SAVILLE: ANOTHER KATZ MOUTHPIECE?

Robin Brownlee
September 22 2012 12:33AM

The stance by some citizens in this city seems to be that any member of the media who supports putting more money on the table to help build an arena in partnership with Edmonton Oilers owner Daryl Katz should be dismissed as a mouthpiece or a fartcatcher.

Others sit smugly and suggest that if Katz and the Oilers want a new arena, they can damn well pick up the tab because, after all, there's no way Katz is going to pull up stakes and move the team to another city that offers a sweeter deal. Even the faintest suggestion that could happen is characterized as fear mongering and bluffing by Katz.

It follows, then, that anybody in the local media who doesn't discount the possibility that shelving or delaying the downtown arena project might result in the Oilers leaving town for a destination that is building a rink or already has one is, again, a fartcatcher or a mouthpiece.

Bob Stauffer of 630 CHED gets tarred with that brush often, of course, as he's an employee of the Oilers and, it follows, is bought and paid for by Katz and Rexall Sports. People say Stauffer's a Yes Man. A shill. The opinion of people who feel that way has been strengthened in recent days as Stauffer has tip-toed around the possibility of Edmonton losing the team if the arena isn't built. "There goes Bob again, doing the bidding for Katz . . ."

SAVILLE WADES IN

I don't know if you heard Stauffer's interview with former EIG member Bruce Saville on Oilers Now today, but if you haven't, you can follow this link to the podcast. Give it a listen. It might just send shivers down your spine. At the very least, it should provide those who scoff at the possibility the Oilers will ever leave town pause for thought.

Saville, last time I checked, isn't a member of the segment of the media deemed by some to be pitchmen for Katz. Saville, near as I can tell, isn't a Katz Yes man, a mouthpiece, a fartcatcher. Katz isn't his boss. Katz doesn't sign Saville's cheques. Here's some excerpts – listen to the entire interview for context – of Saville's interview with Stauffer.

STAUFFER: ". . . I think it's naïve to believe there aren't other options for Mr. Katz and the Katz group carrying forward. What happens, do you think, if a building doesn't get built in this city?"

SAVILLE: "If this arena doesn’t get built, the team's gone. I don't know how long it'll take – two years when the lease is over, maybe another year or two beyond that, but I would bet my life that, five years from now, if there's not a new arena or a hole in the ground or one almost finished, that the team will be gone and there won't be any team coming along behind it to replace it . . ."

SAVILLE: "Let's get it signed and get on with it. This isn’t a get rich scheme for Daryl Katz. People who think that are just jealous. They don't understand the deal. It's unfortunate that Daryl is a bit of an introvert, you know? He doesn't like to appear in public. He doesn’t like to speak in public. But that's his personality. We all have personality traits.

"That's the fact. Isn't that better than Peter Pocklington mouthing off and you can't believe a word he says, you know? Peter Pocklington never saw a microphone he didn't like. Thank God he's out of here. (Katz) is a solid, solid, solid guy who, for some reason, has not really had the support of the business community, the downtown, big company business community. They're not stepping up . . ."

Fartcatcher? Mouthpiece? I think not.

Listen to Robin Brownlee Wednesdays and Thursdays from 3 p.m. to 5 p.m. on the Jason Gregor Show on TEAM 1260.

Aceb4a1816f5fa09879a023b07d1a9b4
A sports writer since 1983, including stints at The Edmonton Journal and The Sun 1989-2007, I happily co-host the Jason Gregor Show on TSN 1260 twice a week and write when so inclined. Have the best damn lawn on the internet. Most important, I am Sam's dad. Follow me on Twitter at Robin_Brownlee. Or don't.
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#101 The Soup Fascist
September 22 2012, 07:30PM
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S_DUB wrote:

The Soup Fascist, for someone who wants to "get over all the feelings of inadequecy, agendas, pettiness and rhetoric (from both parties involved)" you're really not doing a very good job of it - first, stating my use of a commonly-known reference to make a point was "unoriginal", then hyperbolizing about "Mayberry" and "Utopia", then complaining how this was not "relevant to the discussion", let's focus on the point, which you seem to be missing.

"But your last statement is a perfect metaphor for many who share your view. Let's just do enough to get by. We are in Edmonton (the fact that it is the capital of the wealthiest province in one of the wealthiest countries in the world, notwithstanding). We are fine with "settling". We don't really NEED an iconic world class venue for sports, entertainment, trade shows and conferences. Let's just put lipstick on the pig, that is Rexall. A vibrant downtown is overated and unneccessary. We are Edmontonians and really this is all we deserve.

"Sorry, I disagree - we deserve better."

What we deserve is that our tax money utility is maximized - if that is accomplished by subsidizing a private business, so be it. But this is a discussion that needs to happen, and whatever deal is in place needs to be analysed by what it accomplishes for the citizens, be it by effective use of tax dollars, or by having great sports and entertainment options. If building a new arena is not an effective use of tax money, don't do it. If the oilers will leave (which I don't believe they will, but I digress), and its extremely valuable to have them here, then build the thing, but call it what it is - subsidizing a profit-making business, but one from which the city benefits greatly.

If you are expecting efficient spending of dollars from this government or any other, I am afraid you are going to be disappointed. Without getting into a discussion on the socio-economic respsonibility of governments, they really have no incentive to be efficient.

I sincerely apologize if you feel slighted. But your view that a government, any government can simply sit back and wait for business to roll in is, IMO, naïve.

I assume you are a taxpayer so you can pass your views onto your councillor and ask him to take action as you see fit. My belief the arena is a bit of a litmus test in terms of stepping out of the "small town" funk this city seems to self wallow in at times. My hope is both parties can come up with a reasonable deal that will lead to construction of a world class facility that we will look back to as the start of something great. If you have a better use for our tax dollars, fill your boots.

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#102 Pouzar99
September 22 2012, 07:59PM
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Very lively debate fellow Nationers. I have to come down in the middle on this one. Katz is not Darth Vader but right now he is asking too much and threatening even more.

First off - Anyone who thinks Rexall is still a viable NHL rink either spends very little time there or has seen very few other NHL arenas. Even the ice plant is shot. The Oilers have a skating team on ice that is a pale shadow of the 80s. The sightlines are excellent but almost everything else ranges from sub-standard to appalling.

There must be a new rink, the projected location is ideal and Katz and the public must share the expenditures. The numbers and projections are where this gets sticky. When the city projects healthy profits for Katz and he projects break-even at best and significant losses at worst it makes it hard for us to judge, especially when the matter isn't fully public.

Katz obsession with keeping things private should make everyone nervous. It is clear that he has dumped a pack of new demands on Council and Mandel, who is no fool and has been by his side every step of the way, is pissed. One way or the other the parties have to grind this one out and get the shovels in the ground.

There is no sort-term danger of the Oilers moving, but Katz or no Katz, Rexall is only viable as a temporary home so, yes, if there is no new building in 5 years or so then there is some danger of losing the Oilers. But outside of the building Edmonton and Calgary are the strongest small market franchises in the league, infinitely better than any alternative. So not building a new arena is nuts and I can't see it happening. I also advocate tearing down Rexall when the new arena is built so the entitled clowns at Northlands and their pals on Council and the provincial government don't screw this thing up.

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#103 HOFFFF
September 22 2012, 08:36PM
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I've seen some of the people of Edmonton chase players out of Edmonton.....but an entire team at once? Once they are gone, they will all be looking around thinking..."what the eff did we just do?" Your NHL Team needs an new arena. If not now, in 5 years. Everyone knows that. So why not take advantage of the opportunity in front of you?

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#104 Mike
September 22 2012, 09:10PM
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@S_DUB

What about the city's own calculations that a new arena will yield a 1.3 billion dollar return over the term of the Oilers location agreement??

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#105 DSF
September 22 2012, 09:22PM
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Pouzar99 wrote:

Very lively debate fellow Nationers. I have to come down in the middle on this one. Katz is not Darth Vader but right now he is asking too much and threatening even more.

First off - Anyone who thinks Rexall is still a viable NHL rink either spends very little time there or has seen very few other NHL arenas. Even the ice plant is shot. The Oilers have a skating team on ice that is a pale shadow of the 80s. The sightlines are excellent but almost everything else ranges from sub-standard to appalling.

