RX2: THE ARENA DEAL TAKES A POSITIVE STEP

Jason Gregor
July 22 2010 12:37AM

At 1:30 yesterday afternoon, Mayor Stephen Mandel addressed the near capacity audience at a hearing on the proposed Downtown Arena, depicted above in a crudely drawn 2008 mockup from an article outling the equally crude plans by OilersNation own Wanye.

Mandel tried to lighten the mood to start the afternoon's proceedings announcing “for those who haven’t been here before there is no clapping, no cheering or screaming. This will be a very interesting afternoon. Let’s go.”

I’m sure he didn’t expect it to last over four hours, but the Downtown Arena is a hot topic and there were lots of questions. John Karvellas, executive vice-president and general counsel for the Katz group did most of the talking and answered the majority of the questions, but Daryl Katz did address the Mayor and councilors right away.

“I know we haven’t always made it easy and I’ll be the first to apologize for that,” stated Katz in his opening statement. Katz surprised me with how passionate he was when he spoke. I sensed he truly is proud to be an Edmontonian, but he also has a goal to make this arena and surrounding entertainment district world class.

He mentioned that he was approached by the city in April of 2008, before he officially owned the Oilers, about a downtown arena and he has been focused on that ever since. He then committed to putting $100 million towards the rink and another $100 million towards the entertainment district.

I thought Katz was well-spoken and passionate and I bet if he addressed the fans once or twice a year that would help his cause. He doesn’t like the spotlight, and I respect that, but he owns a team that in his words, “Is a major part of the identity of Edmonton ,” so he needs to needs to realize that the fans want to feel like they know the man who runs this “Identity”.

He also mentioned the Oilers would sign a location agreement, meaning the likelihood of them leaving the city is minimal.

However, later in the proceedings Karvelles stated the Oilers and Oil Kings would not play in a refurbished Rexall Place . Their lease ends in the fall of 2014. Ted Tanner, executive director of real estate development of AEG opened up with a promotional video of AEG voice by Morgan Freeman.

It was meant to excite you and make you feel that AEG can build an arena, and the surrounding area, so exquisite that the entire world would want to come see it. The Staples Centre in LA and O2 in London were their prime examples in the AEG portfolio.

No doubt these are world class facilities, and if Edmonton ends up with something similar we’d be pretty ecstatic. The references to hosting the Grammys and being part of great movie production were off-base for this hearing, and I thought the video didn’t add much to the overall conversation.

The other contentious topic brought up by the Katz Group was how the Oilers currently don’t receive any non-hockey revenue at Rexall Place . They are the only NHL team with this agreement and noted this is a major reason why they have lost millions the past few seasons.

Reports suggest they lost four million last year, and then an additional three million went to the NHL subsidy program.

QUESTIONS AND ANSWERS

After the Katz Group was done their presentation each councilor had five minutes to ask questions. Jane Batty went first followed by Don Iveson. Batty showed her hockey knowledge and gave Katz the Lady Byng award for his generous commitment of $4 million (they included his original purchase of the team).

Her questions asked for more clarification on certain points, but Iveson came out swinging. He asked why this couldn’t be privately funded like the previous four arenas that were built in Canada . Bob Black, executive vice-president of sports and entertainment for the Katz Group informed him that only Toronto made that model work, while in Montreal , Vancouver and Ottawa the original investor suffered massive losses. “So you are asking the city to take on most of the risk,” replied Iveson.

I think it is imperative in this process that the city asks the tough questions. I’m in favour of a new facility, and I believe we will get one, but the city needs must do their due diligence and investigate every turn.

A FAIR DEAL. IS THERE SUCH A THING?

My one concern is the thought process that we need a deal that is fair. What constitutes a fair deal?

I am always interested in the notion of “fairness”. Do you think 100 people could ever agree on what is “fair?” Or would fair have everything to do with your point of view?

Many who oppose the arena, and even some who support it, keep stating there has to be a fair deal. “If Katz puts up 25% of the arena cost, then he should only get 25% of the revenue,” is a statement I’ve heard on my show numerous times the past few months.

In a very general and simplistic fashion that could be considered fair, but I don’t think it is that simple. What is the true value of the Oilers to Edmonton? Can we put an accurate value on how much having an NHL team helps the economy? I’ve yet to see an exact report, but if you ask people in Winnipeg they say it is significant.

Some think it isn’t fair if Katz makes too much money off of this deal, but what is too much.

The fact is Katz owns the Oilers. He paid $200 million for them and he has the right to make as much money as he can.

That is how it works in our capitalist society.

Some of you will say that is fair, while others will claim it isn’t. And what is this automatic assumption that business is unfair, always takes unfair advantage of people, and if you have made a lot of money you must be a crook. What’s up with that? This thought process really stumps me.

