonwealthCommunity Recreation Centre. Trail and LRT linkagesexist between both facilities. The Northlands site also

    abuts Borden Park, one of the City’s largest multi-purposecommunity parks and green spaces.

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    The Northlands Arena (Rexall Place)

    The Northlands arena (Rexall Place) originally openedits doors in November, 1974 and has been home to

    hundreds of concerts, sporting events, family shows,and more. More than 1.6 million guests visit the venueannually. The facility currently covers a site footprint of166,883 square feet with total square footage for all sixlevels totaling 461,536. It has 16,877 xed seats withcapacity of 18,500. In Pollstar’s 2014 year-end ranking,Northlands arena (Rexall Place) was ranked as the thirdbusiest arena in Canada, 14th busiest in North Americaand 33rd busiest arena in the world.

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    Edmonton EXPO Centre

    With a $150 million expansion1 completed in 2010,the Edmonton EXPO Centre is now the largest venue

    of its kind west of Toronto. At 522,000 square feet,the Edmonton EXPO Centre welcomes more than1.4 million guests annually. In addition to hostingattractions, exhibits, cattle shows, and horse sales duringNorthlands signature events, the Edmonton EXPO Centreis the destination for large consumer and trade showsincluding the Alberta Gift Show, Edmonton RV EXPOand Sale, and the prestigious Edmonton Motor Show.The Edmonton EXPO Centre has eight exhibit halls,a conference center including a 16,000 square footballroom and multiple breakout rooms, a 17,000 squarefoot industrial kitchen, and six retail food outlets.

    1 Investment in the Edmonton EXPO Centre expansion was sourcedas follows:

      $50 million: Government of Alberta investment

      $60 million: Loan to Northlands from the City of Edmonton

      $25 million: Government of Canada investment

      + $15 million: Northlands investment

    $150 million

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    Northlands Park Racetrack & Casino

    Northlands has been bringing the best in horse racingto Edmonton fans since 1882. The venue provides world-

    class live and simulcast horse racing experiences.Open 363 days of the year, Northlands Park plays hostto more than 100 days of live harness and thoroughbredracing annually. The Canadian Derby continues to be oneof the venue’s most successful events and is the largestand most celebrated thoroughbred race day held inwestern Canada. Northlands Park also offers great diningareas including Uplinks Lounge and Colours Restaurant,the largest tiered restaurant in western Canada capableof seating more than 650 guests. With more than 2,600grandstand seats and 550 slot and gaming machines,Northlands Park Racetrack & Casino continues to be adestination in Edmonton. Although this component of

    the Northlands operation does receive considerableoperational grants these funds are for the sole purposeof horse racing.

    Northlands FinancialsAs per its audited 2014 Financial Statements, Northlandsaims to achieve an overall break-even annual budgetbalancing revenues with operational expenses, maintenance,capital investment, and community investment. The followingexcerpts from the audited 2014 Financial Statements

    explain the nancial situation of the entire organizationin 2014.

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    Edmonton Northlands

    Statement of Financial PositionYear Ended December 31, 2014

    December 31, December 31,2014 2013 

    AssetsCurrent Cash $ 17,005,454  $ 11,540,643Short-term investments 101,332 281,302 Accounts receivable 5,250,379  7,913,794Inventories 499,780  523,595Prepaids 631,614  1,724,624

    23,488,559 21,983,958Capital assets 185,577,953  191,923,003Goodwill - 138,344

    $ 209,066,512  $ 214,045,305

    Liabilities and Net Assets Current Accounts payable and accrued liabilities $ 11,299,637  $ 14,523,292

    Deferred contributions and revenue 1,044,182 358,375Funds held for others  12,557,989 11,638,944Current portion of long-term debt 1,724,308 1,850,301

    26,626,116 28,370,912Long-term debt 49,542,126 51,266,434Deferred capital contributions 99,912,745 103,763,857

    176,080,987 183,401,203

    Net AssetsShare capital  1,455  1,320 Invested in capital assets 34,398,771 35,180,753Unrestricted (1,414,701)  (4,537,971)

    32,985,525 30,644,102$ 209,066,512 $  214,045,305

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    Edmonton Northlands

    Statement of OperationsYear Ended December 31, 2014

    2014 2013

    RevenuesNorthlands Park $ 57,347,000 $ 58,231,112

    Rexall 42,769,176 38,403,253 Agriculture and Signature Events 22,955,366 23,342,906EXPO Centre 18,340,782 16,333,425

    141,412,324 136,310,696

    ExpendituresNorthlands Park 61,453,252  61,654,990Rexall 36,565,763 33,040,091 Agriculture and Signature Events 19,507,974 20,320,578EXPO Centre 15,405,751 14,002,451

    132,932,740 129,018,110

    Excess of revenues over expenditures before other items and other income 8,479,584 7,292,586

    Other items General, administration and corporate programs 10,003,531 10,053,058Depreciation of capital assets,

    net of amortization of deferred capital contributions 4,896,212 5,300,571Loss on goodwill impairment 138,344 298,870General grounds and building maintenance 6,106,086 5,644,445Interest on long-term debt 2,654,012 2,746,936Sales and marketing 2,212,309 2,998,399

    Total other items 26,010,494 27,042,279

    Deficiency of revenues over expenditures before grant revenue (17,530,910) (19,749,693)