There must be a new rink, the projected location is ideal and Katz and the public must share the expenditures. The numbers and projections are where this gets sticky. When the city projects healthy profits for Katz and he projects break-even at best and significant losses at worst it makes it hard for us to judge, especially when the matter isn't fully public.

Katz obsession with keeping things private should make everyone nervous. It is clear that he has dumped a pack of new demands on Council and Mandel, who is no fool and has been by his side every step of the way, is pissed. One way or the other the parties have to grind this one out and get the shovels in the ground.

There is no sort-term danger of the Oilers moving, but Katz or no Katz, Rexall is only viable as a temporary home so, yes, if there is no new building in 5 years or so then there is some danger of losing the Oilers. But outside of the building Edmonton and Calgary are the strongest small market franchises in the league, infinitely better than any alternative. So not building a new arena is nuts and I can't see it happening. I also advocate tearing down Rexall when the new arena is built so the entitled clowns at Northlands and their pals on Council and the provincial government don't screw this thing up.

You really shouldn't equate Calgary and Edmonton in framing this debate.

1) The Saddledome is 5 years newer than Rexall Place and seats 19,829 for hockey. 3,000 more than Rexall Place.

2) The Flames generate $10 million more annually than the Oilers due to larger capacity. Over 10 years that is $100 million dollars.

3) In 1994, the Stampede Board turned over management of the arena to the Calgary Flames for $20 million dollars. Since that time, the Flames have received all non-hockey related revenue from the arena.

4) Calgary has a much larger corporate community to draw on for sponsorship

5) When Calgary needs a new arena, they will find a way to get it done.

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#106 David S
September 22 2012, 09:56PM
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DSF wrote:

You really shouldn't equate Calgary and Edmonton in framing this debate.

1) The Saddledome is 5 years newer than Rexall Place and seats 19,829 for hockey. 3,000 more than Rexall Place.

2) The Flames generate $10 million more annually than the Oilers due to larger capacity. Over 10 years that is $100 million dollars.

3) In 1994, the Stampede Board turned over management of the arena to the Calgary Flames for $20 million dollars. Since that time, the Flames have received all non-hockey related revenue from the arena.

4) Calgary has a much larger corporate community to draw on for sponsorship

5) When Calgary needs a new arena, they will find a way to get it done.

And they'll get it done in about a third of the time we will.

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#107 TigerUnderGlass
September 22 2012, 10:18PM
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David S wrote:

And they'll get it done in about a third of the time we will.

Interestingly though, it won't be downtown.

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#108 Dave
September 22 2012, 11:00PM
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I disagree with Pouzar99. The sight lines are not good at all. The announcer has to ask the attendees to sit back in their seats. Some do but many do not. I can't see the corner to my right without having to look up at the jumbotron.

The modern rinks have really steep stadium seating that offer a great view even in the nose bleeds.

The Ottawa arena seems sort of bargain basement but at least it is a good venue for watching a hockey game.

I think that the province and Edmonton made a mistake in supporting the RAM. We need a new arena but the new museum was only a nice to have. I would like to see Edmonton build a new arena with the Oilers as a tenant. They should get a good deal on rent but not benefit from non hockey revenue except if the building operates at a profit.

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#109 Reg Dunlop
September 23 2012, 01:38AM
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@DSF

Just to clarify, the Saddledome was built in 1983, the Coliseum in 1974 so Calgary's rink is more like 10 years newer. No argument with you otherwise.

For any art aficionados, sewering the arena deal would free up ALL SORTS of $$$$ to purchase many new works of art to display at the always empty gallery. Just think of all the wooden sticks with scratches on them, all the brightly painted cardboard boxes, all the chunks of metal welded together, and all the paint-splatters that pass for art!

I don't pretend to know anything about economics so maybe someone can help: How come I can't get my street cleared of snow once per winter in the richest province in the country yet family back in London,Ont., a city 1/4 our size, sees residential streets cleared within 24 hours of EVERY snowfall? Where does our tax$$ disappear to? Is it going to prop up Northlands? An agricultural organization over 130 years old? I sure hope so otherwise how would I ever know about new innovations in tractors and growing barley. And without the rodeo how would I ever see farm animals brutalized by drunks in cowboy hats? I guess I could just go to the Tofield rodeo.

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#110 Travis Dakin
September 23 2012, 02:16AM
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David S wrote:

- $5.5M/year is $192M over 35 years that Katz is putting in OF HIS OWN MONEY (profit that he could invest otherwise).

- The city will own the building

- Operating costs are ON TOP OF the mortgage. There was always a mechanism proposed (i.e. the casino) that would offset said costs. The city hasn't made any progress on that front so Katz is saying "Fine. Then pay me a subsidy per our agreement."

- Katz keeps all the profits of the arena, the city gets all the tax revenue from both the arena and any new development, said to be conservatively estimated at in excess of $2 BILLION.

- Katz is proposing the same sort of model cities like Winnipeg have in place. Why should he accept less than league standard?

- The arena district has been acknowledged by several credible sources (Downtown Business Association being one of them) to be a catalyst for much of the urban redevelopment. And no, people like "Mimi Williams" are NOT credible authorities.

- There have been ZERO credible studies done IN EDMONTON ABOUT THE ARENA DISTRICT that refute the claims of the city, DBA. Zero. None.

- We have spent almost nothing on our downtown in comparison to our suburbs. The result is what you currently see - a "crap hole"

- Contrary to popular belief, many of us are not content with a crap hole downtown.

- Also, many of us are OK with a businessman making profit. It's what they do. Get over it. You don't like it? Put up in excess of $200 Million yourself to buy the team and let's see if you're any different.

- The "economic redistribution" argument is based on the false assumption of a closed economy. It assumes no net in-migration of business or people. People lean on this because it supports their hate of new development being financed (in part) by government, despite the fact it's a commonly used vehicle for economic expansion.

If someone doesn't give this man a reach around right now, there's going to be a riot!

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#111 Kgo
September 23 2012, 03:27AM
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We all thought this was fear mongerimg and leverage. But the fact is, the feasibility of business ventures worldwide come all come down to one simple thing, ROI, return on investment, if the number isnt bigger than inflation, the deal gets nixed, that's why katz needs at least 2 or 3# ROI or the deal does and he sells the team, and puts his 300Mill into GICs

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#112 Bushed
September 23 2012, 08:55AM
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Thanks to David S and DSF for their posts--you've added excellent info to this discussion.

Just to clarify, is the 1.6 to 2 billion in "revenue" the projected tax revenue for the city?

If so, where's the argument against building?

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#113 Walter Sobchak
September 23 2012, 09:23AM
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DSF wrote:

This is just nonsense.

Katz is contributing:

1) $125 million from a ticket surcharge that DOES NOT EXIST without the Oilers.

2) $5.5 million annually over 35 years which amounts to $192.5 million and includes interest. As any good businessman would do, he is using the city's ability to get money at a far lower rate than he could on capital markets and there is NO RISK to the city in this arrangement since he is guaranteeing it.

3) He is contributing $25 million to the construction of the Winter Garden and has agreed to pay half if the cost rises about $50 million

4) As part of the arena agreement, he is required to spent a minimum of $30 million to kick start the ancillary development around the arena. He claims he has already spent $70 million and the city could easily verify this and I am sure verification would be part of the agreement.

That adds up to a minimum $280 million so to say he will contribute nothing is just absurd.

I think what rankles lethargic thinkers is:

1) Katz will make a profit....on noes!!!!! He already has too much money!!!

3) There is a risk involved in the CRL. Maybe nothing happens. Eeeek. The city administration certainly doesn't think so. These professional planners and bean counters have raised their estimate of CRL revenue to $1.6 BILLION. Why don't you read the report.

http://www.edmonton.ca/city_government/documents/Updated__CRL_Review_Forcecast_2012.pdf

4) Katz has asked the city to live up to its commitment in the framework agreement to find a funding source for maintenance and capital costs. It was ALWAYS in the agreement.

Another factor almost always overlooked is that, as part of the agreement, the city has used of the arena for one month every year. The city can use the proceeds of its activity to pay down its contribution to the arena if it so chooses.

One of the last stumbling blocks to the agreement to build a new arena in Seattle was also fear about the success of the CRL there. The developer has agreed to guarantee that revenue stream and perhaps that is the solution for all the NIMBYs in Edmonton.

However, there is still the matter of the missing $100 million and I think it is THAT which will ultimately kill this deal and see the Oilers head to Seattle in a couple of years.