I honestly believe if Katz addressed the fans they would naturally trust him more, and after listening to him today I think he would come across just fine once or twice a year. I don’t think he has to be front and centre all the time, and it isn’t in his personality to do so, but if he had done so in the past I guarantee some fans wouldn’t be so hesitant to believe in his downtown arena vision.

FAR FROM OVER

Near the end of the hearing on Wednesday, City Council agreed to enter into negotiations with both the Katz Group and Northlands on the financing and operations of a Downtown Arena and entertainment district. However, these discussions must exclude increases in property taxes.

Council also informed city administration to set up a community consultation process and prepare a report on the financial impacts the new downtown site would have on Northlands. And Northlands will be allowed to respond to this report at a future hearing.

HOCKEY SNIPPETS

  • Oilers netminder Nikolai Khabibulin’s court case was postponed again on Wednesday.  He and his agent have two options now. They can stand before a judge with no jury in late August or wait until September 29th and face a jury. All this does is muddy the goaltending waters of the Oilers. Regardless of what happens in his case, the probability of both Jeff Deslauriers and Devan Dubnyk coming to camp seems likely.
  • And who was the arbitrator in the Clarke MacArthur arbitration ruling??? MacArthur was granted a one-year, $2.4 million contract after a scoring a career-high 16 goals and 35 points. One year with 35 points gets you $2.5 million? Was Mike Milbury ruling on this case? Gilbert Brule tallied 17 goals and 37 points last year, and he is two years younger than MacArthur. I bet the Oilers try even harder to get him signed before his August arbitration date, unless they want to pay him $2.5 million or more.
  • And I wonder what Mason Raymond is thinking right now. The Vancouver winger goes to arbitration on July 26th. He tallied 25 goals and 53 points last year. If this ruling is any indication he’ll be worth $3.6 million. Absolutely ridiculous.
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One of Canada's most versatile sports personalities. Jason hosts The Jason Gregor Show, weekdays from 2 to 6 p.m., on TSN 1260, and he writes a column every Monday in the Edmonton Journal. You can follow him on Twitter at twitter.com/JasonGregor
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#1 rubbertrout
July 22 2010, 07:59AM
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@-30-

So you're a hockey fan who doesn't care if Edmonton has an NHL franchise yet you are posting on an Oilers fansite? Strange.

RX1 is a dump. Downtown Edmonton is a dump. Trying to do something about both in one fell swoop (at an additional cost of $50M as per hands mcdangles) seems like a pretty good idea to me.

Honestly, people will bitch about anything and everything.

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#2 Archaeologuy
July 22 2010, 10:35AM
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There's a lot of whining about money, serious economists this, capitalist that, studies have whatever.

Personally, I dont think this is going to be about tracking money in vs money out. This is about quality of life in the city and branding Edmonton.

The Oilers are part of the city's identity, at home and abroad. When the Oilers play in New York they bring the City's brand with them. There are people in New York, Chicago, and Los Angeles that see the name Edmonton, Edmonton, Edmonton in their Newspapers and on their TVs every time the Oilers come to town. This is free advertising for the city of Edmonton year in and year out. I honestly dont know the monetary value for that kind of Ad campaign that would keep Edmonton in the Global consciousness. The Oilers say they need a new arena, I think most people agree with that. If the city can help fund it then I think it's in their best interest.

At home, the citizens benefit from getting a new entertainment complex. Sure the Hockey team is better suited to be around for another 25-30 years but other entertainment options open up as well. More concerts come to town, more trade shows, more restaurants and other businesses open up. It's also a prefect excuse to keep expanding public transportation like LRT lines.

Not all benefits need to be in dollars and cents in order to be worth it. I get no money from Parks, I get no money from museums and historical sites, but I want Edmonton to maintain them and add to them. I see a new Arena fitting into the same category as a Park or Museum and less like a proper business venture, and that might be hard for some people to swallow.

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#3 Just saying...
July 22 2010, 11:30AM
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I am really surprised by some of the comments that have been posted. I thought, of all places, ON would feature comments of people who are all for this development, but some of these are disappointing to read.

Just trying to think of this logically. The city recently invested 'a couple' million into the new art gallery, and into the new Churchill Square, in an effort to ravaamp the city's downtown. Both look pretty cool, and Churchill Square does host a lot of different events.

That said, would it not absolutely be worth the 200-250 mil for the city and the people of the city to invest in not only a home for our hockey team, but also a new downtown development? Currently each Oiler game attracts around 16,000+ people - even last season, when times were rough (between economic woes and our 30th place team..) and I don't see that number going down at all, especially with how excited hockey fans are to see the likes of Hall, MPS, Eberle and the reinvention of Oiler hockey.

Now, for the most part, people who make a night out of Oiler games, concerts, or just being downtown, often go for dinner, go for drinks ... and lets face it, there isn't a lot within walking distance from RX1...

So with this new arena and development, there will be food, drink, shopping and an exciting new environment that will almost guaranteed be used by more than those 16,000 people every week. I'd like to know when our lovely art gallery has 16000 people at it during the week.

