As the Edmonton Oilers look to erase more than 30 years of futility for Canada's NHL teams pursuing the Stanley Cup, Alberta's capital already appears to have scored some development goals with its downtown Ice District project.
Regardless of whether the Oilers prevail on the ice against the Florida Panthers in the championship series underway, downtown Edmonton is considered by some to have momentum due to arena-adjacent real estate developments that have reversed the fortunes of a once-struggling area. The Oilers are set to play the Florida Panthers in Game 5 of the Stanley Cup Final on Tuesday, with Florida leading in the best-of-seven series three games to one.
Real estate professionals have praised the hockey-inspired urban transformation brought about by the Ice District, as the area built by Oilers' owner Daryl Katz and his company is called. The area that spans roughly 25 acres around the Rogers Place Arena has two office buildings, including the 66-floor mixed-use Stantec Tower that has stood as Canada’s tallest building outside of Toronto since its completion in late 2018. The building has 315 residential condos and 168 apartments, while the lower 29 floors hold offices sold for over $550 million to a German firm in 2019.
The district also includes the 50-floor, 346-room JW Marriott Hotel as well as the 60,000-square-foot Grand Villa Casino and a public square enjoyed by hockey faithful sporting the Oilers’ distinctive blue, orange and white colours.
“They were successful during the headwinds of the economy of Edmonton," Bob Dhillon, CEO of Calgary-based Mainstreet Equity said in an interview, referring to COVID-19 and price and other disruptions in the oil industry-focused city. "Everything that could have gone wrong went wrong, and yet they were somehow even more successful.”
The Katz Group did not reply to CoStar email seeking a comment.
Though some property professionals might see the Ice District with admiration, the Edmonton real estate market has still experienced instability in recent times, mainly in the office sector. Edmonton has a high office vacancy rate of 21.1%, according to CBRE's first quarter report, with government offices recording a vacancy rate of 23.8%. However, the area's office vacancy declined slightly in the most recent quarter, CBRE said.
Sparking Transformation
The urban transformation began after Katz, an Edmonton-born lawyer, purchased the Oilers franchise for about US$200 million in 2008. At the time, Katz was best known for buying and reinvigorating the Rexall Drugs pharmacy chain.
Katz aimed to move the Oilers from the 34–year-old Northlands Coliseum to a downtown site without recent investment five kilometres to the southwest. The project bore fruit when Rogers Place arena, which took four years and cost $483.5 million to complete, opened in 2018. The city of Edmonton owns the building after investing $226 million in the project. Katz Group Real Estate put up $132.5 million, with about 85% of that to be paid through rent the team will pay at the facility over 35 years.
Real estate investors have since been attracted to the reinvigorated area. Mainstreet Equity's Dhillon said his company purchased 100 properties near the Ice District, a section of town he calls “the soul of downtown Edmonton.”
Dhillon added that "they eliminated the 104th Avenue railroad tracks and created an entertainment district, restaurants and bars, head offices relocated to the area and condos were created. The only way it could be better is with the Edmonton Oilers winning the Stanley Cup.”
Dhillon said he has never met Katz but describes him as “the next great champion to come out of Edmonton after Wayne Gretzky. It was a major undertaking for someone to spend billions of dollars during headwind times and create this whole environment.”
Others say the development has revived the area. “Edmonton has seen the majority of its growth over the years in suburban markets, often closer to the city's industrial and retail jobs,” CoStar Real Estate Market Analyst Paul Richter said in an email. “The Ice District development draws residents back to the core. It brings people downtown for events, and more people downtown is a safer downtown. It is now considered a model on how to build out a sports-focused, mixed-use development.”
The projects have helped the Oilers to rise in valuation to $1.85 billion, the seventh highest in the NHL, as revenue rose to US$281 million in 2023, to tie for the top spot with the Toronto Maple Leafs, according to an analysis by Forbes. It notes the Oilers had the lowest revenue of any NHL team two decades earlier, at a time when the team was valued at just $91 million. Katz is now listed as the 637th wealthiest individual in the world with a net worth of US$4.9 billion, according to Forbes.
Other Hockey Developments
The Oilers and Panthers Stanley Cup matchup has been a series of contrasts, pitting the league’s northernmost team versus the southernmost. The nearly 4,090-kilometre distance between the two cities is the largest between any two cities in a Stanley Cup Final.
The contrast extends to their urban settings, as the Panthers’ home, the Amerant Bank Arena, sits in Sunrise, Florida, a 50-kilometre drive from downtown Miami. The Panthers' arena is now 26 years old and has not attracted the same sort of adjacent development to the nearby area as seen in the Ice District. While it does benefit from its location next to Simon Property Group's Sawgrass Mills, one of the largest shopping malls in the U.S. and one of the most visited attractions in the state of Florida.
Meanwhile, the success of Edmonton's Ice District has not gone unnoticed in Calgary, Alberta’s biggest city, where the Calgary Flames are working on a similar script. The Flames and Oilers' have a major rivalry.
Last year the Flames and government partners signed on to create a $1.22 billion hockey district in Calgary that would include an event centre, an arena, parking, enclosed plaza in a section of the downtown Rivers District dubbed the Culture and Entertainment District.
The city of Calgary is putting up $537 million for the arena the Flames will lease for 35 years at a cost of $750 million over that time. The province of Alberta is set to cover $330 million in infrastructure costs and the Flames ownership group, the Calgary Sport and Entertainment Corp., plans to pay the remaining $356 million.
Calgary's 18,000-seat arena is expected to be ready for the puck to drop in 2026 or 2027 and will sit a short distance from the site of the Scotiabank Saddledome, the 41-year-old arena set to be demolished as part of the project.
The area near the Calgary arena is slated to contain other real estate elements, including a residential component that could bring 8,000 new residents to the area. The city of Calgary indicates on its website that the last permits are expected to be issued soon, with construction expected to start later this year.
Meanwhile, the Ottawa Senators, another Canadian NHL team, is aiming to build a new arena in its downtown core following Michael Andlauer's purchase of the franchise last year for approximately $1 billion.
Andlauer, a trucking magnate who emigrated from France via Montreal, has shown interest in a long-discussed project to move the team from its current home in Kanata, 25-kilometres west of downtown Ottawa to the downtown core.
The story was updated on June 16 to reflect the Oilers were down 1-3 in the series as of Sunday.