Katz is apparently meeting with Hansen next week and I'm guessing its not to talk about the NBA.

Excellent, well thought out post, I wish I could have conveyed the same sentiments while arguing with the many friends and family members. Props.

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#114 Butters
September 23 2012, 09:46AM
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Just build it already. It gives the anti-area crowd something to complain about for the next 40 years. We get to keep the Oilers, DT get revitalized. Everybody is happy. It's win-win-win.

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#115 Walter Sobchak
September 23 2012, 10:14AM
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So, Question for you all!

I am under this assumption, while I’m told different; I don’t think I’m wrong here.

The city of Edmonton is talking about TAX generated revenue as apposed to raising the citizen’s tax’s or a immediate charge in order to pay for the arena, The city is taking it’s loans out on the assumption that this arena and area will generate X amount of tax revenue to pay the loans off?

Once the arena is built and the area revitalized then property tax's will be re-evaluated in the area, if the property values does increase in the area, and you own a home or business in that area, then your place also increased in value, so it offsets the property taxes that you would incur anyways?

So if you have no involvement with the Oilers, no association with the Oilers, don’t shop downtown nor live in the downtown core or have a business downtown, then this arena should not affect you as a citizen of Edmonton?

As far as the missing $100 million dollars, the provincial government allocates X amount of dollars to cities for there budget, an additional grant maybe used for necessary infrastructure that the city feels is required to help maintain or improve that’s cities infrastructure.

I know this is a basic version it becomes more complicated but is this not the brass tax of it?

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#116 Morgie99
September 23 2012, 11:27AM
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- The "economic redistribution" argument is based on the false assumption of a closed economy. It assumes no net in-migration of business or people. People lean on this because it supports their hate of new development being financed (in part) by government, despite the fact it's a commonly used vehicle for economic expansion. - DAVID S

Hey, David

After reading that, I wonder if I understand English, can you elaborate on your quote above, I don't know what the heck you saying LOL

As for a ticket tax, keep in mind it is not Dollar for dollar, meaning $1 dollar more for ticket tax DOES not meant Katz can't charge a dollar more for a ticket

In reality the ticket tax may mean, when it's $25 dollars a ticket , Katz can't charge any more for a ticket

So essentially the ticket tax is 20% out of Katz pocket when it reaches that level, that's 25 mill then, not 125, we the public are paying the remaining 100 mill, SO DSF I'd say Katz contribution is 100 mill less than you suggest

As for paying 200 mill for hockey team, that's an asset he can sell for a profit, not sure why we keep referring to that as an investment, it's not. But should he expect a reasonable ROI sure he should, VOR on lowetide under the article Grace figures that will be 28 mill in a good year or a loss of 10 mill in a bad year on current deal

DSF

thanks for PDF link of CRL, I will read

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#117 David S
September 23 2012, 11:45AM
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Bushed wrote:

Thanks to David S and DSF for their posts--you've added excellent info to this discussion.

Just to clarify, is the 1.6 to 2 billion in "revenue" the projected tax revenue for the city?

If so, where's the argument against building?

Yep. That figure is the projected tax revenue over the life of the project (35 years).

That money would go to improving infrastructure (sewers, roads, transit, etc) within the boundary of the CRL district. Calgary used the same method to revitalize their downtown's east end. It worked really well. I lived down there when they were just getting going. On my last trip I drove through what was formerly crackhead central. The transformation has been nothing less than amazing.

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#118 David S
September 23 2012, 12:10PM
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Morgie99 wrote:

- The "economic redistribution" argument is based on the false assumption of a closed economy. It assumes no net in-migration of business or people. People lean on this because it supports their hate of new development being financed (in part) by government, despite the fact it's a commonly used vehicle for economic expansion. - DAVID S

Hey, David

After reading that, I wonder if I understand English, can you elaborate on your quote above, I don't know what the heck you saying LOL

As for a ticket tax, keep in mind it is not Dollar for dollar, meaning $1 dollar more for ticket tax DOES not meant Katz can't charge a dollar more for a ticket

In reality the ticket tax may mean, when it's $25 dollars a ticket , Katz can't charge any more for a ticket

So essentially the ticket tax is 20% out of Katz pocket when it reaches that level, that's 25 mill then, not 125, we the public are paying the remaining 100 mill, SO DSF I'd say Katz contribution is 100 mill less than you suggest

As for paying 200 mill for hockey team, that's an asset he can sell for a profit, not sure why we keep referring to that as an investment, it's not. But should he expect a reasonable ROI sure he should, VOR on lowetide under the article Grace figures that will be 28 mill in a good year or a loss of 10 mill in a bad year on current deal

DSF

thanks for PDF link of CRL, I will read

- The "closed system" reference speaks to the idea that micro (in-city) economies (in this case) have limited resources and people. Arena opponents say that any "perceived" economic lift will be the result of simply shifting people and resources from one part of the economic ecosystem to another, thus their claim that there will be zero net increase.

Problem is, modern cities are NOT closed economic ecosystems. In Edmonton's case, we have an underutilized section of our downtown that (if properly developed) should help attract businesses and residents from OUTSIDE Edmonton. FYI - that's been an ongoing problem for the city - that being how to attract said business and tax paying residents. In effect, we are in a competitive state with other cities for business and population. This is relevant even more-so now than say twenty years or so ago when people did not have the same flexibility to move to another region to improve their ways of life.

- With respect to the ticket tax, it is a USER PAY revenue generator. It doesn't burden the public in general. So to say that "the public are paying $100 Mill" is just not correct.

Every cent of that tax is revenue Katz could otherwise have taken for himself. It is foregone revenue. As long as he gives it up, no amount of adjustment he does on the price will matter. There's a limit to how much he can charge for a ticket. There's no sliding/25% scale. If he goes above that amount, he won't sell said ticket.

The consumer looks at the TOTAL price of the ticket, similar to what you experience when you buy any consumer good like a car. It won't matter if the car itself is priced at say $40,000 if the taxes make the REAL price $45,000 if $40,000 is all you can pay.

[NOTE] I never pay attention to those things but don't we have a ticket tax right now?

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#119 David S
September 23 2012, 12:20PM
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And just because I know it's coming...

Opponents are correct. Studies have shown that arenas have little or no net economic effect on their surroundings.

But we're talking about an ENTERTAINMENT DISTRICT composed of stores, restaurants, office towers, condos, bars, casino AND AN ARENA linked with the greater downtown. The Downtown Business Association has estimated a total of as much as $5 BILLION in new development may be possible in no small part due to the arena district being a catalyst for all that development.

The thing is, our situation is somewhat unique. Our downtown has been egregiously underdeveloped at the expense of our suburbs. Many cities don't have the underlying potential as Edmonton, being located in one of the few economically uptrending parts of North America. This project might not work in many other places, but it has a very good chance of succeeding here.

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#120 Magnus
September 23 2012, 12:33PM
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@TigerUnderGlass

That's not entirely true. They have already chosen a site on the stampede grounds where the new arena would be built. Though not surrounded by skyscrapers, the stampede grounds are walking distance from the heart of downtown. There's really no open area downtown that could fit a stadium that would be any closer to downtown than the one already proposed.

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#121 KB
September 23 2012, 12:57PM
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Morgie99 wrote:

First, yes, North lands area is a crap hole, always will be, but so are many stadiums in north america, they are in crap hole areas, it's not pretty but it is what it is

Rexall concourse could be widened, put in new seats for $250 mill a lot less than the city spending 400 mill +

Yes, the negotiation is embarrassing, but assuming if one side is unreasonable, how do you negotiate?

Yes, a couple of Councillors were in conflict of interest, I think that's why Caterina left the board. But, Leibovici who supports this is in conflict of interest, her husband is a VP for Rexall, it goes both ways for both sides.

Downtown is already building all over the place, just take a look, many, many projects are happening, and are too happen without the Arena, and the biggest ones are happening without the arena,

And, No Edmonton doesn't need Katz, period

You say that the existing concourse "could be widened" like that is a simple task.

Do you have any idea how difficult that would be (before you ask me the same thing, yes, I actually do as a structural engineer)?

Do you for one second think it could be accomplished between NHL seasons? Where are the Oilers going to play while this simple renovation is being constructed?

How much of that $250 million you say it will cost is Katz going to chip in? I thin know all know the answer to that one...

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#122 DSF
September 23 2012, 01:05PM
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David S wrote:

And just because I know it's coming...