I think this arena development is simply necessary! It'll be huge for this rebuilding Oilers team, it'll be a huge part of the city, and it'll be a huge for Edmontonians.

Personally, beyond all other feelings as a diehard Oiler fan, I think this will rejuvinate the city center and give Edmontonians something to be proud of in our rather lackluster downtown.

Just saying..

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#4 Mess
July 22 2010, 01:14AM
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Fist! and Fist ever.

Lets hope this arena happens. Downtown Edmonton is a wasteland compared to Calgary or Vancouver. Edmonton needs a vibrant downtown to offset the "mall".

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#5 PhillipSmithson
July 22 2010, 01:42AM
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The biggest thing needed to get a new arena/entertainment district in Edmonton is guaranteed revenue from more than just the Oilers. Other cities such as Vancouver, Montreal and Toronto are larger population centers and can easily fill their venues.

Thankfully no one has compared the situation here compared to U.S. cities. State laws there are very different. There these large arenas are subsidized and given tax benefits to encourage developers to build in their cities, which is a lot different than here.

Should tax payers foot the bill, no. But I like the percentage idea, whatever percentage an investor puts in is what they get in revenues (less operating cost) per year. IE: Katz puts up 200 mil. out of a 1 billion dollar building cost (20%) then he gets 20% of the revenues less the annual operating cost. That way if the City of Edmonton puts in say 30% they then have income coming in each year to go towards the debt of the building. Find investors to put in money and offer back revenue payouts annually. (Who knows who you can find, there are quite a lot of 50 million Lotto Max winners floating around recently..)

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#6 mattyfinch
July 22 2010, 01:56AM
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Any retard that sits at home and thinks for one second that the 450 million to this rink is a waste of money needs to simply put their NDP hats on tighter and read Karl Marx again.

FACT: The oilers will not last past 2014 in Edmonton without a new arena. google Quebec City and Winnipeg.

FACT: As much as i LOVE the greyhound bus stations and the empty lot ajacent to it, This new project would revitilize downtown Edmonton, not only for that section, but would give a new direction and business model going forward for an entire rebirth of the downtown core.

FACT: This is OUR TEAM. Who the Eff are we to have gone through all the crap we have since peter puck left only to pinch our pennies now and let the team leave in vain. Day 2 after this team leaves, all the dead beat idealists that try to block such a business deal like thios arena will be thick in the throat and thinking twice.

FACT: Charge a stupid 5 dollar fee on my ticket. What do i care, ticketmaster already charges like 3 times that, and i don't see them stepping up to fund the arena.

Simply put, this needs to happen. Stop thinking about OMFG MY PROPERTY TAXES WILL GO UP 4% NEXT YEAR!?!?!?!, they will anyways, for some stupid project that will take 10 years to complete (cough cough anthony hendey) and will cost millions more to maintain once done. Let the increase next year and the years after MEAN SOMETHING. Id much rather have this debate again in 30 years when the new building is outdated, then sit crying in my oilers jersey 9 years from now like every Jets fan in winnipeg subjected too moosehead games, ugly women, and a football who won the grey cup.... uhh... when?

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#7 Kenmcc
July 22 2010, 02:47AM
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Hi Jason or other knowledgeable sports person,

I watched all of the proceedings on TV. Obviously a handful of counsellors believe their job is to represent Northland's interests first, and the citizen's interests second.

What or who is "Northlands". Are they a corporation? Are they an elected body? NAre they a not-for-profit chariy? How did they come to hold so much power over our elected counsel? Who's backing them? It was discouraging to see the original motion to get amended to include Northlands in the negotiations

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#8 hands mcdangles
July 22 2010, 03:02AM
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Cost of building a new arena is 400 million. If you take out the 100 million Katz is offering, that leaves 300 million. Cost of a rexall renovation with no katz support is 250 million

In the end the city would save 50 million to reno rexall.

Also, shouldn't the provincial gov be pitching in some of the revenues from the proposed casino?

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#9 russ99
July 22 2010, 05:23AM
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I really don't get why Northlands interests are being protected here.

Is Northlands putting any money into the arena?

Is Northlands putting any money into downtown redevelopment?

Besides, if the Oilers move downtown, Rexall is still a viable venue for what Northlands does. They'd only have to deal with competition, just like in every other market.

Seems to me that the Katz group is going well past what is expected of ownership to get something done, while Northlands is resting on whatever grip they have in the community.

Just hope the city realizes what's going on before they end up in bed with Northlands and no hockey team.

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#10 Old Dutch Snack Attack
July 22 2010, 07:08AM
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"FACT: The oilers will not last past 2014 in Edmonton without a new arena. google Quebec City and Winnipeg. "

I doubt it. If the NHL won't let the Coyotes leave Phoenix there is no way Katz can move the Oilers from Edmonton. I call a bluff on this threat.

