SOMEBODY'S POISONED THE WATER HOLE!!

Lowetide
September 25 2012 07:41AM

 

The last 24 hours have been interesting times for the city of Edmonton. Fans found out a good portion of the ownership group and their icon collection were apparently shopping for a new city.

As with all things, context and understanding are vitally important. I'm no expert when it comes to the arena deal, but it looks like there are several pressure points on both sides:

  • Costs are going up
  • The negotiation has been going on for a generation and the two sides appear to have a wider gap than they did at the beginning.
  • The "deal" that had been agreed to--at least that was the fan's understanding--is now not good enough.
  • "Casino" money--part of the initial deal--may not be available.
  • The city has recently rejected the Katz group request for a subsidy.
  • Mr. Katz gave a long and meandering interview ("the White Album") in which he expressed frustration over the long and drawn out process.
  • Mayor Mandel suggested he was also frustrated and went public with the idea Katz talk to council with camera's on.
  • Katz and his entourage made their most public appearance in a new town, in a clear and perhaps desperate attempt to put pressure on the city. 

QUIT HORSING AROUND!

A statement released by the Oilers yesterday confirmed the visit and generally acknowledged that this was a pressure drop without actually saying the words. The statement did discuss the fanbase:

  • “We are extremely grateful to Oilers’ fans for their patience and loyalty as we work through this process towards what we sincerely hope will be a long and successful future for the Oilers in Edmonton. We have no further comment on the status of our discussions with other markets at this time.”

MY TAKE

The problem Mr. Katz is having–in my opinion–is that Edmontontians were very uncomfortable but willing to live with the deal made with the City. The mayor’s reaction to the new request for dollars was a perfect mirror for the citizens, and that gap–however wide–may be the hill the mayor and the city of Edmonton choose to die on.
 
Can the casino gap be made up with user fees? What about a "community fundraiser" committee ala the 1500 Saskatchewan Roughrider groups who help the team? What about--and don't kill me--a third partner who invests and also shares in the (obvious) profits?
 

WHAT DOES IT ALL MEAN?

 
 
This isn't an easy negotiation for either side, and I do believe the city has stretched itself to the breaking point. The feeling I get in talking to Edmontonians is that they know the current deal is a huge win for Katz but are willing to live with it. Is there an appetite to go to 'infinity and beyond' for the Oilers and homey Daryl Katz?
 
I suspect we're about to find out.

C2a6955161684b5e3189319acfa5ebe4
Lowetide has been one of the Oilogosphere's shining lights for over a century. You can check him out here at OilersNation and at lowetide.ca. He is also the host of Lowdown with Lowetide weekday mornings 10-noon on Team 1260.
Avatar
#51 NewAgeSys
September 25 2012, 10:17AM
Trash it!
0
trashes
+1
0
props

Strangly enough for a Hockey site with many well educated people paticipating I havent heard anyone mention the TRUE current value of the Edmonton Oilers.

Didnt any of you wonder why Hall and Ebbs were signed when and how they were signed??Do you not realise the VALUE Katz ESTABLISHED within his asset with those seven year deals???He "creted"future value or a "credit card" for himself.Leverage.I already posted on this.

We arent talking about losing a SINGLE hockey team if we lose the Oilers--it is more like TWO TEAM worth of value,we need to understand the TRUE NHL defined value of our personell,heck katz could move and blow up the lineup and make a fortune and never look back,we have three number one draft picks all of whom could catalyse a franchise,so we need to recognise this as city hall fails to do,there is immense real and historical value in this franchise.

City Hall underestimated Katz,period,he was building a solid negotiating dynamic right under everyones noses,but not mine,as soon as I heard of the two big contract signings I knew he was establishing value without having to spend the actual dollars--an artificially created and maintained league dollar value ready realised through future contractual obligations,,,he grants the player imaginary credit based on potential future repayment with stats then he uses that credit to apply for even more credit from the fans based on a claimed and evidenced hardship created by the "players"heavy contracts.,,,he is starting to get serious.

We dont have to do the traditional back and forth negotiating dance here-----we can just pull the trigger on the deal and let God sort em out when the smoke clears. Mayor Mandell looks like he walked right off the set of a sitcom,and the rest of city hall looks like a cross between an episode of Glee and an episode of Weeds!!I still cant safely drive down 106st since the inception of these insane bike lanes,designed for citys like Vancouver,jesus,wait till winter when these lunatic cyclers still believe they have lane credibility,and dont think for a second they wont be biking in the winter because they sure do.People are going to die over this either in cars trying to avoid bikes or in flat out runovers. This is a reflection of the cast of Comedy stars we have in City Hall.These Clowns are not reflective of Edmontons population at all.The present Cabal got into civic duty as a co-operating group comprised of several small special interest groups many years ago in Edmonton based on the fact that SO MANY of us dont vote in civic elections,but we allow the FEW WHO DO VOTE to decide for us,this means a small co-operating group of paralell minded entitys can and DID take over our civic politics starting with Jan Reimer and continuing till today.And their Cabals ulterior agendas run deeply through everything City Hall does.

