Rexall Place, currently home of the Edmonton Oilers, opened in 1974.
Edmonton, Alberta, will not be a two-arena town, at least not major league-sized arenas. That was the recommendation of the Northlands Arena Strategy Committee tasked with deciding the future of Rexall Place, current home to the Edmonton Oilers of the National Hockey League, when Rogers Place, the Oilers future home downtown, opens in late 2016,
Given that the primary tenant and most of the concerts and events currently at Rexall Place will move to the new downtown arena, the recommendation of the committee appointed by Northlands which operates Rexall Place, was to repurpose the older venue. The arena committee saw no future in head-to-head competition with the new arena, but instead recommended collaboration with the Oilers.
Northlands can repurpose Rexall Place by reducing the scale and hosting midsized events,
multiday sporting events and dirt-related events such as the Canadian Finals Rodeo, the report suggested. For this scenario to be successful, Northlands will collaborate with the Oilers Entertainment Group in developing a noncompete agreement for the programming, facility use, marketing and sales of the two arena facilities. Northlands arena will act as a secondary and complimentary venue.
The report definitely recommended Northlands repurpose the building in a way that takes the Northlands arena out of the large arena business. Options include supporting the development of recreational facilities or an agricultural education centre. There is also an option to repurpose the facility to support the trade, consumer, conference and convention business in Edmonton.
If funding and partners cannot be found for the purpose of repurposing Rexall Place, the secondary recommendation is to demolish it and develop a new use for the land.
For the complete Northlands Arena Strategy Report, please click here.
Tim Reid, president and CEO of Northlands, said the committee did a thorough and factual job of studying the situation for Rexall Place, looking at it from a citywide perspective and what is best for Edmonton overall. The next step in the process is for the new board, which is being elected next month, to take a position on the proposal. Reid predicted that will happen in the next 60 days.
“When you have that lens that what’s best for the city is ultimately what’s best for Northlands, it’s a different process,” Reid said. “We have 160 acres of prime land and we have the ability to be visionary with that land and do something different than we have before. As an organization, we have to be creative.”
Rexall Place has a storied history and is the major profit center currently for Northlands, Reid noted. It also still has two NHL seasons to host before the Oilers move. The task before the committee was to recommend what should be done with Rexall Place after the team leaves. The secondary task on Northlands’ plate is to keep the staff in place to run a major arena for the next year and a half.
“We’ve been in great dialog with the Oilers on a weekly basis,” Reid said. “They are looking to drive as much business to Rogers Place as possible. But not all the business in the city of over 1 million people will go downtown. Northlands still has an opportunity. The recommendation was to repurpose as a complement to downtown. That could be a variety of things.”
He cited further agricultural development, recreational use, six arenas, six soccer pitches. “It doesn’t necessarily mean scale back and maintain in the same industry. Any other option would use a building that still has strong useful life and complement the social needs of the community.” The committee recognized that Northlands cannot do something that would hurt the city, but would rather be supportive of what is happening downtown.
Funding will have to come from external sources, Reid said. “Our land is owned by the city of Edmonton; the buildings on it are owned by Northlands. We can’t leverage the asset that is the land. We will have to look to provincial and federal government for funding. We don’t know what that looks like until the board of directors gives us direction.”
Meanwhile, Northlands’ business model has never been healthier, he said. “Quite candidly, profitability wise we’ve had the best years in the history of the company. All of that is because of Rexall Place, that’s the bulk of our profit center.” Rexall Place generated a three-year average of $7.5 million in annual earnings (2011-2014).
The report clearly identified none of the options for repurposing will offset the bottom line, so Northlands also needs to look at additional revenue opportunities on campus. “We can get close to a sustainable model, but the decision on Rexall Place will determine our revenue coming in,” Reid said.
Northlands Park racetrack is a profitable facility. The expo center breaks even. The fairs and special events are profitable outcomes. “We will have to manage our overhead. We think there is a way to make our business viable,” he added. The biggest risk is the debt associated with Expo Center, a little over $4 million a year for 30 years.
Nothlands is currently in hiring mode, with a number of newly-created positions at VP level. Adam Cook, who had been general manager of Expo Center and Rexall Place, left to manage the Rose Quarter in Portland, Ore., beginning April 12. “We made a decision not to backfill his position,” Reid said.
Instead, two point people, Dave Shaw, venue manager/events at Rexall Place, and Mike Warkentin, venue manager/sport, Rexall Place, will step up, reporting directly to Reid.
Northlands is seeking a new VP for agriculture and events in a move to reorganize. “This person will focus on our ag roots, which have to be a thread through all of our business. This person will focus on growing events we currently have, our premiere events, and introducing new ones,” Reid said. A new VP of business development will focus on delivery of our revenue streams as they relate to the Expo Center and corporate partnerships and new events.
Open positions are more on the convention side of the business, he added. Listings are with Davies Park, a recruiting firm in Canada. “We are actively recruiting about seven positions, all as soon as possible. Information is also available on our website.”
“We’ll be aggressive with revenue centers and encourage growth. We’ve also looked at retaining key employees to deliver a couple of NHL seasons as we go forward,” Reid said. “We still have one of the busiest venues in Canada to operate right up to the point of the new arena. Not migrating our staff to the new arena creates a complexity other cities have not had to deal with.”
All of that is going on behind the scenes as the public campaign to determine the fate of Rexall Place winds down. “Most people are very appreciative of the transparency in the report,” Reid said. “Some are disappointed with the fact there isn’t a viable outcome to have two large arenas in Edmonton, but emotion should not cloud our judgment. We have some really good opportunities.”
The committee studied a number of two-arena towns in the process of deciding what to do with Rexall Place, which opened in 1974. “In Kansas City, Mo., we saw the lack of relationship between Sprint Center and Kemper Arena. The recommendation of our committee is the worst thing you can do is do nothing at all. If we don’t do something quickly we can easily be forgotten.”
Reid said he is still very optimistic Northlands will honor the legacy of Rexall Place.
“We don’t think there is a great process for how to treat old sports facilities in North America right now. We got ourselves lost in that journey and hope we can guide other cities as well,” he said.
Closest to his heart in that guidance is Calgary, Alberta, which could soon find itself in the same situation as the Calgary Flames consider a new arena to replace the aging Saddledome at the Calgary Stampede. “They’ve been watching what’s happening in Edmonton. Our answer is have a strong process,” Reid said.
“It’s been a really interesting process. Unfortunately, given the value of the asset of a previously existing building with a useful life, if you tear it down, you’ve thrown away real dollars. If the decision is to tear it down, we have to exhaust all possibilities because that’s absolute. We’ll never build another one.”
Interviewed for this article: Tim Reid, (780) 471-7303