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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#152 outoftime
July 22 2010, 04:24PM
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@cableguy - 2nd Tier Fan

I'm not surprised by the response. But your argument is silly. The parking, concession and ticket dollars are collected by the company's who run them. The taxpayers of Edmonton recieve a pittance of this or nothing.

And the communities I mentioned all have one thing in common. People who go to events all go home at the end of the day. Unlike someone from Grand Prairie or Fort Mac who stay in hotels, shop, use restaurants etc. I would never expect those people to pay for this.

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#153 David S
July 22 2010, 04:28PM
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Interesting backgrounder on Northlands by Staples...

http://communities.canada.com/edmontonjournal/blogs/hockey/archive/2010/03/22/in-whose-interest-a-look-at-northlands-and-edmonton-s-arena-business.aspx

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#154 cableguy - 2nd Tier Fan
July 22 2010, 04:38PM
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outoftime wrote:

I'm not surprised by the response. But your argument is silly. The parking, concession and ticket dollars are collected by the company's who run them. The taxpayers of Edmonton recieve a pittance of this or nothing.

And the communities I mentioned all have one thing in common. People who go to events all go home at the end of the day. Unlike someone from Grand Prairie or Fort Mac who stay in hotels, shop, use restaurants etc. I would never expect those people to pay for this.

and it is my argument that is silly?

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#155 The Other John
July 22 2010, 04:39PM
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Let me start with I, too, am for a new arena downtown.

Please lets stop with the City Councilors are in a "conflict of interest". That is based on a complete lack of comprehension of what a conflict of interest is. The councilors are appointed by City Council to sit on City Council seats on the Northlands Board set aside specifically for representatives of the City of Edmonton. They are on the Board to ensure that the City of Edmonton's views are always put front and center before the Northlands board. They also report back to council on what Northlands is doing.

Northlands is a not for profit agricultural society that plows any and all profits made from ALL of its operations back into the Northlands facilities. That is, NOBODY, makes a dime of profit out of Northlands. The Northland lands are owned by the City of Edmonton and are leased to Northlands. The City of Edmonton owns Rexall Place. Northlands operates that facility for the benefit of the citizens of Edmonton and the surrounding area (re see: agricultural society).

Northlands pays for all of its other operations by profitably running its various business enterprises. One of the profitable enterprises is Canadian Finals Rodeo and another is the greatly expanded Agricom.One of the ways Northlands paid for the multi-million dollar expansion of the Agricom,which is now a very nice facility,was from profits made by Northlands off of its other profitable businesses (see in part concerts).

To also be precise....Northlands receives no rent money from the Oilers. The only "rent" they get is a specific $2.5 million dollar subsidy paid by the City of Edmonton to Northlands

Now let me repeat that I want a new arena and I would like it to be downtown...somewhere ....but where things get a wee bit troubling is when someone --- in my hypothetical example lets call them ...say... REXALL says "we are the guys to run the new and improved arena because we will do the best job of it": oh and by the way we also want all of the concert business that Northlands has built up over the last 25 years because that would be a "nice" add to our revenue.

It would. If you can get someone else's business given to you. That is great for you. Not so good for the guy that built up the business for the last 25-30 years. But that also sounds an awful lot like confiscating someones business and giving it to Rexall.

Now someone here is going to try and say.....but Northlands can still seek to run concerts out of Rexall....... leaving aside a touch of reality ....New building/old building that is true but the result will be that one City of Edmonton owned building (new arena) will be competing with another City of Edmonton owned building with a peculiar twist...instead of Northlands plowing any profits it makes into the community projects ***(remember not for profit) the profits from the new arena will all go to a private company.

Now back to the repeated references to conflict of interest...... people on the Oiler broadcast...630 Ched...their host, etc should not be commenting about conflict of interest because they are the rights holder of the Oiler radio broadcasts and I suspect that it is the single most lucrative advertising property that CHED sells. so when they talk...you guessed it.....that....that is a conflict of interest.Similarly Bob Stauffer works for ie is a paid employee of the party that is seeking a 300-350 million subsidy from the City of Edmonton .....so when he talks about the arena project that....that is a DIRECT conflict of interest.