Can Katz move the team--yes.

Will Katz move the team??--thats up to us as Edmontonians.

Darryl Katz wasnt born into the Dynasty he now runs,it was 'created"he likes to build things,for gods sakes its obvious,so lets let him build here,its his nature.

Its up to us,picket city hall,if we cant get a sell-outs worth of Oilers fans to meet at city hall then we dont deserve the team here,put your mouths where your money is and get down to city hall together and demand city hall make this deal happeni it is your right to do that if you want to.It wont take much for us as fans to help City Hall expedite this deal based on thousands and thousands of season ticket holdes and their familys and friends,OCCUPY CITY HALL BEFORE ITS TO LATE.Lets give City Hall a "backdoor"trust me they will recognise it for what it is dynamicly.If you are a paying fan you have an obligation to show up.Someone pick a day and lets git er done.Lets push the flow a little.NewAgeSys is in ,just pick the day someone get the ball rolling,seriously recognise the power that many thousands of people will IMMEDIATLY HAVE--just the national media coverage alone,is it really that hard to get everyone together on short notice??Really??Lets help Mandell and City Hall make the "backdoor play"work,lets jump into the fray---numbers DO matter.

Just Sayin.

Avatar
#52 DMan
September 25 2012, 10:20AM
Trash it!
0
trashes
+1
0
props
Bill wrote:

Katz is doing to his bed here what a cat does in its litterbox.

If indeed the Katz group and the Oilers even HAVE a PR department, clearly they have a specific mandate from Katz OR they don't understand the concept of "public relations".

In all the dealings involving Katz as the Oilers' owner, and his negotiations with the City of Edmonton over the arena, this gambit with Seattle is strangely the most public, the most transparent, and the most crass. This strategy might have flown in the early '90's but it clearly doesn't in 2012 in Edmonton.

I don't know what the best case is for Katz here, he's obviously trying to find leverage to use against the city. The worst case for him (assuming he cares) is that he's souring what reputation he has in this city.

To make it clear, the best case for Katz is for him to don the white hat, to make the overture that will get this negotiation moving. I suspect there is definitely middle ground that can be achieved at this point between the City and Katz Group.

What would be the difficulty in both sides agreeing to an outside mediator? I would think that this would at least get the obstacles and the remaining issues out in the open. Both sides are letting on like the other side knows what the issues are, yet nothing is happening. Someone obviously needs to facilitate the process for both parties, because they're not getting it done on their own.

Time for Katz to be the bigger man, the corporate citizen.....and make a bit of a move for this process to proceed. For their part, the City cannot continue to have the perception of small-mindedness. They're going to have to move toward the middle ground as well.

We supporters of professional hockey in Edmonton are getting it from all directions these days, it this whole charade is wearing thin.

What I find amusing is that Hansen (the businessman building the arena in Seattle) is funding the entire arena (all $490 million) himself - with the assumption he gets an NBA team in return... What boggles my mind is what Katz was trying to accomplish with trying to get so called 'leverage'...

Now showing up somewhere in Quebec or somewhere near Toronto for 'a tour' of potential arena sites would have definitely made a lot more serious noise than a city where his precious Oilers would be 4th - 6th on the depth chart of most popular sporting teams...

What also bothers me is that we consistently hear that the city council is relying on the City's administration to negotiate the deal... If deal was as precious to council - why doesn't council have a couple of alderman as part of the negotiating team?? If there is an impasse on a particular issue - wouldn't the group save time by having someone within the city who 'signs the cheques' to answer those questions?? I am by no means an elected civil servant (perhaps its unfair for me to criticize), but to me - this doesn't sound as much of a priority as we'd like to think...

Both parties are to blame for this mess... For shame!

Avatar
#53 NewAgeSys
September 25 2012, 10:53AM
Trash it!
0
trashes
+1
0
props
mayorpoop wrote:

the whole bus driver thing is really dumb to say. just because he was a bus driver doesn't make him stupid or any less able to deal with the people he represents. cause that's kinda his job. representing the citizens of his area.

there a lot of examples of really smart successful people who do not have an education or a very high level of it. they can ahcieve and understand things as well.

NOOOOOO !!!I crush THEE and Thy perspective!!!!

The Bus Driver comment is right on target-not specificly the individual person themselves{there must be millionaire bus drivers out there} but the general reality is that normal Joes and Janes are NOT equipped to make major negotiations like this,people should be contracted out to do this for the city,as paid representative contractors-- negotiators anything over 100 million goes out of City Halls negotiating hands or butterfingers.

