Debate Over Proposed Oilers Arena Likely To Center On Funding

The debate over a new arena for the Oilers has "now begun in earnest, raising questions about cost, spinoffs, identity and, most important, who pays," according to David Staples of the EDMONTON JOURNAL. While some Edmonton citizens are "already sold" on the arena, "no small number of Edmontonians are fixated on who will be paying for this megaproject." Some believe in the "notion that the right kind of megaproject can be a magnet for other outstanding redevelopment in Edmonton's downtown." But others "can't see any reason to have the public put money into a project that's going to cost" C$400-500M, meaning Oilers Owner Daryl Katz, the team and the "pro-arena lobby have their work cut out for them." Staples: "Can they come up with such a compelling design that it ignites the imagination of this city? And even then, can they find a way to fund their plans that doesn't enrage the tax-hating, anti-public project faction?" Staples noted public money for "mega-projects is the norm for NHL arenas and for Edmonton projects," as 24 out of the league's 30 teams have had "some public money going into the construction of their arenas," while in seven cases the public paid 100% of the cost. Univ. of Alberta sports management professor Dan Mason said that a city's self-perception "comes into play when it comes to public funding," as smaller cities, "such as Edmonton, might be more likely to provide arena funding because there's a stronger link between the city and the team." Mason said that one method to "privately help the arena is to introduce personal seat licenses." Meanwhile, Mason noted that in "any discussion of funding for arena projects, it's not always easy to tell what is public funding and what is private funding," as in some cases the city will "finance the project, taking out a massive loan to get it built, but the debt payments will be made out of arena revenues, in whole or in part" (EDMONTON JOURNAL, 9/6). The following lists the amount of public and private money in U.S. dollars used to finance the NHL's arenas.

NOTES: * = Arena paid for by team owners, but with $16M in land donated by government. ** = $467.5M redevelopment around arena with $311.5M in public funds. *** = see below.

MODEL ARENA: Oilers President Patrick LaForge said that the Pittsburgh model for developing the Consol Energy Center, "which includes city ownership and casino funding for the construction, is on the table" for the Oilers' proposed arena. The EDMONTON JOURNAL's Staples noted that Penguins' arena is being built with a $31M combined down payment from the team and the local government. Payments on the $321M balance will come from a local casino, a state economic development fund and the Penguins. Edmonton under this model "would own" the arena. LaForge: "I love the Pittsburgh model. It's terrific. We're looking at a number of different options and that would be one for sure." Staples noted LaForge is "studying the model used to fund the horse racing industry in Alberta, which got [C$35M] in 2008 from its take of gambling revenues generated at three casinos located at Alberta horse racing tracks" (EDMONTON JOURNAL, 9/6).