Lastly if there is a shortfall in revenue generated from proposed Community Revitalization Levy.....we the taxpayers of Edmonton are on the hook for the carrying charges for $300- 350 million dollars. That could be really expensive today but what happens if interest rates go up to say 8%? Guess Don Iveson doesn't look quite so mean spirited then when he asks legitimate questions about who is to assume the risk of the cost for a new arena?

So lets get back to finding a way to building a new state of the art arena in downtown Edmonton that we can all be proud of. We should, though, quit with the pejorative comments about Northlands, quit accusing everybody else of conflicts of interest and figure how to collaboratively get this special project done.

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#156 Fresh Mess
July 22 2010, 04:42PM
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I think nearly all of us love the idea of the downtown development. The matter of who pays for it and who profits are the sticking points.

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#157 DC
July 22 2010, 04:54PM
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The Other John wrote:

Let me start with I, too, am for a new arena downtown.

Please lets stop with the City Councilors are in a "conflict of interest". That is based on a complete lack of comprehension of what a conflict of interest is. The councilors are appointed by City Council to sit on City Council seats on the Northlands Board set aside specifically for representatives of the City of Edmonton. They are on the Board to ensure that the City of Edmonton's views are always put front and center before the Northlands board. They also report back to council on what Northlands is doing.

Northlands is a not for profit agricultural society that plows any and all profits made from ALL of its operations back into the Northlands facilities. That is, NOBODY, makes a dime of profit out of Northlands. The Northland lands are owned by the City of Edmonton and are leased to Northlands. The City of Edmonton owns Rexall Place. Northlands operates that facility for the benefit of the citizens of Edmonton and the surrounding area (re see: agricultural society).

Northlands pays for all of its other operations by profitably running its various business enterprises. One of the profitable enterprises is Canadian Finals Rodeo and another is the greatly expanded Agricom.One of the ways Northlands paid for the multi-million dollar expansion of the Agricom,which is now a very nice facility,was from profits made by Northlands off of its other profitable businesses (see in part concerts).

To also be precise....Northlands receives no rent money from the Oilers. The only "rent" they get is a specific $2.5 million dollar subsidy paid by the City of Edmonton to Northlands

Now let me repeat that I want a new arena and I would like it to be downtown...somewhere ....but where things get a wee bit troubling is when someone --- in my hypothetical example lets call them ...say... REXALL says "we are the guys to run the new and improved arena because we will do the best job of it": oh and by the way we also want all of the concert business that Northlands has built up over the last 25 years because that would be a "nice" add to our revenue.

It would. If you can get someone else's business given to you. That is great for you. Not so good for the guy that built up the business for the last 25-30 years. But that also sounds an awful lot like confiscating someones business and giving it to Rexall.

Now someone here is going to try and say.....but Northlands can still seek to run concerts out of Rexall....... leaving aside a touch of reality ....New building/old building that is true but the result will be that one City of Edmonton owned building (new arena) will be competing with another City of Edmonton owned building with a peculiar twist...instead of Northlands plowing any profits it makes into the community projects ***(remember not for profit) the profits from the new arena will all go to a private company.

Now back to the repeated references to conflict of interest...... people on the Oiler broadcast...630 Ched...their host, etc should not be commenting about conflict of interest because they are the rights holder of the Oiler radio broadcasts and I suspect that it is the single most lucrative advertising property that CHED sells. so when they talk...you guessed it.....that....that is a conflict of interest.Similarly Bob Stauffer works for ie is a paid employee of the party that is seeking a 300-350 million subsidy from the City of Edmonton .....so when he talks about the arena project that....that is a DIRECT conflict of interest.

Lastly if there is a shortfall in revenue generated from proposed Community Revitalization Levy.....we the taxpayers of Edmonton are on the hook for the carrying charges for $300- 350 million dollars. That could be really expensive today but what happens if interest rates go up to say 8%? Guess Don Iveson doesn't look quite so mean spirited then when he asks legitimate questions about who is to assume the risk of the cost for a new arena?