    Grant revenue Alberta Agriculture and Rural Development 9,324,014 9,324,016Horse Racing Alberta 7,438,272 7,714,044Other grant revenue 3,109,912 4,216,013

    Total grant revenue 19,872,198 21,254,073

    Excess of revenues over expenditures $ 2,341,288 $ 1,504,380

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    Edmonton Northlands

    Grant RevenueYear Ended December 31, 2014

    2014 2013 Alberta Agriculture and Rural Development $ 9,324,014  $ 9,324,016Horse Racing Alberta 7,438,272 7,714,044City of Edmonton Support Agreement 2,629,031  3,525,375 Agricultural Grants 230,881 440,638Canadian Finals Rodeo Grant 250,000 250,000

    $ 19,872,198 $ 21,254,073

    2014 2013

    Deferred contributions and revenueBalance, beginning of year $ 358,375 $ 485,452 Add: funds received

     Alberta Agriculture and Rural Development 9,324,014 9,324,016Signature Events 1,971,812  1,375,220

    11,654,201 11,184,688Less: income recognized (10,610,019)  (10,826,313)Balance, end of year $ 1,044,182  $ 358,375

    Alberta Agriculture and Rural Development

    Each year, the Organization receives financial support by way of an operating grant from the Alberta Agriculture and Rural Development in recognition of Northlands’ contribution to the economy and itsefforts to enhance and promote initiatives in the province through Alberta’s agricultural societies. Thesefunds are recorded as deferred revenue along with proceeds received in advance for events produced byNorthlands.

    Horse Racing Alberta (“HRA”) 

    During the year the Organization received an annual operating grant for the 2014 fiscal year based on25.75% (2013  – 25.75%) of slot net win which totalled $7,438,272 (2013 - $7,714,044). The operatinggrant is received to offset the expenses arising directly from ongoing racing activities; for racetrack andcapital improvements related to horse racing at its racetrack; to offset overhead attributable to theracetrack operations and to offset the common area expenses .

    City of Edmonton Support Agreement

    On February 11, 2014, the Organization executed an extension agreement with the City of Edmonton. Inoperating years from 2014 to 2017 the contribution provided towards Rexall Place operating costs will be$217,132 per month or $2,605,582 annually, indexed for inflation. The City of Edmonton also agreed topay outstanding net costs carried in the dissolved Kirkness Lake Ventures ( “KLV”) entity. These netcosts were incurred as a result of events held in conjunction with the Indy Racing League. Payment was

    made on February 21, 2014 in the amount of $1,164,723.

    Naming Rights Agreement with Katz Group Canada Ltd.(KGC). As per the agreement, KGC will pay to Northlandsannual lump sum fees of $1.5 million on July 10th, 2014and July 10th, 2015. Further, if the term of the license isextended to August 31st, 2017, KGC will pay an additionallump sum fee of $1.5 million on July 10th, 2016. Inconsideration of the lump sum fees, Northlands grantsKGC the exclusive right to name the Northlands arena(Rexall Place) during the term specied.

    As can be determined the nancial position of Northlandsis dependent upon revenue positive aspects of itsongoing businesses as well as government grants. Shouldgrant revenues be compromised, as has happened withrecent reductions due to changes with the Province ofAlberta budget, increased reliance on revenue positivebusiness units will be required to sustain existingprograms and community benet. Of note is that onFebruary 10th, 2014, Northlands also entered into a

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    The Northlands Arena (Rexall Place)OperationsThe Northlands arena (Rexall Place) was originally openedin 1974 and has hosted sporting events, performances,and other social gatherings for over 41 years.

    The Northlands arena (Rexall Place) currently has threemajor tenants: the Edmonton Oilers (National HockeyLeague), Edmonton Oil Kings (Western Hockey League),and Edmonton Rush (National Lacrosse League). In additionto the sporting events associated with these tenants,the facility hosts between 30 – 40 concerts per year and

    various other events. In total, the facility has accommodatedan average of 140 events per year over the past ve years.As mentioned, the venue is one of the busiest arenas inthe world; it was ranked #3 in Canada, #14 in North America,and #33 in the world by Pollstar in 2014. The facility draws anaverage of 1.6 million visitors to the local area each year.

    The following chart explains the type of events at thefacility in 2014 as well as the nancial contribution(based on the audited 2014 nancial statements) of eachto facility revenues and the overall Northlands organization.

    Type of Event # of Events at theNorthlands arena(Rexall Place) in 2014

    Total Event Attendancein 2014

    EventRevenuein 2014

    Net Contributionto Northlandsin 2014

    WHL 46 242,432 $3,876,562 $603,865

    NHL 49 699,568 $16,109,887 ($446,835)

    Lacrosse 10 49,423 $965,403 $346,273

    Concerts 36 381,097 $16,956,312 $8,157,199

    Sporting/Family/Various 17 89,854 $2,913,733 $1,061,151

    CFR 6 68,874 $6,406,041 $970,784

    Non Event Specifc N/A — $4,831,458 1 ($1,455,527) 2

    TOTAL 164 1,531,248 $52,059,396 $9,236,910

    Due to the nature of the events and activities it accommodates,the operation of Northlands arena (Rexall Place) createspositive cash ow annually for Northlands. In 2014 theNorthlands arena (Rexall Place) contributed approximately$9.2 million to Northlands making it the most protablebusiness unit of the organization. The annual contributionof $9.2 million from the Northlands arena (Rexall Place) in2014 contributed to overall corporate surplus of

    1 Indicates revenues that offset the non-event specic costs cannotbe attributed to a specic event.

    2 Indicates expenses that are not tied to a specic event yet arerequired to operate the building.

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    $2.3 million; the viability of the existing Northlandsbusiness model is highly dependent upon the positivecash ow generated by the facility.