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#11 Poo Czar
July 22 2010, 07:18AM
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@mattyfinch

"FACT"

You keep using that word. I do not think it means what you think it means.

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#12 Gregors dirty 'stash
July 22 2010, 07:50AM
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Northlands is a community based not for profit organization owned by the city, of course they are going to be in on these discussions.

The thing that is a bit of a head scratcher is that the city would have to foot the bill for the, renovations of Rexall. (If that were to Happen.)

Apparently the current location of the arena is a better location than the one by the Casino down town, according to the AEG, as mention by sexy Linda Steele last night.

So what is Katz and the city can come to some sort of Agreement to build the new facility there, tear down RX1 and make that this new sexy district.

Please feel free to criticize me!

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#13 Alex Hemsky
July 22 2010, 08:08AM
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Am I the only one who laughed at the explanation on how capitalism works right after discussing just how much government money Katz gets for his arena?

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#14 gretzkycurry
July 22 2010, 08:20AM
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Old Dutch Snack Attack wrote:

"FACT: The oilers will not last past 2014 in Edmonton without a new arena. google Quebec City and Winnipeg. "

I doubt it. If the NHL won't let the Coyotes leave Phoenix there is no way Katz can move the Oilers from Edmonton. I call a bluff on this threat.

Bettman doesn't love the Coyotes just because they're his special project. Gary needs to keep a team in Phoenix if the NHL ever wants to have any semblance of a lucrative TV deal like the other major leagues have. Phoenix is one of the major television markets in the US (#14) and they are a regional anchor for the southwest states. If you lose Phoenix, that's a big gaping hole in viewership when you go to the table with NBC/Fox/ESPN etc.

Gary talks a good game about protecting canadian markets, but remember Gary is employed by the owners - most of whom like making money.

Protecting canadian TV markets like Edmonton likely won't bring out the bulldog in Gary like the Phoenix situation has.

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#15 Crackenbury
July 22 2010, 08:44AM
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Here's a history lesson: "Understanding the potentially far-reaching implications of the venture, the City of Edmonton, and the provincial and federal government became funding partners for the Coliseum by providing grants, land use, lottery funds, and other forms of support. All of these relationships facilitated the momentous task of bringing the Coliseum to life."

I've lived in this city my entire and am actively involved in the business community. There was a time in our not to distant past when Edmonton was seen as a progressive business oriented city, even ahead of Calgary in that regard. Government understood that to attract and retain businesses and people you had to provide an environment where they could succeed.

I'm not sure of the turning point, of when Edmonton lost it's focus on attracting and retaining big business. Some will point to Jan Reimer, but that is giving her far too much credit. I think the biggest sign of Edmonton losing it's business focus was the movement of Shaw head offices to Calgary.

It seems odd to me how the city can spend nearly 100 million on a non-revenue producing art gallery with little public opposition, but talk of participating in revitalizing an entire area of the city through development of an arena district gets the collective blood of the city boiling.

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#16 Ryan14
July 22 2010, 09:05AM
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-30- wrote:

The best place on the internet to get balanced views on a billionaire asking for a handout for a new hockey arena? Hardly.

Jason, firstly thank you for the thought out and reasoned discourse on the arena issue.

You're quite the opposite of the new Brian Hall, aka Bob (covert Oiler pr guy) Stauffer. Stauffer was once the best guy on sports talk radio in Edmonton. Boy has that ever changed in the last year! He's become as bad an apologist as Dan Tencer for everything Oil.

Back to the issue. Like one of he alderman said yesterday, what did we learn today that we didn't already know a year ago? Who asked hardball questions except for Anderson and Caterina.

Until yesterday did everyone believe the land would be paid for by Katz? It seems that taxpayers are on the hook for that too.

The Katz Group is a private company, when they're questioned on being profitable as Forbes Magazine says, they deny it. Nobody can prove different because their books aren't public.

Next time I want a handout, I'll drag my family along with me to gain the sympathy vote. Smart eh?

Let the Oil move or try to. I am fed up with billionaires asking for public assistance for something that will benefit them far more than it will ever benefit the public.

Aside from hockey fans, who really cares if we have an NHL franchise? I don't and I enjoy hockey.

2014? I look forward to see where the Oilers and Oil Kings will play. I call bull***t on that bluff.

-30_

"Aside from hockey fans, who really cares if we have an NHL franchise? I don't and I enjoy hockey."

maybe all the business that indirectly depend on the Oilers?

Or all the charity organizations that the Oilers started/help?

Maddox Flinn might care about the Oilers.

A city, that outside of the Oilers, have nothing (Sorry city council, the U of A and Oilers are edmonton, not Northlands)

What a horrible, narrow sighted comment.

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#17 OilersNinja
July 22 2010, 09:08AM
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Wayne's artistic renderings are the talk of the town once again....Bravo!

