The city says it is in talks with six tenants at the City Centre Airport. The city won't say how much money it might spend to settle any broken leases with tenants.
Officials began the process of shutting down one of the airport's two runways Tuesday morning.
Edmonton Airports says from now through to the fall, work crews will physically alter runway 16/34 by placing barricades, removing lights and painting signage on its surface. The goal is to ensure pilots know the strip is no longer in operation.
Airco has been fighting the city's efforts to close the airport before its 50-year lease runs out. So far, Airco is just one tenant that is refusing to negotiate with the city for a cash settlement that would see them leave early.
"You can't just take the business from where it is now and relocate it and create it somewhere else. Our business plan is based on being in a downtown airport," said Mary Anne Stanway, Airco spokesperson.
Officials maintain the negotiations are confidential, but CTV News has obtained a document suggesting it could be in the tens of millions.
Last year, an internal memo by Edmonton Airports projected the cost at approximately $45 million with another $25 million going to decommissioning land.
Edmonton Airports now says the figure was just an early estimate. But some city councillors are concerned that no one seems to know what the final cost of closing the airport will be.
"Who knows what that numbers going to be at the end of the day," said City Coun. Tony Caterina.
Caterina is concerned that the settlements with tenants could cost millions more than expected. In particular, the documents estimate it would cost about $11 million to settle lease issues with both Stars Air Ambulance and Canadian Helicopters.
"You have to compensate them for business, loss of business if that's the potential, so I can see these negotiations going on for years and years," he said.
Coun. Bryan Anderson believes the city will make money from the development over time.
"The revenue will surpass in my opinion significantly any contamination that has to be cleaned up or lease purchases."
Airco argues that the city will have a difficult time trying to compensate them for a reputation and client base built over 20 years.
"The city will have a huge task trying to figure out how you'll compensate for that," said Stanway.
The city does not have to settle with each and every tenant at the airport as most tenants have different end dates to their leases. Many of the leases will run out in the next five years. It will come down to how long the city plans to let the second runway stay open.
And while there is no word when the other runway will shut down, Indy commitments ensure no closure will happen for at least the next three years.
With files from Scott Roberts
