SBD/October 18, 2012/Facilities

Edmonton City Council Votes To End Arena Talks With Oilers Owner Daryl Katz

Katz sought a C$6M annual subsidy to offset operating costs for the arena
Edmonton City Council members yesterday “shut down arena talks" with Oilers Owner Daryl Katz, and are "considering options that include building the project alone,” according to Gordon Kent of the EDMONTON JOURNAL. Mayor Stephen Mandel said that there has been "nothing to justify Katz’s demand for a $6-million [all figures C] annual subsidy to offset operating costs at a downtown arena, which city staff identified as the major stumbling block to completing a deal." Mandel: "The deal we offer to Mr. Katz was incredibly profitable. I know the numbers and I can tell you he wasn't going to lose money." Mandel supported a unanimous motion to "immediately cease negotiations over jointly building what is now a $475-million facility and look at other ideas, including refurbishing Rexall Place or having the city put up a new arena by itself." But Mandel "cautioned that even if the city constructed an arena, it would still have to negotiate a lease with the Oilers." The final straw "for many councillors was Katz’s refusal to attend the meeting to lay out his justification for extra money." Without a deal, Mandel "couldn't say whether the Oilers will stay in Edmonton," where their lease at Rexall Place expires in '14. Edmonton City Manager Simon Farbrother said that there are "still 15 outstanding issues to resolve before a final deal can be reached." Farbrother said that while 12 can "probably be resolved, the operating subsidy, a proposal to have the city become the anchor tenant in a new Katz office tower, and how to divide $50 million in extra costs are critical issues." Farbrother was not "optimistic that intervention by NHL commissioner Gary Bettman, who helped the two sides reach the tentative agreement at his New York office last fall, would be effective this time" (EDMONTON JOURNAL, 10/18).

NOT GIVING UP: In Edmonton, Angelique Rodrigues reports City Council member Amarjeet Sohi supported the motion to end negotiations with Katz, but Sohi "hopes it doesn’t send a message to Edmontonians that council has given up on the arena deal." Sohi: "My concern is it will send the message that council is breaking off negotiations because that isn’t the case. Negotiations were stopped by The Katz Group" (EDMONTON SUN, 10/18). Also in Edmonton, Paula Simons notes all 13 council members voted to "direct city administration to 'explore potential avenues' and to report back on 'the status of the City’s current, transferable investments in a potential downtown arena project.'" Simons: "Translation? Bureaucrats have been told to investigate the possibility of cutting the Katz Group out of the deal altogether, and letting the city finance, build and operate the arena on its own." City Council members yesterday "showed true political leadership." They "refused to be blackmailed," or to be "held hostage." Council members also "refused to cave into Katz's latest vague and secret demands" (EDMONTON JOURNAL, 10/18). An EDMONTON SUN survey asked, "Who should be held most accountable for the downtown arena debacle?" Katz received 46% of the vote, "equal blame for all" received 34% and Mandel received a 5% tally. The survey also asked if the city should "build its own downtown arena," with 82% voting yes and 18% voting no (, 10/17).
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