October 20 2012 09:33AM
Photo: y2kcrazyjoker4/Wikimedia/CC BY-3.0
The Edmonton arena deal isn't dead. I know it looks bleak right now, and frankly the negotiations surrounding this whole thing are starting to make the NHL and NHLPA look good, and that's bad, but this isn't the first time similar groups have butted heads over massive building projects.
Here is an example of another team's arena negotiations that may give heart to Oilers fans - the New Jersey Devils and the construction of the Prudential Center in Newark, New Jersey.
Most of us don't really follow the Devils. They're an Eastern Conference team associated with stultifying defence and a GM that we love to loathe because he is so damned much smarter than the rest of us. I think many fans are vaguely aware of the team being close to bankruptcy. As for the building of the Prudential Center from 2002 to 2007, it kind of got lost in the shuffle of news of two Alberta teams' deep playoff runs, the hype surrounding Sidney Crosby's first few seasons in the NHL as well as the Pittsburgh arena deal, and countless other distractions.
Here's the thing, the river of antagonism that is currently flowing between the Edmonton City Council and the Katz Group hasn't yet reached the level that existed between the City of Newark and Vanderbeek beginning with their arena negotiations and extending all the way up to the present day.
Photo: Bbsrock/Wikimedia/CC BY-SA 3.0
First, our two principal dramatis personae: Jeff Vanderbeek, owner of the Devils who purchased a majority control in 2004 and Cory Booker (pictured above), mayor of Newark, NJ, elected in 2006.
The differences are significant between the relationship of Katz and Mandel to that of Vanderbeek and Booker. In Edmonton, both groups want the same thing, a downtown arena, but disagree as to the level of risk to which each party must be exposed in any deal.
However, let's look at Booker and Vanderbeek, and all the other details surrounding the Prudential Center to see if things in Edmonton are really that bad by comparison.
The Continental Center in East Rutherford was in need of replacement. It had been built in 1981 and was well behind the NHL standard for venues. Newark, at the time, was also desperate to kickstart a downtown revitalization program that would attract people from the suburb communities. The crime rates and stigma attached to Newark don't compare to Edmonton's, but the underlying desire to provide a catalyst to economic development does.
First, here is some of the language floated by Vanderbeek shortly after purchasing the Devils, regarding the building of a new arena in Newark: “The Devils need a new arena that can provide a game-day experience that is certainly equal to the best team in the National Hockey League and certainly equal to the product that is put on the ice” and that this project “would take downtown Newark to a whole new level”. Sound familiar? After only a few months in office, Booker announced that he would re-evaluate the deal, even as the arena was being built, with the option of withdrawing the city's participation. A few months later Booker relented saying that Newark would get “a first-class arena built...whether we like it or not” (citation here), going on to say that not proceeding would likely result in “a tremendous amount of litigation”. Doesn't that sound like a vote of confidence?
*As a side note, the Prudential Center took about three years to build at an estimated cost of $375 million, during a time of high construction costs, and includes only a few of the entertainment amenities that the Downtown Arena plans currently envision.
Vanderbeek was a vocal proponent of a new arena dating back to his time as a minority owner of the team. Prior to construction there were legal battles to determine eminent domain and the extent of the city's financial participation in construction. While the municipal government had originally committed to aid in the arena project in 2002, the city and the Devils finally came to a deal in 2004 after lawyers had settled most of their disputes. Groundbreaking took place about a year later in 2005. Booker's predecessor (and now convicted felon) Sharpe James, had a sketchy history of ties to developers and there remained discomfort in some quarters over the city's relationship with the Devils' as it pertained to this deal.
Despite the intervention of the lawyers, the Devils and the city still fought over the amount of money that would be contributed to the project. It eventually got to the point that, while the groundbreaking had already taken place in October of 2005 and a workforce of thousands had been retained to start building, it wasn't until one day before the financial deadline in January of 2006 that the Devils' ownership submitted their letter of intent to help finance the project to the tune of $100 million. Failure to do so would have halted the entire project mid-construction.
Enter Cory Booker, elected mayor of Newark on July 1st.
Stop Me if You've Heard This One Before...
Photo: mastermaq/Wikimedia/CC BY-SA 2.0
For Oilers and Flames fans who have been following the Edmonton arena dispute, specifically the contest of wills between Daryl Katz and Stephen Mandel, we haven't yet seen anything like the schoolyard antics between Vanderbeek and Booker over, of course, money. This was an arena deal that had gone way past sour.
Even the national political partisan divide seems to enter the fray. Booker, a Democrat, has gotten embroiled in a dispute over the Devils with New Jersey governor Chris Christie, a Republican and avowed Rangers fan (link is here). Booker is defending the city's case in money's payable to the government while Governor Christie has said that the city owes money to the Devils.
Rent hasn’t been paid to the city since 2007 because of a dispute over parking fees payable to the Devils. This lead to an increasing acrimony between the two sides.
Recently an arbitrator was needed to rule on the financial state of the two entities relative to contracts signed and payments owed. The city, according to the findings, owes the Devils approximately $15 million, roughly $600,000 more than the Devils owe to the city for their contracts and services rendered. When two sides need to go to arbitration for what is, relatively, small potatoes in the world of financial governance, you know that the relationship is strained, if not broken.
This ruling has led to stories swirling that the city is infuriated at the outcome to the extent that the police presence at games has been reduced.
Mercifully, we haven't seen anything of that magnitude here in Edmonton.
My point is that while Katz and Mandel appear to be playing a game of chicken with this arena development plan, in the end the city will get a new arena. They almost always do. The team is going to stay – prior to the Prudential Center being built there were constant rumours of the Devils moving, even as far back as 1995 when they won the Stanley Cup – and the Katz group will get a deal that they can live with. Will the taxpayers pay for it? Of course they will. Just as we pay for roads, sewers, police, parks, and so on. It is a part of the cultural infrastructure of a city. The extent to which it will come out of the city's tax revenues remains to be seen, and it is best left to far keener minds than I to work out those details. But rather than wringing our hands (or gloating if you're a Flames fans) over this ongoing melodrama, we ought to remember that other local goverments have negotiated, or are currently negotiating, deals to build massive new “entertainment complexes” to house alleged economic engines and sources of civic pride all over North America. Edmonton is neither alone in this, nor particularly outstanding in their experience thus far.
That being said, it isn't easy to see more progress happen between Bettman and Fehr than Katz and the city of Edmonton. Until this gets sorted out, or the NHL season starts, let's just watch some Eberle and Yakupov highlights and try to forget about the “business of hockey”!