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#18 Sandy
July 22 2010, 09:11AM
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In the early 80's Triple Five asked Jan Reimer's Council to give concessions to build the world's largest mall on the rail yards connected to their "Eaton" Centre, and they said no deal so Triple Five said fine and moved to some farm land on the out skirts of town, effectively moving the down town to 170th and killing down town for the next 20 plus years. This deal could fix that blunder, make the city's down town something to be proud of!

Gregger, I agree with chat on your show yesterday, councilors connected to Northlands should obstein from all discussions as a conflict of interest.

Go Oilers Go

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#19 Soft Hands McSteeley - FIST Movement
July 22 2010, 09:25AM
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1000000% agree that Northlands board members who sit on council should not be part of this process. That fact that they still are is a complete joke.

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#20 bdaZZler
July 22 2010, 10:05AM
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This city is full of deadbeats! A born and raised Edmonton Billionaire provides a vision for the future, and all we hear is old people complaining about their tax money.Hockey would only occupy that entertainment complex 42 days out of the year. It's the rest of the days that are important. I am a 28 year old who has watched all my childhood friends leave Edmonton for other places because this city is BORING. Our councillors would rather spend money on "MUSICAL TRASH CANS" then invest in revitalizing downtown. People on hear comment that the tax money should be used for cleaning up our city, well maybe if the younger generation had something to occupy themselves with around here it wouldn't be so bad

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#21 Zamboni Driver
July 22 2010, 10:13AM
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@bdaZZler

Well there ya go.

Not only would a new arena revitalize downtown, it will stop litter!

I think we can pretty much call this issue settled, can't we?

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#22 Adam
July 22 2010, 10:58AM
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@Tyler

Well I've been pretty lucky, and I have been able to sit in more than a few economics classes on this very issue, and I would have to say that they generally would disagree with your base assertion (that NHL teams economic value is low). In fact the actual conclusion that an economist would give you is that, for the city as a whole, the economic value of a team is relatively small, the economic impact of said team is actually very large for the area around it, and the businesses directly associated with it.

Actually most of the classes came to the conclusion that a downtown arena would be a good investment for the city, as it would refocus the capital that currently flows around Northlands into the downtown area. When this happens, the city will see increases in investment for both business and housing developments in the arena district, which is undoubtedly good for downtown and the City of Edmonton.

"This is pretty much tantamount to an admission that it's a terrible financial idea and only works if the City absorbs a huge loss."

This is tantamount to a gross oversimplification of both the economics surrounding the issue of the creation of an arena district, and the statment by Bob Black you quoted. What was actually meant by that statment is that it is unwise for a single investor with limited capital for investment to wholly fund a project of such magnitude. The city can generate several times the capital that Katz can, and thus the risk that the city would take on inorder to provide a certain percentage of the capital to the project is lower than what it would be for Katz (which if he funded the whole project would cost about 1/3 of his current projected net worth [read: a lot of money]). The current plan provides the city with a revenue stream from the arena district, is it not fair to expect that if the city is going to make a profit that they to should take on some of the risk from the project?

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#23 Chris.
July 22 2010, 11:08AM
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@Tyler

I can't comment on the findings of all academia... I can only comment on personal experience: and it is very similar to what Crash is saying.

During the lockout, my wife and I didn't fuel up the truck, pay a babysitter, commute to Edmonton and grab dinner 20- 30 times before/after an Oiler game. During the lockout we didn't attend other events around the city... Instead we used that money to take the kids to Disneyland.

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#24 Chris.
July 22 2010, 11:20AM
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On an even more insane note:

I grew up in Lethbridge, and when I graduated high school, I moved to Edmonton with a couple of friends to attend the U of A...

Q- How is that insane?

A- We did no research comparing the U of A to the University of Calgary... We chose to move to Edmonton because we were (and are) Oiler fans. (That truly was the deciding factor)

To this day, all three of us live, work, and raise young families in the capital region... The ONLY reason this happened is because all three of us were children of a Dynasty and wanted to be a part of the City of Champions.

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#25 Sean John
July 22 2010, 11:53AM
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@ubermiguel

it is not just be the 'benefit of Katz'. All of Edmonton, even non-hockey fans, benefit from having an NHL franchise. this is not a pulp mill or widget factory where only the owners, customers and workers benefit. What is the price of community moral and pride? Ask Winnipeg.

Does anyone's tax dollars go to everything they support? Do you need housing for the homeless? Try complaining about the costs for that one.

Come Edmontonians!! Step up to the plate and be go-getters and can-doers, not selfish, boring, short-sighted hicks.

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#26 @Oilanderp
July 22 2010, 12:11PM
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Chris. wrote:

On an even more insane note:

I grew up in Lethbridge, and when I graduated high school, I moved to Edmonton with a couple of friends to attend the U of A...

Q- How is that insane?

