The St. Albert Steel will have to pay approximately a quarter-of-a-million dollars to leave town, with the number likely to grow depending on the condition of its offices and dressing room.
Wednesday evening's announcement by the Alberta Junior Hockey League (AJHL) that its board of governors had approved the Steel's request to relocate to Whitecourt triggered a series of financial mechanisms that will cost the club roughly $230,000.
"As soon as the league made a new decision, they now owe us money. The document states that if they decide to relocate, it triggers new payments," said Mayor Nolan Crouse.
The first payment is a $100,000 relocation fee that was a part of the agreement, to be paid if the Steel ever decided to leave town. The second total of $129,000 is the outstanding balance due on renovations to the team dressing room when it moved to St. Albert five years ago, which the city had paid on behalf of the Steel. The club was repaying the city for the renovations at a rate of $21,500 per year.
On Thursday, Chris Jardine, general manager of community and protective services, had already drafted and sent a letter to Steel head coach, general manager and part owner Greg Parks to inform him of his financial obligations. He said that, up until Wednesday night's league announcement, the Steel had been in good financial standing with the city.
"In fairness to the Steel, with the exception of what I call ice billing, that is outstanding, all of their accounts are in good order and I have no good reason to believe they won't be," Jardine said.
But Crouse said the city would be taking all necessary steps to make sure the Steel pay what the city is owed. While there are a series of dates that trigger specific payments under the deal between the city and the Steel, the agreement ultimately expires Aug. 31, by which time the Steel is expected to settle their outstanding balances in full.
Crouse added the city does not have a letter of credit on file from the Steel.
"We didn't tuck [the money] up somewhere up front when they moved here. We will still have to rely on working with the Steel and the goodwill we have with them," Crouse said.
Neither Crouse, Jardine or city solicitor Gene Klenke would speculate on what legal remedies that city has available if the Steel default on their payments.
"The city has no intention of walking away from what is owed to us, so we will take every avenue available to us," Jardine.
A corporate registries search performed at the beginning of April shows the Steel have not filed financial statements or a list of directors with the province since 2009. The last entry on the document notes a March 2012 entry that the province was in the process of striking The St. Albert Steel Hockey Society from its registries, meaning it would lose its incorporated status. That means the five directors of the club lose their limited liability and could be sued individually if the club defaults.
Locked doors
Wednesday's announcement by the AJHL automatically triggered a council directive that had been agreed to during an in camera meeting earlier this year, authorizing the mayor to order the Steel offices and dressing room be sealed. That was done at approximately 9 p.m. Wednesday evening.
"We didn't know what was in the dressing room that were city assets," Crouse said. "I think the taxpayer would want us to make sure these assets were protected if they leave town."
By Friday, the city had authorized the return of Steel personnel to the office and dressing room for the purposes of conducting a damage inspection. Crouse said, like any landlord-tenant agreement, the Steel will be responsible for any damages incurred over the last five years, either by repairing them or paying for their repair.
"The stakes are high in this thing," Crouse said. "Understand we left the dressing room five years ago in perfect condition and it has to be left in that condition."