    It should be highlighted that the nancial strength of thelarge arena model is driven by the concert and eventindustry and complimented by the sport and recreationindustry as clearly dened in the previous table. One of thekey understandings of the NASC and those that participatedin the associated planning process was that it was not theloss of the Edmonton Oilers that reduces facility viability;it is the loss of concerts that are currently the backbone ofNorthlands nancial success. Concerts will also be criticalto the operating success of the downtown arena (Rogers Place).The primary tenant in any venue is a critical part of thelarge arena nancial model but as the NASC learned itis a complimentary revenue stream and not the primary

    revenue driver for the Northlands arena (Rexall Place).Currently, Northlands estimates it loses three to veconcerts annually due to scheduling conicts.

    The Northlands arena (Rexall Place) has been renovatedtwice since its original construction. It has deferredmaintenance requirements of approximately $16.2 millionbetween now and 2024. A detailed and independentdeferred maintenance study was performed byMHPM Project Leaders as part of this process and anunderstanding of deferred maintenance cost impactswere identied. The value of the deferred maintenancecosts has often been questioned and the NASC is

    condent that the independent review provides clarity onthe Northlands arena (Rexall Place) scenario. The RexallPlace Building Condition Assessment is included in theappendix and outlines the following required investmentin the facility to keep it operational.

    3 years: $5,986,150 (2015 – 2017)

    5 years: $8,883,400 (2015 – 2019)

    10 years: $16,242,650 (2015 – 2024)

    Due to its age, the facility does not offer modernamenities and experiences that are found in newer venues

    (including the new downtown arena (Rogers Place) when itis completed). The facility does however have substantialremaining usable life and represents a community assetthat would require signicant capital investment to replace.The deferred maintenance valuation suggests that themaintenance associated with prolonging the operationalutilization of the Northlands arena (Rexall Place) may offerreasonable return on investment for a large public arenafacility if a viable operational model can be developed.

    Planning ContextEdmonton’s downtown is undergoing major investment

    in new construction and revitalization. A key driver ofthis investment is the Edmonton Arena District (EAD).The EAD will be a world-class destination whereEdmontonians and visitors from across the CapitalRegion and around the world will come to live, work,and play. Anchored by a vibrant public plaza and thedowntown arena (Rogers Place), a state-of-the-art sports,entertainment and event venue, the EAD will be a dynamicmixed-use urban destination that is true to Edmonton’scharacter and unlike anything in North America.

    While Northlands is excited about the impact the EAD wilhave on Edmonton and the surrounding area, Northlands

    current business model will be greatly inuenced by howthe new downtown arena (Rogers Place) will transformthe special event, concert, and sporting venue landscapein the city, region, and province. Realizing the potentialimpact the new downtown arena will have on theNorthlands arena (Rexall Place), its operations, and itsplace in the future business model of the Northlandsorganization, the Northlands Board of Directors hasstruggled with a future plan of action for the facility sincethe EAD was announced. Decision making around thefuture of the Northlands arena (Rexall Place) is complexand a number of different factors must be considered.

    The Northlands Board of Directors recognized that the pastnumber of years has generated a highly confrontationaldebate surrounding major sports and entertainment venueswithin Edmonton. This negativity has impacted communityrelationships, communication, and the ability to envision anoutcome that supported the success of the EAD, Northlands,and the greater Edmonton community. In an attempt toinvolve the community in the discussion, and under therealization that the Northlands Board of Directors neededexternal advice, the Northlands Arena Strategy Committee(NASC) was struck in October, 2014. The strategic intentfor the development of the NASC was to seek independentcommunity advice that represented a diverse group

    of community stakeholders who could recommend anoutcome that was considerate of the needs of Northlandsbut founded in a greater vision for the betterment of theentire city and province. The NASC, and its associatedplanning process, was structured to lead to an open andtransparent community driven outcome and to create anawareness of Northlands and the reality of its current andfuture circumstance. The Northlands organization is awarethat status quo regarding the Northlands arena (Rexall Placeand its entire operation is not an option. The NASC processis also part of a larger but sequential visioning initiative thatthe Nortlands organization is currently undertaking.

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    October 2014 April 2015 Q4 2015

    Northlands ArenaStrategy Committee(NASC) of the Board

    NorthlandsBoard of Directors

    NASC Findings Summary& Recommendations

    Final NASC Report

    Delivered to NorthlandsBoard of Directors

    Northlands Board

    of Directors RevisedOrganizationalStrategic Plan

    Final NASC ReportIssued to the Public

    It was critically important to the Northlands Boardof Directors that the ndings of the NASC would bepresented without inuence by the Northlands Board ofDirectors. Also important was that the ndings would

    be delivered to the Northlands Board of Directors andthe public concurrently. As such, this report representsthe ndings of the NASC solely and independently.The use of this report will be at the sole discretion ofthe Northlands Board of Directors as the governanceauthority for Northlands. It is important to the NASC andthe Northlands Board of Directors that the NASC reportwas delivered with transparency and independence.