Decision making power should be theirs but negotiating is taken out of their hands and given to pros.

Yes,anyone can be smart,but smart and prepared are two different things,you really want a brain surgeon repairing your cars broken brakes before you take a trip through the Mountains???Hes the smartest guy out there right??

Sorry,but this libertarian attitude is why we are in this mess.Smart and prepared are different things and we need to recognise this.Bus Drivers and Housewives and Plumbers are not prepared to make these types of high level high dollar business "negotiations",they are prepared to make the DECISIONS but their abilitys end exactly there,and then they need to hire out for help.If the decision is that yes the city decides we need an Arena,COUNCIL CLOSES SESSION ON THAT NOTE because their job is done----the next day they find a proper representative to carry forward negotiations beyond the green light.These are yes/no men and women,not negotiators.They were hired to simply be representative of edmontons populations wants and needs as manifested through their decisin making in City hall,not absolute entitys in themselves,we all want the arena,our city hall must abide by that,the decision must be made YES or NO,and then City Hall isnt to be heard from again.If a deal with katz cant be worked out so what???our representatives will still build the arena because we want one,,,,,and then we have the Hammer and we can shop for another team-----ooops I forgot if we build an Arena then the Oilers stay right??This is a no brainer.

Even if we foot the entire bill for the exact same arena design tomorrow on our own katz or another Billionaire will obviously step in and make even more hundreds of millions off of all the residual development.An arena needs a pro team as an ANCHOR,and if you build it they will come,just ask Seattle.If we build it someone will come here and anchor the Arena---just make it a beautiful cutting edge building.By the time its done if we break ground on our own this year we will have another team,no superstars,but someone will land here within four or five years.

Avatar
#54 Walter Sobchak
September 25 2012, 10:57AM
Trash it!
0
trashes
+1
0
props

My fears

People will view Katz as some kind of Pocklington clone, Fact is Pocklington did sell the Oilers to a US based business man who was going to move the team, only to be nixed at the last minute by the ATB (I think)

**No team will ever move here or be allowed to move here by the NHL if Rexall is the place they move to or if Northlands is anywhere near the picture….This is as real as it gets.

Therefore the city will have to build a NEW arena completed funded on TAX dollars and there will be zero revitalization involved at the expensive of a lost team, lost time and increased costs, probably in the 650 to 750 range by that time with less infrastructure involved.

Katz should fire his PR team they are terrible. I think there is more to the story then Katz looking at Seattle as a possible destination.

I actually believe what my friend says, that it’s Gretzky looking at landing a NHL team there in the future, Katz and Lowe are using that as PR the same way Mario Lemieux used Quebec as a possible destination.

Fact-The city needs this and Katz is in the best position to help facilitate this, but he is using backward tactics to get what he needs.

The city should just give Katz the bloody casino money and move on, talk about dying on a hill! There talking about the 6-8 million a year in maintenance cost! Jebus! Just get it done. This equates to something like Lowe holding his ground for 100,000 over Smyth, just retarded.

What happens to Edmonton if the Oilers do leave? What is the Oilers worth to this community?

top all the politics, both parties need to stop using the fans to gain political points over each other, site down, hash out some type of deal and just be BETTER.

Avatar
#55 mr_nihilism
September 25 2012, 11:06AM
Trash it!
0
trashes
+1
0
props

Hockey is worshiped by many in this city so it only stands to reason that taxpayers get bent over in order to get this deal done. For those that don't enjoy hockey they can visit the art gallery. Losing the Oilers is not an option.

Avatar
#56 NewAgeSys
September 25 2012, 11:07AM
Trash it!
0
trashes
+1
0
props
Zamboni Driver wrote:

Ladies and gentlemen, we achieve clarity now at last.

Katz is better than us we should just give him everything he wants because...

...you know...

of the 'being better' aspect.

Thank you michael for helping me, personally, achieve enlightenment.

Could we please use semi-normal sentences---you have great spelling but I guess spellcheck doesnt fix your odd way of posting.

The Pot shouldnt call the Kettle black.You whine about someones spelling and post this broken up drivel??

Ba ha ha ha.

Just sayin.

Avatar
#57 Woogie
September 25 2012, 11:07AM
Trash it!
0
trashes
+1
0
props

The funny thing out of all this is. Katz holds all the cards and leverage just like the NHL owners do against the NHLPA.

The city will give in to the demands by Katz and the NHLPA will do the same to the NHL.

The sooner we get this done the better for everyone involved. Especially for the FANS!

Avatar
#58 mayorpoop
September 25 2012, 11:10AM
Trash it!
0
trashes
+1
0
props

@NewAgeSys

ok yeah so i didnt read all of that because i couldn't make hide nor hair of what was is going on.

the part about the difference between being prepared and smart confuses me. you know they sit on council and are privy to all information the KG comes forward with. they are able to research, dissect and study this information. i guess what i'm saying is that this is called being PREPARED. so in essence they are both prepared and smart.

works for me.