A- We did no research comparing the U of A to the University of Calgary... We chose to move to Edmonton because we were (and are) Oiler fans. (That truly was the deciding factor)

To this day, all three of us live, work, and raise young families in the capital region... The ONLY reason this happened is because all three of us were children of a Dynasty and wanted to be a part of the City of Champions.

Insane? How about the fact that I am planning a permanent move from Victoria, B.C. to the city of Edmonton, A.B.. Victoria RARELY drops below -1 even in the dead of winter, and I am trading this in for a -30 dry chill? THAT'S insane! What justifies this move for me? The Edmonton Oilers. That's it - there is no other reason. I'm not moving there for a job. I'll find one once I get there (hopefully). I have no family or friends there. All this simply because I was a "child of the Dynasty". Friends and jobs can be found anywhere, but the Oilers are in Edmonton.

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#27 mike
July 22 2010, 12:30PM
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No idea whether anyone assemble a package that leaves non hockey revenue with a Katz/AEG consortium WITH no impact the city taxes. To me that's the critical question and no clue what Northalands has to do with that. Unless Northlands is ready to assemble an alternate downtown site, don't see how they even enter the discussion. Katz kicks in $100 M + levy on tickets + levy on his redev properties. Northlands kicks in?

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#28 Wanye
July 22 2010, 02:29PM
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I think this is the most intelligent debate about the arena I have read anywhere.

As an idiot, I appreciate the banter.

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#29 Deep Oil
July 22 2010, 10:45PM
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Woodguy wrote:

It interesting that Katz's proposal seems to coincide with what happened in San Diego the most.

From the paper:

"PetCo Park was built for $411 million with San Diego responsible for $169 million and the Center City Redevelopment Corporation – a public corporation – responsible for an additional $132 million. The real estate development guaranteed by the Padres’ owner, John Moores would generate sufficient new tax money to retire the bonds supporting the public sector’s investment. The Padres, through their real estate development subsidiary had invested $2.02 billion by 2006 and other investors had spent $1.46 billion. A public investment of approximately $300 million had produced almost $3.5 billion in private sector spending for real estate development."

You wouldn't see that size of development in Edmonton, but 1-1.5B isn't unrealistic.

John Moores guaranteed the investment by the city and NGO. If the tax base was insufficient to cover the mortgage, he would pay it.

Katz should do the same.

That is the same 10% ratio as LA LIVE, that OILER GM, I mean radio host Bob Stauffer promotes with his counterpart Patrick LaForge. Note Patrick, your comments on the team 1260 that the Lighthouse Project was approved, was untimely and incorrect, but interesting as Wong was using 100% of his entire money. LaForge also mentioned Columbus and Chicago as vibrant entertainment disrticts that Edmonton needs to compare themselvers to..... alas, both were private projects (columbus under the brownfield tax rebate and United from Dollar Bill Wirtz)

LA LIVE was a 3 billion dollar project with a 50 year bed tax from the hotel district. The city of LA via preferred land pricing, infastructure, roads, sewer, interchange, etc for a 300 million input.

My socialistic approach is more favorable, taking the $100 million for the city, Katz can parlay the naming rights, personal seat license, and the surrounding development property tax base is non active for 22 - 25 years - this means Katz gets $14 million back per annum. City could co - sign the loan for a lower interest rate, and Katz would personally guarantee the balance, this might be a non issue since DK has a mortgage on every visible property he owns.

Note to the Northlands peeps, this ag society is becoming irrelevant, noting that a downtown arena kills the gravy parking revenue, downplaying all other revenue, parking is pure profit many times a year. It appears that some journalists have eluded that Octane is more efficient at running the Indy, and thus will stand a better chance of breaking even, given it's race synergies.

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Excellent interview with Steve Mckeen yesterdy Gregor. The one point that really makes me think is why didn't the City do their homework and get outside help on this?

I now will also be making calls to my current aldermen and candidates to see how they answer the question about the new arena. They don't need to be for the arena, but if they aren't they better be against it for the right reasons.

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#31 thunderbirdiv17
July 23 2010, 08:59AM
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@Sir Wilfred Laurier Heights

not that I think the amount of money I spend when i come up to Edmonton for a game is a lot by any means but here is what I think anyway. I drive up with my family the average cost of hotels for two nights (cause i live five hours away, and need to make a weekend out of my trips) 200-250, cost of my gas 100-150, cost of food while we're in Edmonton 200-250, plus the tickets that I purchase 100-250 (depending on where we sit). Saying all of that on the low side I will spend about 600 in Edmonton while I was there now just say that 1000 people came from out of town approx 600000 that without us OUT OF TOWNERS would otherwise not be in Edmonton. Just a thought and it might not be a ton of money in the grand scheme of things but it is still money.

Build the arena already

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#32 @Oilanderp
July 22 2010, 01:29AM
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I wish Khabi all the best buuuuuuut...... I would shriek in girlish joy if it turned out that the Oil could run with Deslauriers and Dubnyk for a full year next season. Yes, it would help with another high draft pick but more so it would indicate which goalie to keep.