Opponents are correct. Studies have shown that arenas have little or no net economic effect on their surroundings.

But we're talking about an ENTERTAINMENT DISTRICT composed of stores, restaurants, office towers, condos, bars, casino AND AN ARENA linked with the greater downtown. The Downtown Business Association has estimated a total of as much as $5 BILLION in new development may be possible in no small part due to the arena district being a catalyst for all that development.

The thing is, our situation is somewhat unique. Our downtown has been egregiously underdeveloped at the expense of our suburbs. Many cities don't have the underlying potential as Edmonton, being located in one of the few economically uptrending parts of North America. This project might not work in many other places, but it has a very good chance of succeeding here.

If it is done right....it will succeed.

Here's is some information on what actually happened in Columbus:

“Clearly this is one of the premier, if not THE best setup in the NHL. Cities looking to build a sports venue and companion private development to create vibrant urban synergies need look no farther than Columbus to see how it should be done.”

Academics are also positive about the district. Brad Humphries, a University of Alberta sports economist, and his colleague Xia Feng report that in 2000 alone — the year the arena opened and little else had been built in the district — property values within a mile (1.6 kilometres) of the arena went up by more than $200 million, an early signal of the enthusiasm locals had for the new downtown.

Ohio State’s John Glenn School of Public Affairs reported that from 1998 to 2008, assessed property values in the Arena District went up by 267 per cent, more than 12 times the average 22-per-cent increase for downtown Columbus.

In his recent report to the Edmonton arena committee — which had the task of deciding whether Edmonton needed a new arena and where it should be built — sports economist Mark Rosentraub of the University of Michigan held up facilities in Columbus, Los Angeles, San Diego and Indianapolis as the best examples of North American arena development.

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#123 DSF
September 23 2012, 01:21PM
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@KHR

1) " First the ticket tax is not a contribution by Katz or the Oilers to the building of the arena. It does act as a brake on Katz's ability to raise ticket prices to fund his own operations and I believe he tries to use this fact as a justification that he is making a contribution to the project in that amount. I don't buy that argument unless he is willing to say that he will pay the $125M (or whatever the amount is supposed to be) out of his revenue and that anything over that amount he can keep in exchange for dropping the ticket tax idea (pretty sure he came out against the idea of ticket tax in the past)."

Suggesting a ticket tax is not a contribution by Katz or the Oilers is nonsense. The revenue stream DOES NOT EXIST without the Oilers. It is derived from the actual market value of what Katz can charge for tickets which exactly why Katz was reluctant to agree to it. Since it is"user pay" I can't think of any reason any intelligent taxpayer would oppose it.

2) Since the city insisted from the outset that it own the arena...the city became the landlord.

If you rent a house and the roof and furnace need replacing, should the tenant be responsible for those costs?

Operating costs were always part of the original framework with the city agreeing to find another source of funding for this. The city has not done so.

3) The Arena District is anticipated to be much larger than the "3 blocks" you mentioned. 3 blocks is only the arena itself and the Winter Garden.

4) Your math is very weak. Katz has committed $280M toward this project (I provided a breakdown above) and that does NOT included his purchase of the team.

5) The city has refused to shutter Rexall Place and, when Katz requested a non-competition clause, the city refused and instead agreed to pay Katz $2million/year in advertising for 10 years to compensate.

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#124 David S
September 23 2012, 01:25PM
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At the end of the day I believe this ask is entirely related to the fact that Northlands wants to keep running Rexall Place. Katz wants to be the only game in town so he can maximize his profits at little to no risk. I think if the City could find a way to make Northlands get rid of Rexall this might go away.

IMO this is the thing holding up everything else. Northlands and Katz have a very acrimonious relationship. If I were Katz I'd have to assume Northlands would do everything in their power to make things as difficult for him as they could. That would include massively undercutting every event proposal that comes to the city for every hosted event or concert.

It's a conservative projection of course, but one that has to be taken into account with the investment at stake. This city cannot sustain two arenas. It's as simple as that.

I'm of the belief that if Northlands wasn't in the picture, shovels would already be in the ground.

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#125 Walter Sobchak
September 23 2012, 03:16PM
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Call me crazy, but is what’s holding the deal up a gaming license and the rights and revenue from a casino? No?

Also, I had already assumed Katz would be the ones under cutting and outbidding Northlands until they folded after a year or so.

I do agree that there a pain in the ass.

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#126 M22
September 23 2012, 03:17PM
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.

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#127 M22
September 23 2012, 03:22PM
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#128 Hair bag
September 23 2012, 04:02PM
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TigerUnderGlass wrote:

Interestingly though, it won't be downtown.

Yes it will, as an Oiler fan who lives in Calgary, I frequent the area often and the Stampede Group has made no secret that part of buying up all the land around the Saddledome is so that a new building can be built right next door and then the Saddledome demolished afterwards...

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#129 Morgie99
September 23 2012, 05:03PM
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KHR wrote:

Disagree with you.

1) This argument is circular.

Tax doesn't happen if the Oilers don't exist, but the need for a new arena exists because of the Oilers. Weeeeee, what a fun merry-go-round that is.

As I understand the tax it will be a flat fee imposed on each ticket to each event so it has nothing to do with the market value of what Katz can charge (if I'm wrong please point out a source) so why the heck would Katz care about the tax aside from the fact that the City would be taking money that he wants for himself. You are right that it is user pay and so someone who doesn't go to games shouldn't have a care about the use of this money, but your comment seems to imply that I do care and that somehow I'm not intelligent. I never said one word about opposing the ticket tax. I pay a ticket tax right now that goes to pay the Oilers rent on Rexall as a Season Ticket holder so I'm already both feet in on this idea. I have no idea if you are a season ticket holder or not, are you? Or are you someone who only goes when a person gives you tickets for free? If you don't kick into this pool right now your opinions on this are of very little interest to me.

My comments on the ticket tax is that I am unwilling to allow Katz to claim that it is his contribution to the arena, the same way I am unwilling to allow Katz to claim that he pays rent to the City now. Why didn't he say to the City stop collecting the ticket tax right now and I will just write you a check for $5M a year for rent on Rexall? Sorry but he can not claim the contribution if he doesn't claim the expense and the risk. Nothing you say will change my opinion on that.

2) You are right the City does want to retain ownership of the building but Katz doesn't want to own it either so it is a moot point. The reason Katz doesn't want to own it is so he can put the operational cost on to the City, but commercial leases (which are drastically different from residential leases so please don't use the analogy of a home rental anymore) are net leases. So you pay me to use the space and then you pay me the costs of operating the space, the taxes on the space, the repairs on the space and the administration of the space. Cost of doing business. I pay it everyday with my business, what the heck is Katz's problem?

3) The word "anticipated" is the biggest problem with this whole mess. When will this anticipated development get done? 3 years from now? 5 years from now? 10 years from now? All the projected tax money the City is supposed to get is going to come from this development so how long before we get to start making that money?

Again the City is the one taking the risk not the Oilers, and it is out of the magical imaginary money (which is what it is until the time that the other development takes place) that we are supposed to come up with Operational rebate to the Oilers. And there isn't even a shovel in the ground yet so who cares if the City hasn't found its other source yet? If things are built and the City still hasn't lived up to its agreement then Katz can come back to the City and sue them.

4) My math isn't weak at all I just don't agree with your breakdown. I already said the $125M is not a contribution on his part so I don't give him credit for that. The $30M he is supposed to put into other development I don't care about either. That is for things NOT included in the arena and that is what we talking about. Using this kind of logic we should include the $10M or whatever the heck he spent on building his house too. Only arena $$ counts, and it certainly doesn't include the purchase of the Oilers either. And I find it telling that he claims to have paid out $70M to these other outside developments already but wants to pay his share of the $100M over 35 years. Where you put your $$ is where you put your priorities and I am pretty sure I know where he thinks he is going to make his money on this deal.

5)And as far as Northlands goes I believe that they have a lease with the City to use the arena for years to come so unless the City pays Northlands how many tens upon tens of millions of dollars to buy back that lease there is nothing that they can really do about it. That buy out would certainly be counted as a contribution by the City to the building of a new arena in order to give Katz his ultimate exclusivity that he wants. Northlands would shutter and dismantle the current arena if they were included in the new arena and their current streams of revenue were protected. That makes them no bigger a jerk in this whole affair than Katz and the Oilers. Both are bloated and both want the taxpayer to foot their bills.