    The NASC is ultimately tasked with recommending a planfor the future of Northlands arena (Rexall Place) and its site.The complete Terms of Reference for NASC is found inthe appendix however key elements are presented as

    follows. The key goals of the strategic plan for the venueshall be to ensure that the Northlands arena (Rexall Place):

    • Is a facility or site that meets the needs of thecommunities Northlands serves including localneighbours, the City of Edmonton, and northernAlberta and is supported by those communities;

    • Is a facility and site that furthers the interestsof agriculture, arts, culture, education, industry,commerce, athletics, sports, and entertainment,and community enhancement throughoutnorthern Alberta;

    • Fosters a world-class and liveable local community,municipality, and region; and

    • Meets current needs of the community, but providesexibility to address dynamic, long-term needsas well.

    The responsibilities of the NASC, as outlined in theTerms of Reference, are to:

    • Develop an action plan and schedule to fulllits accountabilities;

    • Manage the development of short- and long-termstrategic plans regarding Northlands arena(Rexall Place) and its site;

    • Collaborate with key stakeholders throughoutnorthern Alberta regarding this planing process;

    • Foster community engagement throughoutthis planning process to ensure relevance of,and support for, its outcomes;

    • Develop business and nancial modelling necessaryto support informed decision making; and

    • Provide recommendations to the NorthlandsBoard of Directors by April 15th, 2015 regardingthe short- and long-term strategic plan for theNorthlands arena (Rexall Place) in accordancewith Northlands’ overall objectives.

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    The NASC is responsible for identifying and assessing viableopportunities for the future use of the Northlands arena(Rexall Place) and its site. The assessment process includes,but is not limited to, assessing and understanding:

    • The current and future nancial contribution andimpact of the Northlands arena (Rexall Place);

    • Relevant historical information and projecteddevelopment trends which may impact theNorthlands arena (Rexall Place) site;

    • Legal and contractual obligations in respectof the Northlands arena (Rexall Place) site;

    • Community and public interests, needs, and feedback;

    • Facility and design recommendations;

    • Estimated operating, facility, and site cost projections;

    • Estimated facility and site constructionplans and timelines;

    • A revised business plan and operating overviewfor the Northlands arena (Rexall Place) site;

    • A facility and site use plans, and access plan; and

    • Clear community support for the recommendation.

    The NASC members were strategically identiedto capture a fresh perspective on the situation anddeliver advice to the Northlands Board of Directorson April 15th, 2015. The advice of the NASC to theNorthlands Board of Directors is not binding and will

    feed into a broader strategic planning process forthe entire Northlands organization underway which isscheduled to be complete in 2015.

    The NASC deliberately includes strategically selectedcommunity leaders representing afliated organizationsand a wide variety of perspectives. Interests such asindustry, commerce, the local community, local andprovincial governments, sports and entertainment,rural Albertans, and planning and development areall represented. Additionally, specialty consultants werehired by Northlands to assist the NASC in generatingpertinent research, engaging the broader Edmonton

    community, and conducting necessary nancial analysis.A list of NASC team members is provided in the appendix.

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    Northlands Board of Directors

    Northlands Arena Strategy Committee

    ExplorationSubcommittee

    EngagementSubcommittee

    FinanceSubcommittee

    Information necessary for the NASC to contemplate thefuture of Northlands arena (Rexall Place) was generatedthrough the efforts of three Subcommittees. The threeSubcommittees were comprised of selected members of

    the overall NASC and supported by staff and consultantsas required.

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    Key Findings Key Findings

    Travel(Three Trips to

    Five Cities/Markets)

    Compilation ofBest Practices

    in North America

    EXPLORATION

    Background Research

    The Exploration Subcommittee was responsible foridentifying and assessing viable opportunities by gatheringinformation on other areas in North America that havedeveloped new arena facilities and introduced multiple

    large arena venues into a single market. As well, a reviewof mixed-use development models and repurposing ofperformance venues was conducted. The ExplorationSubcommittee met with owners, operators, consultants,and staff at the various venues to ensure a multifacetedperspective was gathered.

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    Key Findings Key Findings

    Presentation to Volunteers & Shareholders

    Presentationto Staff 

    Key Findings

    StakeholderPlanning Sessions

    Key Findings

    PublicWeb Survey

    Key Findings

    Group Session with LocalCommunity Associations

    ENGAGEMENT

    Develop Communications Plan

    The Engagement Subcommittee was responsible forcollaborating with internal and external stakeholdersto gather and assess community input. Engaging thegeneral public, internal staff and volunteers,

    key community stakeholders, and residents of theimmediate area around the site were all areas offocus for the Engagement Subcommittee.

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    Key Findings Key Findings

    Assess Financial Impactson the Northlands Arena

    (Rexall Place)

    Assess FinancialImpacts on the Entire

    Northlands Organization

    FINANCE

    Review/Define Models & Assumptions

    The Finance Subcommittee was tasked to develop thenancial implications of future Northlands arena (Rexall Place)models based on data provided by the Engagement andExploration Subcommittees. Although the scope of the

    NASC was only around the future of the arena facility,the impacts of changing the use of the Northlands arena(Rexall Place) to the overall Northlands organizationalso needed to be measured. The work of the FinanceSubcommittee was supported by independent experts1.