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#33 R.A. Slapshotzky
July 22 2010, 02:19AM
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@mattyfinch

"FACT: The oilers will not last past 2014 in Edmonton without a new arena. google Quebec City and Winnipeg. "

I hope you're wrong for the teams sake.

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#34 Reagan
July 22 2010, 06:53AM
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It seems as if they are still a long way off to figuring this mess out. It doesn't surprise me at all. It just goes to show you that the city and Northlands are not that pumped about the whole deal. If katz were smart he should scrap the downtown deal, and buy some less lucrative land and do his entertainment builing with his own money at a lower cost. He'll receive 100 percent of the profits and get or start a mgmt crew to run the show. No offence to those that think the world of this new arena. But really who wants to hang out in grubby old downtown Edmonton. Revitalization or not, that area is a dumping ground for heartache, vandelism, robbery, theft, hookers, and drugs. How is one arena going to cure ten square blocks of disease? Move the arena to the old air port site, and update that so called race track at the same time!

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#35 -30-
July 22 2010, 07:28AM
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The best place on the internet to get balanced views on a billionaire asking for a handout for a new hockey arena? Hardly.

Jason, firstly thank you for the thought out and reasoned discourse on the arena issue.

You're quite the opposite of the new Brian Hall, aka Bob (covert Oiler pr guy) Stauffer. Stauffer was once the best guy on sports talk radio in Edmonton. Boy has that ever changed in the last year! He's become as bad an apologist as Dan Tencer for everything Oil.

Back to the issue. Like one of he alderman said yesterday, what did we learn today that we didn't already know a year ago? Who asked hardball questions except for Anderson and Caterina.

Until yesterday did everyone believe the land would be paid for by Katz? It seems that taxpayers are on the hook for that too.

The Katz Group is a private company, when they're questioned on being profitable as Forbes Magazine says, they deny it. Nobody can prove different because their books aren't public.

Next time I want a handout, I'll drag my family along with me to gain the sympathy vote. Smart eh?

Let the Oil move or try to. I am fed up with billionaires asking for public assistance for something that will benefit them far more than it will ever benefit the public.

Aside from hockey fans, who really cares if we have an NHL franchise? I don't and I enjoy hockey.

2014? I look forward to see where the Oilers and Oil Kings will play. I call bull***t on that bluff.

-30_

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#36 Dyckster
July 22 2010, 07:31AM
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Old Dutch Snack Attack wrote:

"FACT: The oilers will not last past 2014 in Edmonton without a new arena. google Quebec City and Winnipeg. "

I doubt it. If the NHL won't let the Coyotes leave Phoenix there is no way Katz can move the Oilers from Edmonton. I call a bluff on this threat.

You may be right, BUT, remember, The Yotes are a project originated by Bettman, the Oilers are not. The estemed Commish has a little pride involved when it comes to Pheonix, not so much Edmonton. That could be a factor.

~Besides, why have a team in a hockey hating town like Edmonton, when instead, you could move it to, say, a hotbed like Atlanta?~

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#37 gonadsgo
July 22 2010, 07:35AM
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Katz's worst argument is that the team is losing money in its current state...

4 million dollars is the difference between not making the playoffs and making them. The team could have sold out most of the games and placed 30th without spending to the cap either. If the team was so concerned with money it wouldn't have given one-way deals to guys they don't want to play at the NHL level (Giroux, etc). They also wouldn't have paid a premium to sign a goalie with a cup ring for four years when the goalie they had only wanted two.

When the team is losing only 4 million, it's pretty easy to point at the inefficiencies in running the team. Not a good argument at all.

That said, I'm for building the arena but agree with some of what Gregor discussed yesterday in the terms that fans of the team should shoulder a larger burden than other tax payers, be it in ticket charges, $10 beers at the games, what have you. It's only "fair".

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#38 Gregors dirty 'stash
July 22 2010, 07:54AM
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furthermore the 'yotes = 0 out of 10

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#39 madjam
July 22 2010, 08:07AM
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Solution : Let Katz pay for new arena and surrounding buildings , but give him tax breaks for 10-30 years on those buildings to lessen burden on taxpayers/city . Dell i believe , as an example , paid a dollar in taxes /year from a deal with the city , etc. during their time here . Leaves Katz complete control over all venues to boot .

If city willing to put up $300M , then do it as tax breaks back to Katz over time ? Tax breaks still didn't prevent Dell from pulling out of city , however .

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When the new barn is built what happens to rexall?

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#41 BUCK75
July 22 2010, 08:16AM
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THe ticket tax is reasonable I think. As others have pointed out, ticketmaster takes more thna that. It is fair, users of the facility for concerts, dog shows, curling events, rodeos, or whatever else AEG wants to put into this facility should cover a big chunk of mortgage/interest every year.