Let me also be very clear. I do want a new arena to be built, and I'm fully willing to support the current deal the City has with Katz, but I find it cheap as all get out to have him plead that he can't be sure of the revenue streams for the operation of the building so the City should some how guarantee him $6M or whatever the amount is to ensure he can make a profit. Well the City has no guarantee on the taxes that will be created and yet they are willing to go into partnership with him on this deal and pay the lion's share of the expense. I want him to step up and be the big successful business man that he is and put his wallet on the line a little bit. That is the only way I am sure that he will be giving a damn about the success of this project, this team and this City.

Pretty much sentiment, well said KHR

And David S,

Thanks for that explanation, enlightening

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#130 Bigfan
September 23 2012, 05:08PM
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We the public are just now learning about what has been going on for some time in the negotiations between the City administration and the Katz Group.

The brief meeting in New York a year ago likely left some things unclear, which is pretty much the case universally with brief meetings about such complex deals. The different parties probably did not interpret all discussions and agreements (I doubt there were formal resolutions) in exactly the same way.  His Worship The Mayor and presumably Gary Bettman were desperate to get a deal in place and may have placed less weight on some things that Darryl Katz felt needed further work.

The agreement that was put in place after the meeting does acknowledge that some 'details' still needed to be tied down.

I expect the negotiating teams have continued to struggle on these 'details' for some time and both the report from the City's team and the Katz Goup letter are reflecting these struggles.

This is not a sudden further moneygrab ambush by the Katz Group.

This is the City reporting back to Council that they have not been able to get the Katz Group to give up their positions on some of the 'details' they were charged with resolving. And this is Katz getting tired of the City Team saying 'We can't formally accept something so far from the original framework'

I am confident a deal will be reached before much longer and the arena will be built downtown.  There is too much benefit at stake for both parties: the hockey team gets a new arena with improved revenue from more sources; the City gets the iconic downtown catalyst and the reassurance of stability; both get to share in the use of $100 million coming from somewhere not yet stated publicly (but I expect known).

It is hard to make a case that Katz is only in it for the money - what i like to call the 'Zappa Accusation''.  There are buildings and institutes all over the City that benefitted from his philanthropy.  But he can hardly be expected want to proceed further with an arrangement where he is required to operate the team for 35 years in Edmonton without trying to get some protection from the risk of protracted losses.  In 35 years the Canadian Dollar - US Dollar excange rate will almost certainly change substantially and we could see the Oilers in financial trouble despite full attendance at high Canadian Dollar Prices.

Everyone goes on about how Darryl Katz is hugely rich - worth two billion dollars or more.  But the City of Edmonton is vastly more rich, with infrastructure in place and the ability to collect taxes.  Katz's entire worth is spent by the City each year.  Of course, The Coty of Edmonton has a great many and varied responsibilities.  I think the Katz Group is sincerely trying to do what he can financially, without taking on too much risk of long term liability, to kickstart a downtown revitalization, to keep the team he loves in the City he definitely holds a soft spot for, and to leave a legacy or monument as a community builder.

He is rich enough that he is unlikely to motivated by the desire to 'ripoff' Edmontonians to make more.  Mr Burns is a cartoon character!

I hope the two sides of the negotiating team go back to finding a create way to toe up the remaining details.  Perhaps the City has to agree they may have to subsidize hockey operation if it becomes an unreasonable committment for the Katz Group to operate for many years at big financial loss whereas the Katz Group has to pay an additional tax if there are substantial operating profits.  This will require the City receive audited financial records for the Oilers and strict definitions of things hockey related revenues and hockey related costs.  They do not need to be public - just available to the City Clerk.  Sure Katz is not going to like that sort of sharing of his financials - but I think it could be s very fair exectation if the City is going to aggre to emergency sinsidies in some potential scenarios.

Anyway - The Oilers are an important part of the cultural fabric of Edmonton.  The proposed site for the arena is currently a wasteland and the downtown could use the help.  It would only be good asset management for both groups to hammer out a good deal.  And quickly, because costs continue to increase..

The brief meeting in New York a year ago likely left some things unclear, which is pretty much the case universally with briefeeting about such complex deals. The different parties probably did not interpret all discussions and agreements (I doubt there were formal resolutions) in exactly the same way.  The Mayor and presumably Gary Bettman were desperate to get a deal in place and may have placed less weight on some things that Darryl Katz felt needed further work.

The agreement that was put in place after the meeting does acknowledge that some 'details' still needed to be tied down.

I expect the negotiating teams have continued to struggle on these 'details' for some time and the report from the City's team and the Katz Goup letter appearing this week are reflecting these struggles.

This is not a sudden further moneygrab ambush by the Katz Group.

This is the City negotiating team reporting back to Council that they have not been able to get the Katz Group to give up their positions on some of the 'details' they were charged with resolving.  The subsequent leaks to the media - Oil leaks, if uou will - and the Katz press release probably did a lot to distort the image of the course of events and probably were not helpful to the efforts to work out a deal.

I am still very confident a deal will be reached before much longer and the arena will be built downtown.  There is too much benefit at stake for both parties: the hockey team gets a new arena with improved revenue from more sources; the City get the iconic downtown catalyst and the reassurance of stability; both get to share in the use of $100 million coming from somewhere not yet stated publicly (but I expect known).

It is hard to make a case that Katz is only in it for the money - what i like to call the 'Zappa Accusation''.  There are buildings and institutes all over the City that have benefitted from his philanthropy.  But he can hardly be expected want to proceed further with an arrangement where he is required to operate the team for 35 years in Edmonton without trying to get the risk of protracted losses.  In 35 years the Canadian Dollar - US Dollar excange rate will almost certainly change substantially and we could see the Oilers in financial trouble despite full attendance at high Canadian Dollar Prices as was the case just a few years ago.

Everyone goes on about how Darryl Katz is hugely rich - worth two billion dollars or more.  But the City of Edmonton is vastly more rich than that with all the infrastructure in place and the ability to collect taxes.  Katz's entire worth is spent by the City each year.  Of course, The City has a great many and varied responsibilities.  I think the Katz Group is sincerely trying to do what he can financially, without taking on too much risk of long term liability, to kickstart a downtown revitalization, to keep the team he loves in the City he definitely holds a soft spot for, and to leave a legacy or monument as a community builder.

He is rich enough that he is unlikely to be motivated by the desire to 'ripoff' Edmontonians to make more.  Mr Burns is a cartoon character!

I hope the two sides of the negotiating team go back to finding a create way to toe up the remaining details.  Perhaps the City has to agree they may have to subsidize hockey operations to some extent if external conditions mean it becomes an unreasonable committment for the Katz Group to operate for many years at big financial loss; whereas the Katz Group has to pay an additional tax if there are substantial operating profits.  This will require the City receive audited financial records for the Oilers and strict definitions of things like hockey related revenues and hockey related costs.  They do not need to be public - just available to the City Clerk.  Sure Katz is not going to like that sort of sharing of his financials - but I think it would be a very fair and reasonable exectation if Katz expects the City to agree to emergency sinsidies in some potential scenarios.

Anyway - The Oilers are an important part of the cultural fabric of Edmonton.  The proposed site for the arena is currently a wasteland and the downtown is in dire need of help. Anyone who opposes the idea of the arena needs to take a drive around the area today - do it in the light - definitely not in the dark, and stay in your car. It would only be good asset management for both groups to hammer out a good deal.  And quickly, because costs continue to increase..

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#131 Bigfan
September 23 2012, 05:12PM
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We the public are just now learning about what has been going on for some time in the negotiations between the City administration and the Katz Group.

The brief meeting in New York a year ago likely left some things unclear, which is pretty much the case universally with brief meetings about such complex deals. The different parties probably did not interpret all discussions and agreements (I doubt there were formal resolutions) in exactly the same way.  His Worship The Mayor and presumably Gary Bettman were desperate to get a deal in place and may have placed less weight on some things that Darryl Katz felt needed further work.

The agreement that was put in place after the meeting does acknowledge that some 'details' still needed to be tied down.

I expect the negotiating teams have continued to struggle on these 'details' for some time and both the report from the City's team and the Katz Goup letter are reflecting these struggles.

This is not a sudden further moneygrab ambush by the Katz Group.