So lets get back to finding a way to building a new state of the art arena in downtown Edmonton that we can all be proud of. We should, though, quit with the pejorative comments about Northlands, quit accusing everybody else of conflicts of interest and figure how to collaboratively get this special project done.

Very well thought out point of view. I never thought of some of your points like that. All I know is that the Oilers should not be losing money, and they definatley need a new building. I hate going to Rexall so much. If we are paying high ticket prices we deserve a nice building. I don't really care what it takes to get it or who runs it, I pay my taxes and I live in Edmonton, So that's where I want my voice to be heard. There has to be some compromise on all sides to make this work. 2014 is not far away. Lease is up and Katz doesn't have to sign a new one.

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#158 Team Hall
July 22 2010, 05:10PM
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Northlands may be "non-profit" in title, but you can bet that president, CEO, directors, etc, are all making tidy salaries, and I wouldn't be surprised if other "bonus" monies were filtering back to them as well. It is an unnecessary middle man that costs extra money to operate. Taxpayer money. Turf Northlands. Contract it out. It's like the old government run liquor stores. Privatize, privatize.

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#159 The Other John
July 22 2010, 05:14PM
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Dc

Your comments are precisely why I want a new arena.

I just do not believe that Oilers lose money. I simply do not.

I keep hearing equalization payments but if that $4-5-6 million dollar expense forces you into a loss, they would have a ridiculous management structure (and expenses),colossal borrowing charges and inter-corporate charges up the wazo!!

Yesterday repeated references by Rexall to patrnership..... I would say to them if you want me (City)to borrow $300-350 Million for your benefit...I'd like to see your audited books.

City certainly gets to see Northlands books on a yearly basis ......

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#160 Ducey
July 22 2010, 05:22PM
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@The Other John

I appreciate the thoughtful and reasonable way you made your post. It would be swell if Northlands actually was acting like a not for profit but they are not.

They have run around behind the scenes for months trying to poison every stakeholder they can find against Katz. They have a carefully ochestrated media strategy against him. They have Caterina spoiling the well at City Hall every day.

They are absolutley 100% against a new arena downtown.

But if they were actually concerned about the public good and actually wanted to find the best solution for the Oilers and Edmonton, WHY WOULD THEY CARE?

If they were actually interested in what is the best for all of us, they would participate and present options, but they should be happy that Edmonton gets the best facility - whether they run it or not.

Shouldn't they be saying: "We agree with Katz that this or that aspect of the downtown project has merit but here is an alternative you should consider. But after all, you are our bosses so its up to you."?

As for Caterina being in a conflict - well he is clearly biased before the matter even reaches City Hall, and he is on the Northlands Board. If the matter was ever reviewed by a Court, any vote he might make would likely get tossed on this basis. Again, he does not seem the least bit interested in any alternative than keeping the Oilers in his Ward.

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#161 The Other John
July 22 2010, 05:23PM
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Team Hall

A Not for Profit Society in this province has to post their financials with the province annually. No one is allowed to take profits out for any purpose nor are there inter-corporate transfers of any kind allowed.

Your point "privatize, privatize, privatize" may be a wee bit more compelling if the private company here did not have their hand out for a $300-350 million dollar public subsidy.

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#162 The Other John
July 22 2010, 05:35PM
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Ducey

There is no evidence of Northlands poisoning stakeholders against a new arena. There clear preference is to refurbish Rexall. That would not be my preference but there are an awful lot of refurbished homes in Glenora, Valleyview, Windsor Park.

I would like a new downtown arena

It is logical, though, to assume that Northlands do not want some of their more profitable businesses "given" to a private entrepreneur with a subsidized business model. Because without their own profitable businesses how do they pay for the less than profitable other businesses they currently run. I expect that is what some of the more reasonable council members were questioning Rexall about...take away Northlands profitable businesses and what are they left with?

An example is a car dealership: parts and service may be profitable and that offsets loss leaders in sales and an unprofitable body shop.

Here once Northlands profitable businesses are gone, they will be going to City council for much more money to subsidize things like Cap Ex etc

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#163 I ♥ Rexall № 2 ™
July 22 2010, 05:36PM
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So here's the new plan (also known as Operation Replace Cracktown via Burndown):

Step 1 - Set an "accidental" fire at the Casino and Downtown Greyhound Station.

