Agenda Item No.: G.1.b.

Economic Development Edmonton – Hall D.

Recommendation:That the expansion of the Shaw Conference Centre be approved through the following financial strategy:1. $14 million in Infrastructure Canada

Alberta Program funding;2. The City’s share of costs to be funded

through $0.5 million in General Financing in 2003 and $9.5 million in Tax-Supported Debt beginning in 2004.

Report SummaryThis report outlines a strategy to provide the funding necessary to permit the construction of Hall D in the Shaw Convention Centre.

Previous Council/Committee Action At the June 26, 2001, Council Meeting,

the following motion was passed:That the expansion of the Shaw Convention Centre be approved, in principle, on the condition that:1. Up to $30 million in project costs are

shared equally among all three levels of government.

2. Once Partnership funding has been secured, a report requesting budget approval will be brought back to City Council for concurrence incorporating a funding strategy for the City share.

3. That the Administration review the costs of the proposed expansion and explore ways in which the capital costs can be reduced.

4. That the Administration report back on the financing of the Edmonton Convention Centre including such things as the business tax levy and comment on the viability of using a similar approach to financing Hall D.

On August 28, 2001, City Council received an information report outlining the status of partnership funding, ways of reducing project costs and the implications of using a business tax to fund part of the project costs. This was not considered a viable option

At the December 9, 2002, Council Budget Meeting, the following motion was passed:

That Hall D costs in Economic Edmonton’s 2003 Budget be referred back to Economic Development Edmonton and Administration to bring forward a project profile in January, 2003.

Report In recent years, a number of former

Convention Centre clients have advised that they are unable to consider Edmonton as a future destination because their space needs are increasing and the Centre’s capacity has not. Examples include the Canadian Association of Broadcasters, Canadian Institute of Mining and Metallurgy, Canadian Business Telecommunications Alliance and Canadian Cable Televisions Association. The Centre’s inability to provide adequate exhibition space forces Edmonton to be eliminated from their future schedules.

Calgary, Toronto, and Quebec City have recently completed expansion of their convention centres and Ottawa is considering expansion. Vancouver’s soon-to-be-added space has the potential to attract an even greater share of the Canadian market. Retention of Edmonton’s strong position as a destination of choice is not assured. Our relative proximity to two Western cities

Routing: City CouncilDelegation: W. D. BurnWritten By: R. ChomycJanuary 14, 2003 Asset Management and Public Works DepartmentFile: 2003PWL006 (Page 1 of 3)

G1b

Economic Development Edmonton – Hall D

with newly expanded space inventories has the potential to seriously erode Edmonton’s position in the Canadian marketplace.

This project will help to reverse the trend of major exhibitors not considering Edmonton as a convention centre destination.

The expansion consists of the construction of an additional 28,900 sq.ft. of exhibition hall space on the existing east terrace and the redevelopment of 28,400 sq.ft. of the existing building adjacent to the terrace. The construction of the new addition consists of reinforced concrete and structural steel with metal decking for the roof and full height glazing at the front of the addition. The redevelopment of existing space will include a new lobby and reception space, a new boardroom and client services space, new washrooms and a servery.

A revised estimate was prepared based on the above proposed work which reduced the initial $30 million estimate to $24 million.

Under the Infrastructure Canada-Alberta Program (ICAP), municipalities are entitled to $44/capita and nominate their own projects. The City of Edmonton has identified 15 projects for a total entitlement of $86 million, equally shared by all three orders of government. In addition to this entitlement, there is an opportunity for tourism related projects to be nominated by the provincial and federal government directly. This Hall D project is one of these projects. Of this amount, the federal and provincial governments have committed a maximum of $14 million.

Budget / Financial Implications Based on preliminary design and

feasibility studies, the expansion of the Shaw Conference Centre will require $24 million in funding as outlined below:2003 $1.2 million Design2004 $8.1 million Design completion,

Tender & Construction2005 $14.7 million Construction

Once construction is completed, it is expected that additional revenues as a result of the expansion will offset any operational costs.

The federal and provincial governments have indicated their commitment to fund $14 million of expenditures through the Infrastructure Canada Alberta Program. However, formal application and approval is still required.

This project will not proceed to tender until the federal and provincial funding has been approved.

The City’s share of costs is $10 million ($0.5 m in 2003, $3.4 m in 2004 and $6.1 m in 2005).

For 2003, $0.5 m is available under the Pay As You Go Program. The $9.5 m will be funded through tax-supported debt as a first priority of the 2004 tax-supported debt funding envelope of $50 million.

Justification of Recommendation1. Approval of this project will ensure that

Edmonton is considered as a destination location when major associations and exhibitors decide on a convention.

2. To meet the March 31, 2006, cut-off date of the Infrastructure Program, design must commence in March 2003 and construction must commence in March 2004. Failure to approve this project could result in the loss of the federal and

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Economic Development Edmonton – Hall D

provincial partnership funding of $14 million toward the construction of Hall D.

Background Information Attached1. New Project Profile (01 99-1083) for

construction of Hall D outlining the costs, cash flows and sources of funding.

Others Approving this Report Randy Garvey, Corporate Services Allan Scott, Economic Development

Edmonton

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Attachment 1

New Project Profile

Attachment 1 - Page 1 of 2

Attachment 1

New Project Profile

Attachment 1 - Page 2 of 2