This is the City reporting back to Council that they have not been able to get the Katz Group to give up their positions on some of the 'details' they were charged with resolving. And this is Katz getting tired of the City Team saying 'We can't formally accept something so far from the original framework'

I am confident a deal will be reached before much longer and the arena will be built downtown.  There is too much benefit at stake for both parties: the hockey team gets a new arena with improved revenue from more sources; the City gets the iconic downtown catalyst and the reassurance of stability; both get to share in the use of $100 million coming from somewhere not yet stated publicly (but I expect known).

It is hard to make a case that Katz is only in it for the money - what i like to call the 'Zappa Accusation''.  There are buildings and institutes all over the City that benefitted from his philanthropy.  But he can hardly be expected want to proceed further with an arrangement where he is required to operate the team for 35 years in Edmonton without trying to get some protection from the risk of protracted losses.  In 35 years the Canadian Dollar - US Dollar excange rate will almost certainly change substantially and we could see the Oilers in financial trouble despite full attendance at high Canadian Dollar Prices.

Everyone goes on about how Darryl Katz is hugely rich - worth two billion dollars or more.  But the City of Edmonton is vastly more rich, with infrastructure in place and the ability to collect taxes.  Katz's entire worth is spent by the City each year.  Of course, The Coty of Edmonton has a great many and varied responsibilities.  I think the Katz Group is sincerely trying to do what he can financially, without taking on too much risk of long term liability, to kickstart a downtown revitalization, to keep the team he loves in the City he definitely holds a soft spot for, and to leave a legacy or monument as a community builder.

He is rich enough that he is unlikely to motivated by the desire to 'ripoff' Edmontonians to make more.  Mr Burns is a cartoon character!

I hope the two sides of the negotiating team go back to finding a create way to toe up the remaining details.  Perhaps the City has to agree they may have to subsidize hockey operation if it becomes an unreasonable committment for the Katz Group to operate for many years at big financial loss whereas the Katz Group has to pay an additional tax if there are substantial operating profits.  This will require the City receive audited financial records for the Oilers and strict definitions of things hockey related revenues and hockey related costs.  They do not need to be public - just available to the City Clerk.  Sure Katz is not going to like that sort of sharing of his financials - but I think it could be s very fair exectation if the City is going to aggre to emergency sinsidies in some potential scenarios.

Anyway - The Oilers are an important part of the cultural fabric of Edmonton.  The proposed site for the arena is currently a wasteland and the downtown could use the help.  It would only be good asset management for both groups to hammer out a good deal.  And quickly, because costs continue to increase..

The brief meeting in New York a year ago likely left some things unclear, which is pretty much the case universally with briefeeting about such complex deals. The different parties probably did not interpret all discussions and agreements (I doubt there were formal resolutions) in exactly the same way.  The Mayor and presumably Gary Bettman were desperate to get a deal in place and may have placed less weight on some things that Darryl Katz felt needed further work.

The agreement that was put in place after the meeting does acknowledge that some 'details' still needed to be tied down.

I expect the negotiating teams have continued to struggle on these 'details' for some time and the report from the City's team and the Katz Goup letter appearing this week are reflecting these struggles.

This is not a sudden further moneygrab ambush by the Katz Group.

This is the City negotiating team reporting back to Council that they have not been able to get the Katz Group to give up their positions on some of the 'details' they were charged with resolving.  The subsequent leaks to the media - Oil leaks, if uou will - and the Katz press release probably did a lot to distort the image of the course of events and probably were not helpful to the efforts to work out a deal.

I am still very confident a deal will be reached before much longer and the arena will be built downtown.  There is too much benefit at stake for both parties: the hockey team gets a new arena with improved revenue from more sources; the City get the iconic downtown catalyst and the reassurance of stability; both get to share in the use of $100 million coming from somewhere not yet stated publicly (but I expect known).

It is hard to make a case that Katz is only in it for the money - what i like to call the 'Zappa Accusation''.  There are buildings and institutes all over the City that have benefitted from his philanthropy.  But he can hardly be expected want to proceed further with an arrangement where he is required to operate the team for 35 years in Edmonton without trying to get the risk of protracted losses.  In 35 years the Canadian Dollar - US Dollar excange rate will almost certainly change substantially and we could see the Oilers in financial trouble despite full attendance at high Canadian Dollar Prices as was the case just a few years ago.

Everyone goes on about how Darryl Katz is hugely rich - worth two billion dollars or more.  But the City of Edmonton is vastly more rich than that with all the infrastructure in place and the ability to collect taxes.  Katz's entire worth is spent by the City each year.  Of course, The City has a great many and varied responsibilities.  I think the Katz Group is sincerely trying to do what he can financially, without taking on too much risk of long term liability, to kickstart a downtown revitalization, to keep the team he loves in the City he definitely holds a soft spot for, and to leave a legacy or monument as a community builder.

He is rich enough that he is unlikely to be motivated by the desire to 'ripoff' Edmontonians to make more.  Mr Burns is a cartoon character!

I hope the two sides of the negotiating team go back to finding a create way to toe up the remaining details.  Perhaps the City has to agree they may have to subsidize hockey operations to some extent if external conditions mean it becomes an unreasonable committment for the Katz Group to operate for many years at big financial loss; whereas the Katz Group has to pay an additional tax if there are substantial operating profits.  This will require the City receive audited financial records for the Oilers and strict definitions of things like hockey related revenues and hockey related costs.  They do not need to be public - just available to the City Clerk.  Sure Katz is not going to like that sort of sharing of his financials - but I think it would be a very fair and reasonable exectation if Katz expects the City to agree to emergency sinsidies in some potential scenarios.

Anyway - The Oilers are an important part of the cultural fabric of Edmonton.  The proposed site for the arena is currently a wasteland and the downtown is in dire need of help. Anyone who opposes the idea of the arena needs to take a drive around the area today - do it in the light - definitely not in the dark, and stay in your car. It would only be good asset management for both groups to hammer out a good deal.  And quickly, because costs continue to increase..

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#132 David S
September 23 2012, 08:43PM
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Man. That's when the dreaded double post really comes back to bite you.

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#133 David S
September 23 2012, 08:49PM
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@KHR

A ticket tax of any kind is revenue foregone by the ticket seller. This is not up for debate.

Simply washing away $125 Million that Katz gives up (in effect contributes) just because you either don't get the concept or choose not to accept it doesn't change that reality.

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#134 KHR
September 23 2012, 11:52PM
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David S wrote:

@KHR

A ticket tax of any kind is revenue foregone by the ticket seller. This is not up for debate.

Simply washing away $125 Million that Katz gives up (in effect contributes) just because you either don't get the concept or choose not to accept it doesn't change that reality.

Okay this is the last thing I intend to say on this thread and about this topic.

I disagree with you about what is open for debate, and just because you don't agree with me doesn't allow you or anyone else to kill that debate.

Let me see if I can explain my position in another way. In the operations of my business I collect GST on behalf of the Government of Canada. That money is not mine, never was and never will be. I get to submit input tax credits and all that jazz but as long as I am collecting more than I claim I HAVE to send that money on to the Government because it doesn't belong to me. It is the Government's money because it is a tax, I am only collecting it on the Government's behalf. I haven't forgone 1 penny of revenue. This is exactly the same thing as the ticket tax. The money collected in a ticket tax DOESN'T BELONG TO KATZ so he can't claim the hardship of paying it to the City as it has ALWAYS been the City's money. "(Just) because you either don't get the concept or choose not to accept it doesn't change that reality". (Does that sound as snarky to you as it did to me when you said it? Just checking.)

In my first post I said that we could get rid of the tax as long as Katz was willing to put in the $125M on his own. Re-write the deal to kibosh the tax and make the Oilers pay $125M in rent over the 35 years and I will give him full marks for putting the money in. But as long as it is a tax he has no claim to the money and has no right to claim the hardship of paying money that never was his.

Good night all.

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#135 mikezanier
September 24 2012, 09:22AM
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@David S

Except Katz doesn't own or set the prices for any of the non-hockey events taking place at the arena.

The arena operator charges a flat fee for usage of the facility and the entertainer sets their own prices for tickets.

Does Northlands set Paul McCartney, Cirq du Soleil or Bieber ticket prices? Of course not.

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#136 David S
September 24 2012, 11:40AM
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mikezanier wrote:

The city isn't building an entertainment district. It's building an arena.

Where in the plans is the funding for the entertainment district?

With a CRL funding model in place, any sort of private investing will be stifled because the city will need to continually raise the assessment of all property within the CRL zone to use those property taxes to pay off the loans they took out. The CRL is based on increasing property taxes for everyone in CRL zone to direct those tax dollars towards the arena.