    1 KPMG was retained to compliment and support the workof the Finance Subcommittee.

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    Planning StakeholdersAlthough Northlands is a primary stakeholder for the NASC

    planning process, both the City of Edmonton and Provinceof Alberta will be impacted by future decision makingrelated to the Northlands arena (Rexall Place). Both groupshave representation on the NASC and were extensivelyinvolved in the associated planning process.

    The City of EdmontonThe City of Edmonton currently owns the land on whichNorthlands operates (160 acres). The land was donatedby Northlands to the City in 1950 who then leased itback to the organization. The current lease agreementbetween Northlands and the City of Edmonton for use ofthe 160 acre site expires in 2049. It is important to note thatthe assets and infrastructure on the Northlands property(Northlands Park Racetrack & Casino, the Edmonton EXPOCentre, the Northlands arena (Rexall Place), and ancillaryproperties) are assets of Northlands.

    Northlands has a Master Agreement with the City of Edmontonwhich outlines a number of roles and responsibilitiesassociated with planning, development and operationsof the site and associated facilities. Northlands is requiredto provide nancial information to the City regarding their

    yearly operations. Furthermore, in order to either constructnew buildings/structures (with a value over $250,000) orrepair/alter existing facilities (with a value over $750,000),it must rst acquire approval from the City1. As the landowner,the City also has restrictions related to its ability to investin the future use of the Northlands arena (Rexall Place)as a sports or entertainment venue intended to competewith the new downtown arena (Rogers Place)2. Northlandsalso has a loan on the Edmonton EXPO Centre payableto the City of Edmonton in the amount of $49,757,673(as of December 31st, 2014).

    1 1989 Master Agreement with City as paraphrased by Roger Swainson

    2 Sect ion 22.1 of the City of Edmonton and Edmonton Arena Corporation Master Agreement (http://www.edmonton.ca/ city_government/documents/Arena_Master_Agreement.pdf).

    In addition, all ticket surcharges collected and receivedby the City pursuant to Bylaw 10841 for Northlands arena(Rexall Place) events after National Hockey League hockeyis no longer played at the Northlands arena (Rexall Place)

    will be deposited into the City’s general revenue andshall not be paid to Northlands or be used for thedirect benet of the Northlands arena (Rexall Place)3.The current ticket surcharge contribution is a componentof the positive return the Northlands arena (Rexall Place)currently contributes to the overall Northlands organization.

    The City of Edmonton has demonstrated concern forthe future sustainability of the Northlands organizationand future use of the existing Northlands arena sitethrough Council deliberations. This NASC report iscomplementary to direction provided by the Mayor andCity Council in December of 2010 through two motions:

    “Sustainability of Northlands

    1. That the City Manager work with Northlandsand other relevant stakeholders, to prepare areport on the range of scenarios which could bepursued to ensure the sustainability of Northlands.

    Long Term Plans for Rexall Place Lands

    2. That the City Manager prepare a report on whatprocesses should be undertaken to determinethe long term plans for the City-owned RexallPlace lands, should a new arena project be

    approved by City Council.”

    In addition to the complementary nature of the workundertaken by the NASC through this process to themotions identied above, the process has stronglyconsidered City and community interests. As theland owner, the City of Edmonton has been activelydiscussing the impact of the new downtown arena(Rogers Place) on Northlands and the viability of theNorthlands arena (Rexall Place) for many years. It will beimportant to align a successful outcome with the bestinterests of the City of Edmonton.

    City of Edmonton Council also received a presentationregarding the NASC process and nancial analysis conductedby the Finance Subcommittee on February 19 th, 2015.The presentation materials are included in the appendix.

    3 2014 Ticket Surcharge Agreement between the City of Edmontonand Edmonton Arena Corp.

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    The Province of AlbertaNorthlands and the Province of Alberta have a strong workingrelationship and are driven by similar goals and aspirations.As the provinces oldest and largest agricultural society,Northlands receives $7.3 million dollars (recently reducedfrom $9.3 million due to the 2015 Provincial budget) toconnect Albertans with agriculture and to sustain andstrengthen the agricultural sector. Northlands’ 137 yearsstarted on October 15th of 1874, where people gatheredin Fort Edmonton to exhibit the best in local livestock,grain, vegetables, and crafts. They were a collectionof farmers, ranchers, and agriculturalists eager tovolunteer their time for a greater good and to servethe community in a way that would benet everyone.Since then, Northlands has grown to serve a much bigger

    role in northern Alberta. Northlands is a proud partnerwith the Province to deliver and promote agriculturethrough a lense of innovation, research, marketing,and education. Northlands focuses on local food,commerce, and education in its Signature Events.Northlands programming and food production areall centered around a commitment to the agriculturalsector achieving its mandate with the Province.

    Another aspect of Northlands relationship withthe Province of Alberta is through the NorthlandsPark Racetrack and Casino. With 550 slot machines,Northlands operates a racing entertainment casino

    in support of horse racing. The linkage between thecasino and the racetrack is key to the protability ofNorthlands Park, without each of these horse racingwould not exist. Northlands currently holds one of two“Class A” licenses in the province, dened by over 100days of horse racing within a year. The Alberta Gamingand Liquor Commission is responsible for the licensingof all racing entertainment casinos (REC) located atracetracks throughout Alberta. The existing REC forNorthlands is in place until December 31st, 2016. The REClicense authorizes Northlands to operate a gaming facilityin support of horse racing. “Class A” race track licensesare approved by Horse Racing Alberta, a not-for-prot

    corporation responsible for issuing racing licenses for allhorse racing in Alberta.

