Oilers Arena Deal Stalled As Edmonton City Council Seeks Solution To Shortfall
The Edmonton City Council in January agreed to contribute C$140M to a new C$480M Oilers arena, but while a "quiet boost in provincial infrastructure funding will pay almost half" of the final C$100M needed to build the facility, some council members now "fear the city could be stuck with the remainder," according to a front-page piece by Gordon Kent of the EDMONTON JOURNAL. Edmonton City Manager Simon Farbrother yesterday said that the city's share of the Municipal Sustainability Initiative was C$3M "higher than expected in the March 7 provincial budget, which would cover annual payments" on a C$45M loan. The Edmonton City Council yesterday "tentatively approved" the arena master agreement with Oilers Owner Daryl Katz. Farbrother said that the increase in cost, "based on population, education property taxes and kilometres of roads, isn’t earmarked for any other project." Along with the C$140M, the city also agreed to put C$125M "from a ticket tax," and the equivalent of C$115M over a 35-year lease from Katz into the project. While the new MSI cash "goes partway toward overcoming the financial gap, councillors put off signing legal papers to complete the project until they clarify the source" of the remaining C$55M. Edmonton Mayor Stephen Mandel said that they "won’t go forward until they have the rest of the provincial money." But he "couldn’t say whether the deal will be dead if the money doesn’t come through, which could stretch into May" (EDMONTON JOURNAL, 4/11).
CLOSING THE SHORTFALL: In Edmonton, Paula Simons wrote the leveraged C$45M could be "construed as the province putting in almost half" of that needed C$100M. That is "certainly how the majority of councillors seemed happy to spin it." Diverting MSI money, which is "supposed to pay for basic infrastructure such as sewer pipes, road repairs, LRT, and libraries, is a disingenuous violation of the spirit of the framework agreement" (EDMONTON JOURNAL, 4/11). Also in Edmonton, Angelique Rodrigues writes arena supporters "looking for closure on the seemingly endless downtown arena debate are left disappointed again." Discussions "began again publicly and swirled around the missing money" after a "lengthy in private session with Katz Group officials," including Exec VP & General Counsel John Karvellas. Farbrother said that Katz Group execs has "stated they will not help to cover the shortfall." Katz Group officials also "expressed concerns that they have yet to secure an extension" of the Oilers' contract with Rexall Place operator Northlands. The team after the '13-14 season would "be homeless until the new arena is complete" (EDMONTON SUN, 4/11).