What kind of business is excited to build in an area where their property taxes are guaranteed to drastically increase year after year?

Staples uses Columbus as an example of great growth around new arena. Guess what. Columbus essentially cut all the property taxes to zero to spur development. Edmonton is proposing to do the exact opposite. In trying to trick taxpayers into thinking that CRL isn't tax dollars, this CRL scheme is guaranteeing property taxes increase.

And all the services the new development needs like water mains, police, ambulance service, LRT stations, that their property tax dollars would be paying for if they weren't be directly funneled into paying off city loans, will need to be recouped and paid for by everyone else in the city.

11. If I own a business in the area proposed to be included in a CRL zone and it is approved will my taxes increase?

Not as a result of a CRL. But when your property value increases, the increased taxes arising from that increased value are dedicated towards the costs of infrastructure. Increases in taxes as a result of any new development within the CRL zone are used to pay for the CRL. The example in the following question helps to explain how a CRL will impact taxes in the area.

http://www.edmonton.ca/city_government/projects_redevelopment/community-revitalization-levy-faq.aspx#26890

The CRL is based on re-allocating increased tax revenues resulting from an increase in property value per annual assessment. I've personally seen an example in Calgary. The resulting development was 100% private and would not have located within the affected area unless the city decided to use the CRL to revamp the surrounding infrastructure.

You guys really need to stop inventing fictitious scenarios and presenting them as facts.

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#137 DMan
September 24 2012, 11:43AM
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mikezanier wrote:

The city isn't building an entertainment district. It's building an arena.

Where in the plans is the funding for the entertainment district?

With a CRL funding model in place, any sort of private investing will be stifled because the city will need to continually raise the assessment of all property within the CRL zone to use those property taxes to pay off the loans they took out. The CRL is based on increasing property taxes for everyone in CRL zone to direct those tax dollars towards the arena.

What kind of business is excited to build in an area where their property taxes are guaranteed to drastically increase year after year?

Staples uses Columbus as an example of great growth around new arena. Guess what. Columbus essentially cut all the property taxes to zero to spur development. Edmonton is proposing to do the exact opposite. In trying to trick taxpayers into thinking that CRL isn't tax dollars, this CRL scheme is guaranteeing property taxes increase.

And all the services the new development needs like water mains, police, ambulance service, LRT stations, that their property tax dollars would be paying for if they weren't be directly funneled into paying off city loans, will need to be recouped and paid for by everyone else in the city.

You're right when you say that the CRL is taxpayers money... But you're being way too presumptuous to assume that city council will raise property taxes to pay for the loans it would take on to fund the arena. Although one may argue differently, I would assume the city has forecasted their finances in regards to debt repayment, impact on property taxes, future revenues into city coffers, etc.

Using Columbus as a comparison to Edmonton is a poor argument as well.. Simply put, Columbus is not a rabid hockey market like Edmonton... They're a couple steps away from Phoenix's situation and haven't sold out a game in ages...

In Edmonton - after every game whether it be for the Oilers and the Oil Kings to a lesser extent - you'll see a minimum of 10,000 people wanting to have dinner, a beer - whatever before or after a game... I can see a lot of businesses lining up to rent space...

Finally, did you ever consider the economic impact of what happens should the Oilers leave town?? No offense - but the Oilers bring more people and their money to Edmonton than all parks, museums and art galleries (funded by the taxpayers) put together.

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#138 The Soup Fascist
September 24 2012, 12:11PM
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KHR wrote:

Okay this is the last thing I intend to say on this thread and about this topic.

I disagree with you about what is open for debate, and just because you don't agree with me doesn't allow you or anyone else to kill that debate.

Let me see if I can explain my position in another way. In the operations of my business I collect GST on behalf of the Government of Canada. That money is not mine, never was and never will be. I get to submit input tax credits and all that jazz but as long as I am collecting more than I claim I HAVE to send that money on to the Government because it doesn't belong to me. It is the Government's money because it is a tax, I am only collecting it on the Government's behalf. I haven't forgone 1 penny of revenue. This is exactly the same thing as the ticket tax. The money collected in a ticket tax DOESN'T BELONG TO KATZ so he can't claim the hardship of paying it to the City as it has ALWAYS been the City's money. "(Just) because you either don't get the concept or choose not to accept it doesn't change that reality". (Does that sound as snarky to you as it did to me when you said it? Just checking.)

In my first post I said that we could get rid of the tax as long as Katz was willing to put in the $125M on his own. Re-write the deal to kibosh the tax and make the Oilers pay $125M in rent over the 35 years and I will give him full marks for putting the money in. But as long as it is a tax he has no claim to the money and has no right to claim the hardship of paying money that never was his.

Good night all.

While the GST argument is reasonable in terms of the mechanics of collection and payment of the tax, there is a major difference between your business and the relationship between the Oilers and the City.

If you sell widgets, you must charge GST. But so must every widget store in the country. There is no widget business that has an advantage.

The proposed arena ticket tax is specific to the venue and event. If the Katz Group is competing with Northlands or the Stampede Board for a band, he has to essentially eat the ticket tax to be on a level playing field. There is a finite amount people will pay for a ticket (including taxes). Whoever is paying that tax has to account for that in the pricing.

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#139 David S
September 24 2012, 12:19PM
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mikezanier wrote:

Except Katz doesn't own or set the prices for any of the non-hockey events taking place at the arena.

The arena operator charges a flat fee for usage of the facility and the entertainer sets their own prices for tickets.

Does Northlands set Paul McCartney, Cirq du Soleil or Bieber ticket prices? Of course not.

The ticket price vendor has to set his prices to account for the TAX-IN price because this is the price people will pay. If the price is too high, they won't pay. The difference between the price of the ticket and the tax is foregone revenue, or revenue that could otherwise have been taken by the vendor if that tax didn't exist because the customer had agreed to pay that price.

When GST first came in many people would separate the tax from the asking price when in fact for all intents the tax-in price is what you pay. Similar to where people used to tip on the before-tax price on a restaurant receipt. I don't know anybody these days who doesn't just look at the all-in price and calculate their 20% based on that figure.

Again - Tax is part of the price you agree to pay. If there were no tax, the vendor could charge up to the tax portion because (in effect) you already agreed to the value of the tax-in price.

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#140 VMR
September 24 2012, 12:56PM
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The Soup Fascist wrote:

While the GST argument is reasonable in terms of the mechanics of collection and payment of the tax, there is a major difference between your business and the relationship between the Oilers and the City.

If you sell widgets, you must charge GST. But so must every widget store in the country. There is no widget business that has an advantage.

The proposed arena ticket tax is specific to the venue and event. If the Katz Group is competing with Northlands or the Stampede Board for a band, he has to essentially eat the ticket tax to be on a level playing field. There is a finite amount people will pay for a ticket (including taxes). Whoever is paying that tax has to account for that in the pricing.

Except part of the deal was any events at Rexall would also have a similar tax applied to their tickets, so no competitive disadvantage for the new arena.

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#141 David S
September 24 2012, 01:21PM
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VMR wrote:

Except part of the deal was any events at Rexall would also have a similar tax applied to their tickets, so no competitive disadvantage for the new arena.

Which doesn't preclude Northlands from undercutting RX2. They have far less costs because their arena is paid (by taxpayers mind you) in full so they can charge a lower selling price and still cover costs. Not related, but they can charge event operators far less too, which I'm sure is at the root of the primary sticking point in these negotiations. Katz originally wanted a non-compete, which the city wouldn't grant.

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#142 mikezanier
September 24 2012, 03:32PM
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David S wrote:

The ticket price vendor has to set his prices to account for the TAX-IN price because this is the price people will pay. If the price is too high, they won't pay. The difference between the price of the ticket and the tax is foregone revenue, or revenue that could otherwise have been taken by the vendor if that tax didn't exist because the customer had agreed to pay that price.

When GST first came in many people would separate the tax from the asking price when in fact for all intents the tax-in price is what you pay. Similar to where people used to tip on the before-tax price on a restaurant receipt. I don't know anybody these days who doesn't just look at the all-in price and calculate their 20% based on that figure.

Again - Tax is part of the price you agree to pay. If there were no tax, the vendor could charge up to the tax portion because (in effect) you already agreed to the value of the tax-in price.

