SBD/October 17, 2012/Facilities

Edmonton Arena In Doubt After Oilers Owner Refuses To Meet With City Council

Construction of the proposed new Oilers arena is now estimated to cost $475M
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).
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