Step 2 - Blame said fire on the degenerates that hang out by said Downtown Greyhound Station (aka the

Step 3 - Decide that the only way to clean-up the fire-tarnished eyesore is to build a new arena.

Rexall № 2!

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#164 I ♥ Rexall № 2 ™
July 22 2010, 05:39PM
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Sorry - I meant to point out that the degenerates I'm referring to are patrons of: http://www.edmontongrandhotel.com/lounge.html, which ironically has a faux-glam website.

Really? The "Grand" Hotel?

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#165 I ♥ Rexall № 2 ™
July 22 2010, 05:44PM
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Please tell me that there are no subsidies for Capital Ex, uncless of course you're referring to the new "Support your Local Charity, not your Local Panhandler" campaign.

I just watched what I thought was a bunch of hobos escapin during a fire drill at Alberta Hospital across 102nd avenue downtown. Want to know what it turned out to be? Some sort of "Capital Ex" Parade.

I couldn't tell if Air-One was part of the parade or rounding up meth-heads.

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#166 Oil Kings 'n' Pretty Things
July 22 2010, 05:59PM
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Jason Gregor wrote:

I’ve yet to see an exact report, but if you ask people in Winnipeg they say it is significant.



I'm kind of hurt. Nobody asked me!

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#167 Oil Kings 'n' Pretty Things
July 22 2010, 06:06PM
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mattyfinch wrote:

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?

Don't get me wrong - I never lived in Winnipeg when the Jets were here, but the Moose play damn good hockey. They were head and shoulders better than the Oilers last year.

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#168 deepoil
July 22 2010, 06:43PM
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The Other John wrote:

Let me start with I, too, am for a new arena downtown.

Please lets stop with the City Councilors are in a "conflict of interest". That is based on a complete lack of comprehension of what a conflict of interest is. The councilors are appointed by City Council to sit on City Council seats on the Northlands Board set aside specifically for representatives of the City of Edmonton. They are on the Board to ensure that the City of Edmonton's views are always put front and center before the Northlands board. They also report back to council on what Northlands is doing.

Northlands is a not for profit agricultural society that plows any and all profits made from ALL of its operations back into the Northlands facilities. That is, NOBODY, makes a dime of profit out of Northlands. The Northland lands are owned by the City of Edmonton and are leased to Northlands. The City of Edmonton owns Rexall Place. Northlands operates that facility for the benefit of the citizens of Edmonton and the surrounding area (re see: agricultural society).

Northlands pays for all of its other operations by profitably running its various business enterprises. One of the profitable enterprises is Canadian Finals Rodeo and another is the greatly expanded Agricom.One of the ways Northlands paid for the multi-million dollar expansion of the Agricom,which is now a very nice facility,was from profits made by Northlands off of its other profitable businesses (see in part concerts).

To also be precise....Northlands receives no rent money from the Oilers. The only "rent" they get is a specific $2.5 million dollar subsidy paid by the City of Edmonton to Northlands

Now let me repeat that I want a new arena and I would like it to be downtown...somewhere ....but where things get a wee bit troubling is when someone --- in my hypothetical example lets call them ...say... REXALL says "we are the guys to run the new and improved arena because we will do the best job of it": oh and by the way we also want all of the concert business that Northlands has built up over the last 25 years because that would be a "nice" add to our revenue.

It would. If you can get someone else's business given to you. That is great for you. Not so good for the guy that built up the business for the last 25-30 years. But that also sounds an awful lot like confiscating someones business and giving it to Rexall.

Now someone here is going to try and say.....but Northlands can still seek to run concerts out of Rexall....... leaving aside a touch of reality ....New building/old building that is true but the result will be that one City of Edmonton owned building (new arena) will be competing with another City of Edmonton owned building with a peculiar twist...instead of Northlands plowing any profits it makes into the community projects ***(remember not for profit) the profits from the new arena will all go to a private company.