But the vendor is the actual non-hockey entertainer, not Katz. He is the vendor w/ the oilers. So the tax is putting a ceiling on whether Paul McCartney charges $200 or $210 for each ticket.

Not sure your "many people" argument with GST is very statistically sound...

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#143 mikezanier
September 24 2012, 03:38PM
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David S wrote:

11. If I own a business in the area proposed to be included in a CRL zone and it is approved will my taxes increase?

Not as a result of a CRL. But when your property value increases, the increased taxes arising from that increased value are dedicated towards the costs of infrastructure. Increases in taxes as a result of any new development within the CRL zone are used to pay for the CRL. The example in the following question helps to explain how a CRL will impact taxes in the area.

http://www.edmonton.ca/city_government/projects_redevelopment/community-revitalization-levy-faq.aspx#26890

The CRL is based on re-allocating increased tax revenues resulting from an increase in property value per annual assessment. I've personally seen an example in Calgary. The resulting development was 100% private and would not have located within the affected area unless the city decided to use the CRL to revamp the surrounding infrastructure.

You guys really need to stop inventing fictitious scenarios and presenting them as facts.

And remind me who sets the property taxes within the CRL? City will be increasing these taxes to ensure they meet their CRL estimates. If the CRL area doesn't increase property taxes for all the residents/businesses, the city will have to increase everyone's property taxes to cover the $100s of millions in loan payments taken out. CRL succeeds = massive tax increases for CRL residents to pay off loans. CRL fail = increase in property taxes to pay off loans... It's coming from taxpayers either way.

Is this not true?

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#144 mikezanier
September 24 2012, 03:43PM
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DMan wrote:

You're right when you say that the CRL is taxpayers money... But you're being way too presumptuous to assume that city council will raise property taxes to pay for the loans it would take on to fund the arena. Although one may argue differently, I would assume the city has forecasted their finances in regards to debt repayment, impact on property taxes, future revenues into city coffers, etc.

Using Columbus as a comparison to Edmonton is a poor argument as well.. Simply put, Columbus is not a rabid hockey market like Edmonton... They're a couple steps away from Phoenix's situation and haven't sold out a game in ages...

In Edmonton - after every game whether it be for the Oilers and the Oil Kings to a lesser extent - you'll see a minimum of 10,000 people wanting to have dinner, a beer - whatever before or after a game... I can see a lot of businesses lining up to rent space...

Finally, did you ever consider the economic impact of what happens should the Oilers leave town?? No offense - but the Oilers bring more people and their money to Edmonton than all parks, museums and art galleries (funded by the taxpayers) put together.

Why is Columbus a poor example? Staples used it as a successful example multiple times.

Do these 10,000 people not eat or drink now? i'm not arguing that the arena won't concentrate some bars/restaurants into a smaller area. But don't kidd yourself that all of a sudden this is going to be new money. Rather than stopping at a restaurant on the way to the game, they might eat in the "Entertainment District."

It's just shifting spending, not creating new spending.

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#145 David S
September 24 2012, 04:55PM
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mikezanier wrote:

And remind me who sets the property taxes within the CRL? City will be increasing these taxes to ensure they meet their CRL estimates. If the CRL area doesn't increase property taxes for all the residents/businesses, the city will have to increase everyone's property taxes to cover the $100s of millions in loan payments taken out. CRL succeeds = massive tax increases for CRL residents to pay off loans. CRL fail = increase in property taxes to pay off loans... It's coming from taxpayers either way.

Is this not true?

- The city has estimated (very conservative by necessity I'm sure) that the benefit of the CRL is in the neighborhood of $2 BILLION. Do you really think that the designated portion of that money for the arena (currently pegged at a paltry $45M direct and $125M in total) won't be achieved?

- The CRL only affects those within the CRL's defined borders, so this idea of "everyone" is just plain misleading. If the property value of those developments within the CRL boundaries increase, well that's the point, isn't it?

- The mayor has categorically stated on several occasions that taxes will NOT increase for the average resident to pay for this project. I have to believe him over the cadre of people throwing out ridiculous and unfounded counter assertions, most of whom have no real accreditation to make those sorts of statements.

If these ideas are your own I would suggest reading some of the background material cited and linked in this thread. Some of your assumptions are a bit off base.

If you're repurposing statements made by the vocal minority than I have to caution most of these claims are incorrect or based on misinformation/lack of understanding of the methodologies involved. They are using simplistic and uninformed analysis to support their position. Most of what they say is conjecture and fear-mongering to the highest degree.

Look. I get it. Diligence needs to be exercised. And it's not my intent to be mean to people here. But the amount of misinformation and simply ridiculous claims based on nothing more than fear is getting out of hand.

At the end of the day a new arena needs to be built. There is no argument that can support any other outcome. The city will be paying for one of a revamped arena at Northlands (estimated at $250M 2007 dollars) or an arena downtown which will be the centrepiece of a major urban redevelopment. There are no other options.

No doubt either option will cost. The economics are highly in favor of spending that money downtown due to the multiplier effect.

If anybody has another solution, then by all means bring it to the table and we'll all have a look. Otherwise, I don't see how this project cannot go through.

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#146 David S
September 24 2012, 04:59PM
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mikezanier wrote:

Why is Columbus a poor example? Staples used it as a successful example multiple times.

Do these 10,000 people not eat or drink now? i'm not arguing that the arena won't concentrate some bars/restaurants into a smaller area. But don't kidd yourself that all of a sudden this is going to be new money. Rather than stopping at a restaurant on the way to the game, they might eat in the "Entertainment District."

It's just shifting spending, not creating new spending.

The "closed economy" argument has been discussed up above. It's simply not true.

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#147 J-Bird
September 24 2012, 05:11PM
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My 2 cents is simply this. Edmonton does need a new downtown, and should have been sold as that over a new home for the Oilers.

However, here we are:

1) Stauffer and Milhouse doing their propaganda minister jobs are HURTING the cause. It's so blatant and so obvious, it diserves an immediate defensive response IMO?

2) Teams moving back to Winnipeg REALLY got us scared to lose our team? Just stop it. Get real. Get on with things. 10 owners in the US would buy the team in a heart beat just for the market. It makes you look like a little wimp taking his ball and going home Darryl. Grow up.

3) Between the propaganda ministers over at 630, and the absolute idiotic way going about asking for public funds by the Katz group, the fence sitters in the public at this point in time are not in favour of the project. Honey and flies Katz! Wake up!!

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#148 The Soup Fascist
September 24 2012, 05:23PM
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mikezanier wrote:

Why is Columbus a poor example? Staples used it as a successful example multiple times.

Do these 10,000 people not eat or drink now? i'm not arguing that the arena won't concentrate some bars/restaurants into a smaller area. But don't kidd yourself that all of a sudden this is going to be new money. Rather than stopping at a restaurant on the way to the game, they might eat in the "Entertainment District."

It's just shifting spending, not creating new spending.

Not sure that your assumption that there will not be new money coming in rings true.

a) There will be 2500 - 3000 more seats in the new rink. Certainly a percentage of those people will be inclined to eat / drink before and / or after the game - how is this not growth?. Many will be from outside the metropolitan area. I am going by memory a bit here, but I believe 15% of season ticket holders are outside of Edmonton, so expect more hotel room utilization as well.

b) If you work downtown are you going to be more likely to drive home after work and back for the game / concert or just stay downtown and go for a bean and and wobbly pop?

c) People will want to make it an evening outing downtown that simply do not do that now, due to lack of quality and quantity venues. At Rexall what am I going to do if I want to make it an outing? Go for a hoagie at the Husky station across the road, jam into the only reasonable restaurant within 10 blocks for a slice of pizza with 150 other people in a restaurant that holds 100, book a nice night with the wife at the "beautiful" Coliseum Inn? None of these are real great options. A nice steak at Ruths Chris and a night at the Hotel Mac is a little more attractive. Guarantee myself and many others will be more apt to spend downtown as there are many more viable options. There is a lot of disposable income in this town and throughout Northern Alberta. The key is to make it easy for people to spend it. If you build it they will come.

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#149 nunyour
September 29 2012, 11:53AM
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this is fun to watch,a multi million dollar chess match,the board is set,who pays what,and who gets the revenue? the city says no,ok bring in the pawns(us),anyone want to go to Seattle and check out the new arena? the pawns start to get worked up ,some fighting between them selves,council starts to swet.never let them see you swet......to be continued.

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