SBD/October 17, 2012/FacilitiesPrint All
The downtown Edmonton arena deal is “hanging by a thread after Oilers owner Daryl Katz refused a request Tuesday to appear in person and tell city councillors what he needs to complete the project,” according to a front-page piece by Gordon Kent of the EDMONTON JOURNAL. Mayor Stephen Mandel said, “I’m not sure where we go from here. … Negotiations are not in good shape.” Kent notes although Mandel has “insisted someone from the Katz Group outline the company’s concerns at Wednesday’s council meeting, which he called a ‘drop dead date,’ Katz sent the mayor a letter that said the two sides are too far apart for that to be worthwhile.” Katz wrote that while he thought the two sides were “making considerable progress in their talks, they were actually going backward, and there isn’t even agreement on basic assumptions about arena finances.” He added that arena cost projections are “higher and revenues lower than expected when a framework agreement was passed last October.” Kent notes Katz “urged Mandel to accept NHL commissioner Gary Bettman’s offer to help forge a deal.” In a closed-door September meeting, councillors “rejected the company’s request for more public money, which apparently included an ongoing $6-million subsidy and talk of tax breaks.” Council member Amarjeet Sohi said that it is time to “explore other options, which could include having the city build an arena without Katz’s involvement.” Kent notes construction of the arena, “now estimated to cost $475 million, is set to go out for bids early next year once the design is mostly finished, although either group can pull out in advance if the estimated price is too high" (EDMONTON JOURNAL, 10/17).
SEEKING A SOLUTION: Katz, in his letter to Mandel wrote, “Before we can sign a 35-year location agreement and invest more than a quarter-billion dollars into a new arena that the city will own ... we need a solution that makes economic sense.” Katz wrote he believes “with more time and political leadership, this project can still be saved” and his “door is open if city administration want to continue our discussions” (EDMONTON SUN, 10/17).
GOING BACKWARD: In Edmonton, John MacKinnon writes the letter is a “message that reverses whatever softening effect was achieved by Katz’s recent public apology, delivered by way of full-page newspaper ads.” For those Edmontonians "still torn between viewing the local billionaire as either a successful businessman with the vision to do something grand for his city or a rapacious, capitalist shark out to leverage every dollar he can from his fellow citizens in the Heartland of Hockey, well, Katz is making that choice mighty easy.” MacKinnon: “The reality is, Katz is both a passionate Edmontonian and unabashed Oilers fan, and he’s a cold-blooded businessman with his eye fixed on the main chance” (EDMONTON JOURNAL, 10/17). Also in Edmonton, David Staples writes, “I’m convinced if Katz doesn’t reconsider and accept this offer, city council should build a downtown arena on its own.” Just because Pittsburgh and Winnipeg “gave sweet deals to their teams, it doesn’t mean Edmonton should.” The city’s job is “to make sure there’s an excellent downtown arena for concerts and an NHL team, to make sure any public financing of that arena is in the public interest, and to ensure the building is designed well so an entertainment district will grow up around it.” With or without the Katz Group, the city “should move ahead on this project.” If Katz and the Oilers “ever left here, 10 other NHL owners would line up to get into this market, but only if we have a new downtown arena” (EDMONTON JOURNAL, 10/17).
The Univ. of Connecticut Foundation yesterday announced that it has collected donations and pledges for 75% of the construction cost of the UConn Basketball Development Center. The university has collected $24M of the $32M needed and will obtain financing for the project to begin construction as soon as possible. Completion is expected to take about 24 months (UConn). The AP’s Pat Eaton-Robb noted the facility will be “built adjacent to Gampel Pavilion on the site where the former football stadium was razed earlier this year.” Plans call for “separate practice courts for the men's and women's basketball teams, locker rooms, weight rooms, classrooms, a sports medicine center and offices for the basketball staff.” The center also is “expected to have a public area to celebrate the history of UConn basketball, and house Husky memorabilia, including the trophies from the three men's and seven women's national championship seasons” (AP, 10/16). In Hartford, John Altavilla reports donors Peter Werth and Mark Shenkman and their families “combined to pledge nearly $7 million to the facility.” Shenkman's previous contribution of $2.5M was “significant enough to have his name placed on the athletic training facility that stands across the street from where the basketball center will be.” Yesterday’s announcement was “one of the early highlights in the tenure” of AD Warde Manuel (HARTFORD COURANT, 10/17).
Nike plans to “invest $301 million in two of its Memphis distribution facilities, add 250 jobs, and in return seek a break in local taxes that would save the company $58 million,” according to Thomas Bailey Jr. of the Memphis COMMERCIAL APPEAL. Nike is making Memphis a "major element" of its business with plans “for a $276 million, 1.8 million-square-foot expansion of its four-year-old distribution center at 3100 New Frayser in Northridge Industrial Park and a $25 million upgrade of its center at 5151 Shelby Drive.” The 250 new jobs would be “added to Nike's existing Memphis workforce of 1,662.” Average pay of the new positions “is $35,000, plus $7,000 a year in benefits.” In addition, Nike is “more than doubling its 1.1 million-square-foot facility in Frayser.” The existing $107M distribution center “opened in September 2008” (Memphis COMMERCIAL APPEAL, 10/16). In Memphis, Andy Ashby notes the Board of Light, Gas & Water Commissioners on Oct. 4 “approved a resolution authorizing Memphis Light, Gas & Water to spend up to $2.5 million for relocating electric distribution and transmission lines to allow for the expansion” of the new Frayser Blvd. facility. MLGW CEO & President Jerry Collins said that the company over the next several weeks “will enter into a contract with Nike in which the company will pay for the improvements.” Nike leases “an 812,697-square-foot building at 8400 Winchester Road for a returned merchandise operation.” It also operates “a distribution facility at 5151 E. Shelby Drive, a 1.3 million square-foot building, as well as a 455,700-square-foot building at Memphis Industrial Park.” Cushman & Wakefield Commercial Advisors Asset Services Exec VP Mark Jenkins said, “It just validates Memphis as a player and I think it’s going to continue” (MEMPHIS BUSINESS JOURNAL, 10/12 issue).