    Northlands is driven by a vision of a strengthenedagricultural sector and associated economy. Its supportof agricultural stakeholder groups and ability to gatherAlbertans and expose them to agricultural initiativesand innovation through its Signature Events is key tosustaining agricultural lifestyles and enhancing theagricultural economy in the Province.

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    Potential Options

    As the planning process was initiated and research was conducted, vepreliminary models were developed for the future of Northlands arena(Rexall Place) and are outlined on the following pages1. When the NASCbegan this process it committed to evaluating all potential options andas such the initial reduction to ve specic models of fered the NASC theability to focus research, nancial modeling, and energy. These ve modelswere crafted by the NASC and based on the preliminary overview of theNorthlands scenario, stakeholder limitations, and initial research that hadbeen conducted and reviewed by the group. These options were then further

    explored through focused stakeholder consultation. The models were sharedwith the public initially through the web survey announced and distributed onDecember 2nd, 2014.

    1 It is important to be aware that any of the options that involve the alteration of Northlandsarena (Rexall Place) with a capital cost in excess of $750,000 need the approval of the City.As well, the City as landowner is restricted in it s ability to invest in Northlands arena(Rexall Place) a sports or enter tainment venue intended to compete with the new downtownarena (Rogers Place).

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    Model #1: CompeteNorthlands would continue to operate the Northlands

    arena (Rexall Place) without making signicant changesto the existing infrastructure (e.g. seating capacity andamenities would remain the same/similar). Northlandswould attempt to compete with the downtown arena(Rogers Place) for entertainment properties and products.The current operational expertise of Northlands, the lackof debt payments on the facility, the venue capacity,and an ability to be highly price competitive all supportedthe inclusion of this model for further exploration.

    Potential implications of the model:

    • Current business practice would not change forthe Northlands arena (Rexall Place) however the

    level of use and visitation would be diminished. Itis understood that 94 events would be lost with thecommitment by the Oilers Entertainment Group(OEG) that two major tenants (the Edmonton Oilersand Edmonton Oil Kings) would migrate to the newdowntown arena (Rogers Place).

    • Competition would have an impact on the downtownarena (Rogers Place) and the EAD. The businessmodel for the downtown arena (Rogers Place)considered between 160 – 200 days of programmingand it was assumed that the ability to compete in themarket would impact the projected business model

    of the downtown arena (Rogers Place).• Through its agreement with the OEG, the City of

    Edmonton is restricted from investing public fundsinto the Northlands arena (Rexall Place) that wouldrender the facility as a competitive venue to thedowntown arena (Rogers Place). As this is the case,support from the City in a compete scenario wouldbe limited.

    • Some current entertainment products that preferthe existing site versus a downtown locationwould have another venue option. A heavy focuson dirt related events, bookings that conict with

    hockey events, and mid-sized concerts could all beaccommodated in this model.

    Model #2: Reduce ScaleNorthlands would reduce the scale (capacity) of the

    Northlands arena (Rexall Place) in order to provide themarketplace with a mid-sized arena venue. This scenarioassumes that the facility would continue to accommodatethe same types of usage (e.g. ice events, concerts,special events) but at a reduced capacity. Capacity options(i.e. 5,000 vs 10,000) were identied as requiring additionaarchitectural and business exploration. This approach isassumed to be best implemented via collaboration withthe new downtown arena (Rogers Place) if a programmingagreement could be reached between Northlands andthe OEG. This model provided value as it could beundertaken through a phased approach and could beachieved with limited capital investment into the facility.

    This concept was supported by research in other marketswithin North America.

    Potential implications of the model:

    • May provide the opportunity to meet an existingcommunity, City, or regional need for a smallerperformance and event arena.

    • May provide an appropriate site for dirt relatedevents, electronic dance events, ethnic and culturalevent opportunities, and mid-sized sport events.

    • A major public transportation asset(Coliseum LRT Stat ion) would continue to be 

    utilized for event purposes.

    • The local community will continue to benet fromevent visitation and trafc.

    • The operating model of the facility will requireadaptation (e.g. stafng, revenues and expenses,management, etc.).

    • Some level of competition will exist between theNorthlands arena (Rexall Place) and the downtownarena (Rogers Place) but an opportunity existsfor collaboration.

    • The availability of a small performance arena venue

    may enhance Edmonton’s ability to attract certainevents that require multiple venues.

    • A secondary event venue could allow foroverow bookings.

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    Model #3: RepurposeNorthlands would investigate alternative uses for the

    existing facility structure and repurpose based onnancial best value and community benet. As an asseton City land it was felt that repurposing the venue mayoffer an opportunity to meet an existing communityneed while concurrently maintaining activity andactivation in the neighbouring community. A number ofconsiderations must be taken into account consideringrepurposing including the current state of the existingstructure, potential marketplace need/demand,and operational impact in order to further denepotential repurposing options.

    Potential implications of the model:

    • Likely to require signicant capital investment.

    • May provide the opportunity to meet an existingcommunity, City of Edmonton, or regional need.

    • May require Northlands to fundamentally alter itsbusiness model and organizational structure.

    • Is likely to impact utilization of support infrastructure(e.g. public transit, parking, etc.).

