Revitalizing Edmonton

“Reports indicate approximately $1 billion will be generated in incremental tax revenue, so this arena is a good proposition for the City of Edmonton.” —Darryl Boessenkool, CFO & Executive VP

A $2.5 billion downtown revitalization project is bringing a multipurpose sports venue and 22 acres of mixed-use development to the Oilers’ hometown. CFO and executive VP Darryl Boessenkool discusses the project, which will be the largest downtown entertainment district in Canada.

When Canadian businessman Daryl Katz bought the Edmonton Oilers for $200 million in 2008, he wanted to ensure that the hockey team, a staple of his childhood memories, would stay in Alberta’s capital for the rest of his life. That, however, would require a new arena.

“The current arena, Rexall Place, hasn’t been significantly updated since it was built, in 1974,” says Oilers CFO and executive vice president Darryl Boessenkool. “And nothing around it has been developed.”

So the organization conceived a simple goal: do as noted downtown revitalization strategist Christopher Leinberger suggested in a March 2005 white paper, Turning Around Downtown: Twelve Steps to Revitalization, and create an urban entertainment district con­­sisting of a new home for the team, plus mixed-use restaurant, retail, performing, and living spaces. Many progressive cities, including Pittsburgh, Pennsylvania, and Columbus, Ohio, in the United States, have moved their sports venues downtown to spearhead devel­opment, and Katz wanted to replicate that concept in Edmonton, making its new arena one of the best in Canada.

The new stadium will contain 56 corporate suites and seating for 18,500 people, while the 22 acres surrounding it will be home to a new entertainment district with residences, hotels, restaurants, and bars.
The new stadium will contain 56 corporate suites and seating for 18,500 people, while the 22 acres surrounding it will be home to a new entertainment district with residences, hotels, restaurants, and bars.

Boessenkool, who has been with the Oilers since 1996, was excited to get involved with the project not just as an employee but also as a  die-hard fan. “My brother and I played hockey as kids, and my dad coached,” he says. “I was lucky to be in Edmonton during the Oilers’ glory years of the 1980s, when they won five Stanley Cups. So I guess you could say hockey is in my blood.”

Boessenkool helped Katz work closely with the City of Edmonton to develop a win-win plan for all parties involved. Katz contributed roughly half of the capital cost of the project himself, and in exchange, he signed a 35-year lease to operate the new arena, during which time he will keep the Oilers in Edmonton.

“The city recognized immediately what a boon this arena, as part of an entire downtown revitalization, would be, and it really got creative in terms of funding,” Boessenkool says. Edmonton used what’s called a community revitalization levy, under which it is borrowing money to pay for the arena’s construction, then paying the loan back with incremental property taxes generated by the economic growth the project sparks. “Reports indicate approximately $1 billion will be generated in incremental tax revenue, so this arena is a good proposition for the City of Edmonton,” Boessenkool says.

The plan for the arena itself is the result of deep market research. “We’ve met with almost every stadium operator in North America over the past three years to find out what works and what doesn’t work,” Boessenkool says. “But as helpful as it was to look at other facilities and say it would be nice to have X and Y, ultimately we learned to focus on our own market. We spent a lot of time with focus groups of season-ticket holders, corporate-suite holders, and sponsors, finding out exactly what they want. If you’ve sat in the same section for 30 years, for example, what do you want? Better amenities? Better sightlines? We benchmarked what other arenas are doing, then brought it back to our own arena.”

Interior rendering of the new stadium, scheduled to open in 2016.
Interior rendering of the new stadium, scheduled to open in 2016.

Three unique things came out of all that market analysis: First, the new arena will be designed to handle many types of entertainment, including rodeos, concerts, trade shows, and small theatrical performances. Second, the new arena will cater to companies that need special places to entertain clients, but it will offer just 56 corporate suites—a sharp contrast to other arenas such as Los Angeles’s Staples Center, which has three levels of suites. The decision is based on Edmonton’s unique economy, which is not dominated by corporate offices. Third, the new arena will have approximately 18,500 seats. “A lot of people have asked, ‘Why not 19,000 or 20,000?’” Boessenkool says with a laugh. “But we looked at the size of the city, the market demand, and the potential for growth over the next 35 years and determined the number of seats we need to meet continued demand for hockey and other events.”

Surrounding the arena, on a total of 22 acres of land, will be the rest of the entertainment district, a joint venture between Katz and a developer. “Edmonton has an insatiable desire for entertainment,” Boessenkool says, noting that the main vacation destination for Edmonton residents is Las Vegas. “Because of that, we wanted to make sure we developed an entertainment district anchored by the arena that would have condos, hotels, restaurants, bars, movie theatres, and fitness facilities.”  When completed, it will be the largest downtown entertainment district in Canada and the second-largest in North America.

Boessenkool played hockey growing up and was in Edmonton during the 1980s, when the Oilers won five Stanley Cups. "I guess you could say hockey is in my blood," he says.
Boessenkool played hockey growing up and was in Edmonton during the 1980s, when the Oilers won five Stanley Cups. “I guess you could say hockey is in my blood,” he says.

Initially, Boessenkool thought the $2.5 billion district and its $480 million arena would be phased in over a long period of time, but Edmonton wanted immediate results. With Greater Edmonton touting a population of 1.034 million (as of September 2013, according to Statistics Canada), the city is Canada’s fifth largest, and it has one of the strongest economies in North America. Sometimes referred to as “the Dubai of the North” because of its booming oil and gas industry, Edmonton barely felt the recession of 2008 and 2009, and unemployment there was at just 5.3 percent as of September 2013. “With our demand, we just couldn’t wait,” Boessenkool says, adding that construction plans are currently underway. “We hope to get the keys to arena in the fall of 2016.”

Boessenkool leads the operations group that will run the arena when it’s completed, and to get there, he’s working closely with designer 360 Architecture and project manager ICON Venue Group. “Our role is unique in that some arenas are built by an architect and project manager with minimal input from the operator, whereas we’ve been involved from design onward,” Boessenkool says. “How high should the ceilings be? What should the seats look like? How large should the loading dock be? We’re involved in all of the details … [of] designing the arena so that it works operationally.”

So far, the only major challenge has been the sheer scope of the project, but it’s hardly a deterrent. As Boessenkool puts it, “The amount of resources we need is incredible, but our ability to achieve what we’re achieving is also incredible.”

____________________________________________________________________

THE BOTTOM LINE

 

Job title
CFO & executive VP

Industry
Sports and entertainment

Years in the business
17

Where did you start your career?
I articled with an Edmonton CA firm called Kingston Ross Pasnak for four years when I finished university.

Describe yourself in three words
Driven, positive, trustworthy.

Advice to those just starting in finance
Become an expert in your specific area. Show your bosses that you can excel and take on added responsibilities, and this will grow your career.