Now back to the repeated references to conflict of interest...... people on the Oiler broadcast...630 Ched...their host, etc should not be commenting about conflict of interest because they are the rights holder of the Oiler radio broadcasts and I suspect that it is the single most lucrative advertising property that CHED sells. so when they talk...you guessed it.....that....that is a conflict of interest.Similarly Bob Stauffer works for ie is a paid employee of the party that is seeking a 300-350 million subsidy from the City of Edmonton .....so when he talks about the arena project that....that is a DIRECT conflict of interest.

Lastly if there is a shortfall in revenue generated from proposed Community Revitalization Levy.....we the taxpayers of Edmonton are on the hook for the carrying charges for $300- 350 million dollars. That could be really expensive today but what happens if interest rates go up to say 8%? Guess Don Iveson doesn't look quite so mean spirited then when he asks legitimate questions about who is to assume the risk of the cost for a new arena?

So lets get back to finding a way to building a new state of the art arena in downtown Edmonton that we can all be proud of. We should, though, quit with the pejorative comments about Northlands, quit accusing everybody else of conflicts of interest and figure how to collaboratively get this special project done.

Paragraph 3 is incorrect, Northlands did not pay for the Expo Centre, it paid for a portion while receiving funding from the federal government.

New federal funds for Northlands expansion Sara Ditta, edmontonjournal.com Published: 3:51 pm

EDMONTON - The federal government announced today that it is contributing $25 million to help expand the Northlands exhibition facility.

This funding follows the $50 million that the provincial government has committed over the last few years.

"It's critical funding," said Jerry Bouma, the chair of Northlands. "If Edmonton wants to be a major player, we need these facilities."

The funding will go towards the second phase of the expansion project, which will cost a total of $75 million. Both phases will cost a total of $150 million.

The second phase will provide updated and larger trade-show spaces to the facility.

It will make the Northlands facility the largest exhibition facility in Western Canada and the fourth largest in the country.

The funding is being provided by the federal government's Building Canada plan.

Story found at: http://www.canada.com/edmontonjourna...8-cd2f2e0ea497

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#169 Deep Oil
July 22 2010, 06:48PM
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I ♥ Rexall № 2 ™ wrote:

So here's the new plan (also known as Operation Replace Cracktown via Burndown):

Step 1 - Set an "accidental" fire at the Casino and Downtown Greyhound Station.

Step 2 - Blame said fire on the degenerates that hang out by said Downtown Greyhound Station (aka the

Step 3 - Decide that the only way to clean-up the fire-tarnished eyesore is to build a new arena.

Rexall № 2!

I believe that TKG has an option on the greyhound building already, but while we are on this topic, many have heard this joke after sundown on Saturdays in the west end...... how do you start a flood...... LOL.

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#170 TigerUnderGlass
July 22 2010, 06:57PM
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Woodguy wrote:

Tyler,

You are correct in that the majority of sports facilities have not driven any kind of economic development.

Creating a big building and surrounding it with acres of parking do next to nothing for the neighborhoods in which they exist. Northlands Coliseum is a good example of that.

As you mentioned, such bright minds in this area such as Mark Rosentraub came to this conclusion a while ago.

However, Rosentraub wrote:

"Sports Facilities, A New Arena in Edmonton, and the Opportunities For Development and A City's Image: Lesson From Successful experience.

In this document Rosenstraub uses Indianapolis, Los Angeles, Columbus, Washington and San Diego as positives examples of how Sport Facility development can work in urban centers and spur other development.

The link to the paper is here:

http://www.edmonton.ca/city_government/documents/CityGov/RosentraubReport.pdf

The new paradigm that Rosenstraub discusses seems to work, and is much different than the approaches taken on most facilities over the last 30 years.

I was actually living in San Diego when Petco went up. The project sparked an almost unbelievable rejuvenation to a key portion of the downtown area. Qualcomm does nothing for the area because it's essentially acres and acres of parking surrounded by nothing. Petco is front and center now in a beautiful and well-visited downtown core.

I guess a possible issue in making the comparison is that San Diego is a much bigger market than Edmonton and they don't have winter issues limiting foot traffic to 1/3 of the year.

It's too bad they are having such a hard time negotiating a new building for the Chargers.

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#171 Deep Oil
July 22 2010, 07:00PM
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The Other John wrote:

Dc

Your comments are precisely why I want a new arena.