I am sick of the Northlands fight. People have the idea that they can renovate RX1 for less money - but it is all public money as well. For over 100 years Northlands has been benefiting the city, they probably still will but maybe it is time for a change. Northern Alberta is always in the news for the wrong reasons, maybe it is time we started building some world class facilities to showcase something other than what environmentalists in the US want to depict us.

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@Gregors dirty 'stash

So if Northlands isn't in on the whole building, what are they really going to do? I'd think losing the majority of the tenants at Rexall is really going to hurt them.

I heard that Katz has to prove he can get more tenants then just the Oilers, isn't the AEG one of the biggest promotional event companies in the world? I'd have to think that getting tenants is a non-issue for Katz.

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#43 Old Dutch Snack Attack
July 22 2010, 08:21AM
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@Alex Hemsky

Exactly. Billionaire owners in North America have a bad habit of turning to socialists whenever arenas and stadiums need to be built.

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@BUCK75

To be honest why doesn't every venue that the city help fund have some sort of surcharge that goes back to the city to help pay it down? Really if you want to go then you should be the one helping pay down the debt.

Any possibility that Northlands gets phased out and Katz takes over?

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gretzkycurry wrote:

Bettman doesn't love the Coyotes just because they're his special project. Gary needs to keep a team in Phoenix if the NHL ever wants to have any semblance of a lucrative TV deal like the other major leagues have. Phoenix is one of the major television markets in the US (#14) and they are a regional anchor for the southwest states. If you lose Phoenix, that's a big gaping hole in viewership when you go to the table with NBC/Fox/ESPN etc.

Gary talks a good game about protecting canadian markets, but remember Gary is employed by the owners - most of whom like making money.

Protecting canadian TV markets like Edmonton likely won't bring out the bulldog in Gary like the Phoenix situation has.

I thought Phoenix was in the top 5 or something, 14th really doesn't seem to be that big of a deal. Who are 1-13? Are there NHL teams there?

Losing another Canadian team would hurt the NHL right now. We are the ones making the most money and cutting cheques for the other teams. Granted Edmonton would just be going to Hamilton so it wouldn't matter. Either way I don't worry about the team moving, just writers digging deep.

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#46 Chris.
July 22 2010, 08:29AM
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Old Dutch Snack Attack wrote:

"FACT: The oilers will not last past 2014 in Edmonton without a new arena. google Quebec City and Winnipeg. "

I doubt it. If the NHL won't let the Coyotes leave Phoenix there is no way Katz can move the Oilers from Edmonton. I call a bluff on this threat.

Bettman is trying to back taxpayers who stepped up to the plate and built a beautiful new facility in the desert (While maintaining access to a huge TV market)

The Winnipeg Jets were in an irrelevent TV market, and the people of Manitoba didn't get an adequate facility built.

If Katz and the city/province can't get a new building in place by 2014: which situation does ours more closely resemble?

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#47 JB
July 22 2010, 08:42AM
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Why the hell does Northlands have to be involved in any way? What do they bring to the equation outside of the fact they currently run Rexall? Jesus, municipal politics at their finest. Must ensure our friends are taken care of.

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#48 offside
July 22 2010, 08:47AM
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Maybe Katz should build the arena in Leduc County by EIA. Makes sense - easy to get to, may draw more fans from the centre of the province, close to the airport which keeps opposing players from driving through dirty Edmonton, lots of room for parking, may entice Edmonton to take the LRT to the airport, and finally, gives the City a big middle finger by not giving a penny of tax money to the City. (Alternative option - build it by the River Cree - about 5 feet away from the city.

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#49 Oil Fever
July 22 2010, 08:49AM
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Hey Gregor, What happens with havebeenboozin's contract if he's sentenced to 6 months??

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#50 Tyler
July 22 2010, 08:50AM
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In a very general and simplistic fashion that could be considered fair, but I don’t think it is that simple. What is the true value of the Oilers to Edmonton? Can we put an accurate value on how much having an NHL team helps the economy? I’ve yet to see an exact report, but if you ask people in Winnipeg they say it is significant.

There are lots of reports - done by actual economists - that say that the financial value to a city of an NHL team is pretty bloody low. Remember the Great Depression of 2004-05, when Edmonton's economy collapsed during the lockout? Of course you don't, because it didn't happen.

Reports suggest they lost four million last year, and then an additional three million went to the NHL subsidy program.

I would be surprised if the Oilers were paying into revenue sharing without making the playoffs. In any event, how much of the loss was interest payments for Katz, who grossly overpaid for the team? Is "WORST RUN BUSINESS IN SECTOR LOSES MONEY" really that surprising a headline?

Bob Black, executive vice-president of sports and entertainment for the Katz Group informed him that only Toronto made that model work, while in Montreal , Vancouver and Ottawa the original investor suffered massive losses. “So you are asking the city to take on most of the risk,” replied Iveson.

This is pretty much tantamount to an admission that it's a terrible financial idea and only works if the City absorbs a huge loss.

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