    • May provide potential to create synergies with otherNorthlands or surrounding community infrastructure.

    • The nature and volume of visitation to thesurrounding community may change.

    • Would likely not deliver the nancial viability neededto create a sustainable Northlands business model.

    • May generate local trafc to support the area andNorthlands campus.

    Model #4: DecommissionNorthlands would preserve the Northlands arena (Rexall

    Place) structure but the facility would not be available forregular usage. Two scenarios exist within this model:

    Complete decommissioning—The building is notavailable for any level of event usage. The facilityis kept in current condition but secured from asafety perspective. This model would limit costsassociated with demolition or capital investmentfor repurposing. This model would provide anextended period of time for decision making andcould be strategically important based on future citypopulation growth.

    Partial decommissioning—The building is availablefor infrequent levels of event usage (a lengthystart-up timeframe for venue preparation is likelyto be required under this scenario). The facilitywould be decommissioned with strategic intent torecommission the facility when needed for singularevents, large community event hosting, or alternativeuses that are undened at this time.

    Potential implications on the model:

    • Potential for negative impacts on surroundingcommunity due to loss of event trafc and existenceof decommissioned, dormant structure.

    • Loss of revenue to Northlands creating anunsustainable business model.

    • Signicantly reduced usage of the ColiseumLRT station.

    • Will strengthen the revenue potential of thedowntown arena (Rogers Place).

    • Will have a negative impact to the Northlandscampus activation and potential negative impacton other site amenities.

    • Will create a safety risk associated with lack ofutilization, public use, and infrequent or deferred

    building maintenance.• Could lead to a signicant community eye sore

    that would impact the Northlands campus andneighbouring community.

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    Model #5: DemolitionNorthlands would demolish the Northlands arena (Rexall

    Place) and nd another use for the site. The developmentvalue of the land would be capitalized on (e.g. throughsale to another party, partnership) to meet the nancialand strategic needs of Northlands and/or the Cityof Edmonton. This model would require signicantcoordination with the City of Edmonton due to leaserestrictions currently in place.

    Potential implications on the model:

    • May provide capital funds for Northlands that couldbe reinvested into existing or new infrastructure.

    • The scenario presents numerous complexities due

    to the existing land lease agreements, value ofinfrastructure, and mandate of Northlands (the leaseagreement expires in 2049).

    • Would signicantly alter the mandate, operations,and organizational structure of Northlands.

    • Potential may exist to meet City of Edmontondevelopment and strategic mandates (e.g. transitoriented development, core neighbourhooddevelopment, etc.).

    • Likely to impact and change the dynamics of thesurrounding neighbourhood.

    • Could provide activation to offset the current annualtrafc pattern of 1.6 million annual visitors currentlygenerated by the Northlands arena (Rexall Place).

    • Would not generate positive cash ow in theperiod of time necessary to create a sustainableNorthlands business model.

    • The future of the site after demolition might notinvolve the Northlands organization.

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    Research Findings

    The following sections outline the ndings of the three NASC Subcommittees:Exploration, Engagement, and Finance. Details to support the discussion ineach area can be found in the appendix.

    Exploration Subcommittee FindingsThe Exploration Subcommittee was tasked with researching a number of

    cities and facilities that have experienced similar situations and undertaken avariety of approaches to deal with new large sports and entertainment venuesintroduced into markets. This research provided valuable learnings for theExploration Subcommittee and was important in the broader identication ofpotential options and strategies for the Northlands arena (Rexall Place).

    A number of other areas throughout North American have undergone similarsituations introducing new arena venues for primary NHL team tenants. An initialscan of other situations was conducted to inform the activities of the ExplorationSubcommittee. Initial ndings of 17 other contexts generated the followingsummary statements. For more detail, please refer to the appendix.

    • Seventeen cities with NHL franchises have replaced existing venueswith new venues since 1994 (4 in Canada, 17 in the United States).* Includes the relocated Winnipeg Jets and excludes expansion

    franchises in Tampa Bay and San Jose that played in temporary venues.

    • Eleven of the replaced NHL venues were ultimately demolished.

     » In most instances demolition occurred after the facility wasdecommissioned for a number of years.

     » Decommissioning a venue for an extended period of time has generallyresulted in a number of negative consequences (e.g. public displeasure,nancial strain on the municipality, negative impacts on thesurrounding community, deterioration of venue).

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    • Six examples exist of facilities that were preservedfor similar purposes after a new arena opened(three currently remain standing):

     » The Pacic Coliseum in Vancouver continues tobe utilized for hockey and entertainment.

     » The Spectrum in Philadelphia continuedto receive moderate levels of utilization insubsequent years but was ultimately demolishedin 2011.

     » The Izod Centre in New Jersey will bedecommissioned by 2017.

     » The Forum in Los Angeles was used as amultipurpose arena until 2012 and hasrecently (2014) been renovated into a concertfocused venue.

     » The Miami Arena was demolished in 2008due to limited usage and future potential.

     » The Reunion Arena in Dallas experienced minimalusage after both primary tenants moved to a newvenue and was demolished in 2009.

    • Three venues have been repurposed:

     » Maple Leaf Gardens in Toronto (recreation andvarsity sports venue).

     » The Forum in Los Angeles (concert focusedvenue).

     » Montréal Forum (entertainment complex and

    retail).• In the majority of situations, a plan was not in place

    for the future of the existing facility prior to the newfacility opening.