I just do not believe that Oilers lose money. I simply do not.

I keep hearing equalization payments but if that $4-5-6 million dollar expense forces you into a loss, they would have a ridiculous management structure (and expenses),colossal borrowing charges and inter-corporate charges up the wazo!!

Yesterday repeated references by Rexall to patrnership..... I would say to them if you want me (City)to borrow $300-350 Million for your benefit...I'd like to see your audited books.

City certainly gets to see Northlands books on a yearly basis ......

EIG was spending around $36 million per year and made the playoffs, it was known within the group that a profit in 2006 was higher than $10 million. EIG had very little or no debt at a $72 million USD value, to be fair the dollar was at .80 cents, but that is just a math issue......

Katz paid a premium for the team, with $200 million ($100 million borrowed), added the Capitals, Aquila. Higher carrying cost than EIG.

Katz is now carrying a cap hit max team of $55 million - do the math - their is a loss, especially with revenue sharing - giving monies to the south.

Gold Seats are $250 less discount for season ticket holders, with stanley cup final tickets around $400 a ticket.

Each playoff game was $1 million profit with no labor costs, so monies go to the league.

Bottom line the Oilers are losing money, because they dont play in MAY.

Cap goes up due to increased attendance in Chicago, LA, New York, Pittsburgh., combined with a stronger dollar. A few years ago there were only 7000 people at the United Centre, now it is sold out.

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#172 Woodguy
July 22 2010, 09:27PM
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TigerUnderGlass wrote:

I was actually living in San Diego when Petco went up. The project sparked an almost unbelievable rejuvenation to a key portion of the downtown area. Qualcomm does nothing for the area because it's essentially acres and acres of parking surrounded by nothing. Petco is front and center now in a beautiful and well-visited downtown core.

I guess a possible issue in making the comparison is that San Diego is a much bigger market than Edmonton and they don't have winter issues limiting foot traffic to 1/3 of the year.

It's too bad they are having such a hard time negotiating a new building for the Chargers.

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.

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#173 Ender
July 23 2010, 10:37AM
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JackBauer wrote:

Hell, just email this thread to your counsillor.

What does Ms. Troi have to do with this?

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#174 PabstBR55
July 23 2010, 12:39PM
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I think the optimal outcome for both sides is to have Katz absorb more of the up-front cost of the project, while giving him a break on the operating costs of keeping the team here. That would satisfy two things:

1) Edmonton taxpayers wouldn't feel like they were bearing the burden of the project.

2) The Katz group would be satisfied knowing the annual profitability of the club would be guaranteed.

If Katz wants to invest in an entertainment district too, then let his entrepreneurial self reap the rewards of having taken the risk.

As a taxpayer, I would favour re-furbishing the old arena. As a fan, I want a new stadium.

It is necessary for Don Iveson to go to bat for the taxpayers, however, to make sure we don't get fleeced. My feeling is that Katz wants to build the arena more than the City does. So ... let them figure out something that shields the taxpayers from the dilemma.

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#175 Quicksilver ballet
July 23 2010, 07:07PM
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Where do we draw the line here? The Oilers have been one of the top grossing hockey clubs consistantly since the dollars been above 90 cents. If the Oilers can't make ends meet with the current conditions perhaps they're incompetent (enter top 5 payroll for a 30th place hockey club) If we've failed at all its because the league as a whole has fallen short, not because the Oilers need more cash.

Good thing nobody told Wayne,Mark and Kevin this arena sucked in their days as Oilers or we wouldn't be called the City of Champions. Never have we had so much...and been so unhappy.

I do think this new building will get rammed through and built anyways, it is interesting to see the principles squabble over the future profits. Something just seems unfair when the taxpayers dollars are used... but when there are profits realized its weird how soon the few whom benifit most forget.

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#176 RossCreekNation
July 25 2010, 04:56PM
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@Quicksilver ballet

Good thing nobody told Wayne,Mark and Kevin this arena sucked in their days as Oilers or we wouldn't be called the City of Champions

Maybe because the arena wasn't crappy when Wayne, Mark & Kevin were playing here in the 80's. GTFO.

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