    In order to fully grasp the impacts and dynamics facedby other communities, members of the ExplorationSubcommittee visited Kansas City, Columbus, Ottawa,Toronto and Vancouver. The following section providesan overview of the facilities and cities visited, with keyndings outlined for each.

    Kansas City, Missouri(Sprint Center)Opened in 2007, the Sprint Center has a seating capacityof over 18,000 and has 72 luxury suites. The Sprint Centerwas constructed for $276 million and is owned by the Cityof Kansas City (Missouri). Operations for the facility arecontracted to AEG, a private company which operatesnumerous venues in North America and Europe. Whilethe Sprint Center has often been cited as a potentialhome for an NHL and/or NBA franchise, the venue doesnot currently have a major tenant.

    The Sprint Center is located on the eastern boundaryof the Power & Light District in downtown Kansas City;a shopping and entertainment district which includesmusic and live theatre venues, dining, retail, andcommunity space. Development of the district began in2005 and now includes over 50 restaurants, bars, shops,and entertainment venues. The nine block neighbourhoodlinks the Convention Center to the Sprint Center and hasbeen credited with reenergizing downtown Kansas City.Attractions include the Arvest Bank Theatre at The Midland,The Mainstreet Movie Theater by Alamo, DrafthouseCinema, and the KC Live! Entertainment District.

    Kansas City, Missouri(Kemper Arena)The Sprint Center replaced the Kemper Arena, which wasopened in 1974 and was constructed at a cost of $23 millionThe American Royal Association, a local not-for-protagricultural organization, played an integral role in thefacilities construction and operations. The initial planfor the Kemper Arena when the Sprint Center openedin 2007 was to allocate a select number of events to itin order to help offset operations costs. However, thefacility has experienced physical deterioration and anumber of other operational issues under this partialdecommissioning situation. The facility currently receivesminimal utilization and a plan for the future of the structureand the site has not been determined. The current cost ofsustaining the Kemper Arena is approximately $1.5 millionannually. The demolition cost for the facility is estimatedat $10 million.

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    upload.wikimedia.org (Sprint_Center_Kansas_City_Missouri.jpg)

    upload.wikimedia.org (Livestrong_Sporting_Park_-_Sporting_KC_v_New_England_Revolution.jpg)

    Kansas City, Kansas(Sporting KC Park)Sporting KC Park is part of the Village West development,a retail and entertainment district located 11 miles west ofdowntown Kansas City across the state line. Constructionof Village West began in the early 2000s and has quicklygrown to become one of the regions most visitedtourist destinations. In addition to Sporting KC Park,

     Village West includes the Kansas Speedway, CommunityAmerica Ballpark (~10,000 seats), a vacation/resort villageand waterpark, and large scale retail development.

    Key FindingsKANSAS CITY, KANSAS

    • The partial decommissioning of the KemperArena has had signicant impact on thesurrounding neighbourhood (e.g. loss ofbusinesses, reduced vibrancy and safety).The loss of utilization had a dramatic impacton the safety, land value, and developmentwithin the neighbouring community.

    • The Sprint Center has strong successwith entertainment routing, in large part,due to not having a primary tenant(e.g. NBA or NHL).

    • The Sprint Center produces positive

    cash ow for the City and annuallyout-performs projections.

    • The development of the Sprint Centertriggered a non-compete clause with theKemper Arena.

    • The alignment of the Sprint Center withthe “Power and Lights District” has creatednumerous opportunities and created a vibrantdowntown core.

    • The minimal utilization and future ofKemper Arena has become a highlycontentious public issue.

    • A sustainable plan was not in place forKemper Arena when the Sprint Center wasbeing developed resulting in the currentdilemma regarding the future of the building.

    • Kemper Arena has signicant deferredmaintenance issues that impact operationsat events.

    • A plan for the future disposition ofthe Kemper Arena and its site has yetto be formalized.

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    upload.wikimedia.org (Arena_District _Columbus11.jpg)

    upload.wikimedia.org (Columbus-ohio-nationwide-arena.jpg)

    Columbus, Ohio(The Columbus Arena District)The Columbus Arena District is located to the immediatenorthwest edge of downtown Columbus and covers anapproximate area of 75 acres. The Arena District sits onformer industrial and warehouse land that was also hometo the famed Ohio Penitentiary. The area became largelyabandoned between the 1960s and 1990s.

    In the mid-1990s the City of Columbus identied the areaas a priority for redevelopment and a potential catalyst forthe revival of the city’s northwest core neighbourhoods.Proposals were sought from a number of investors anddevelopers for the area. A core section of land (~25 acres)was eventually sold by the City to the Nationwide RealtyInvestors group. Nationwide Arena, home to the ColumbusBlue Jackets, was the rst major venue constructed in the district and opened in 2000. In the following years,a number of complimentary venues and spaces have beendeveloped in the district. The Nationwide Arena wasconstructed at a cost of $175 million.

    Two years prior to the opening of Nationwide Arena,the Value City Arena was also opened on the Ohio StateUniversity Campus. With a capacity of up to 20,000 forsports and entertainment, the Value City Arena andNationwide Arena were in direct competition withinthe regional marketplace. In 2012, an agreement wasreached with all parties to place both arenas under themanagement of the Franklin County Convention Authority.This agreement eliminated direct competition between bothvenues and created a number o