Avatar
#59 book¡e
September 25 2012, 11:14AM
Trash it!
0
trashes
+1
0
props
Woogie wrote:

The funny thing out of all this is. Katz holds all the cards and leverage just like the NHL owners do against the NHLPA.

The city will give in to the demands by Katz and the NHLPA will do the same to the NHL.

The sooner we get this done the better for everyone involved. Especially for the FANS!

No, he doesn't. The American economy is in the tank still and municipal subsidies are drying up quicker than city halls are being sold. Yes, there is Seattle, but there are other teams that should and can move their before the Oilers. This is not the mid-90's when Oil was $20 a barrel and the economy in Alberta was bad.

Avatar
#60 book¡e
September 25 2012, 11:17AM
Trash it!
0
trashes
+1
0
props

@DMan

Bill, the city manager himself is part of the negotiating team which demonstrates a pretty serious level of commitment by the City.

Avatar
#61 MattL
September 25 2012, 11:25AM
Trash it!
0
trashes
+1
0
props

Why does Katz want every part of this negotiation public except for the minor detail of how much I'm going to be paying for this exactly as a taxpayer?

That's really the only part of the negotiation I want/need details on, and it's the part he wants to hide from the public.

Avatar
#62 2004Z06
September 25 2012, 11:28AM
Trash it!
0
trashes
+1
0
props

One thing Oilers fans seem to forget. Katz is a businessman. He bought the team with money he earned from being a businessman. He runs the team as if it were a business. (which it ulitmately is). It is HIS team. Not the fans team, not the city's team. It is his. He can run it and do with it what he wants. We may not like it as fans, but it doesn't really matter in the grand scheme of things. Of course he wants to make money on the deal and the surrounding development. That is how he became a billionaire. He doesn't have to cater to you or I or the city at all. I love the fans passion, but we can't be telling the guy how to run his business.

Avatar
#63 David S
September 25 2012, 11:32AM
Trash it!
0
trashes
+1
0
props
Zamboni Driver wrote:

On top of using your spell-checker, you REALLY need to get your facts straight on the City's position.

Again.

Slowly.

...actually maybe I will mis-spel sum words so you can get it.

The City.

The elected people who put in those annoying bus lanes Already Said. Yes.

Now, the great Daryl Katz, better than us, is asking for more.

It's blackmayal, I tell you, blackmael.

No. He's asking for the original deal, which was for a casino to be built on the premises and the profits being used to offset operations costs.

The city hasn't made any progress on that front (after four friggin' years!), so he's saying "Fine. Then just pay me that operations money as a subsidy."

An operations "subsidy" was always on the table. Katz is just forcing the issue to get the city off it's ass and do something. If they can't make the casino thing work it's up to them to present an alternative or work with Katz to make something, ANYTHING happen.

Part of the problem, as mentioned above, is that council isn't negotiating with Katz. Farbrother and his admin team is handling that task, which I'm sure is leading to a breakdown in communication.

Avatar
#64 RexLibris
September 25 2012, 11:33AM
Trash it!
0
trashes
+1
0
props

@Lowetide

Re-read this today. http://sports.espn.go.com/nhl/news/story?id=2788701

Seemed appropriate and a good restorative for my rattled nerves.

Here's hoping we'll be debating your RE's in Edmonton next summer, rather than the Left Coast.

Avatar
#65 Walter Sobchak
September 25 2012, 11:37AM
Trash it!
0
trashes
+1
0
props

@book¡e

I always enjoy reading your opinions and by no means am I advocating for ether side anymore, both are at fault here.

“How can the man survive on a mere 15% profit per year on his investment in this economy?”

I guess that’s just it, right now it’s good, but the potential to take a mid 80’s noise dive is always a very real threat and very much a huge risk, on both side’s, but a business man will always look to reduce that risk, is that a bad thing?

I just don’t see what 6-8 million really does in the whole scope of this enormous deal? The city is just going to fold up and say no more? Is this some kind of grandstanding by both parties here? Just doesn’t make sense on both parts.

The only problem I have with your back up plan is that, the city would be taxing the public hard on that deal, there is no other way around it, and I’m talking direct taxes, immediate taxes and long term taxes, at an increased rate in construction. How is that better?

Not to mention that it would include Katz selling the team at a reduced rate, he bought the team for that much or more, he would be looking around 280-300 to sell the team, if the city or a local buyer could not be had in say 30 days he would be free to move else where.

Again not an ideal situation to be put in and Katz needs to share the blame, but not at the expense of loosing the team or the arena

Avatar
#66 jake
September 25 2012, 11:38AM
Trash it!
0
trashes
+1
0
props

Wayne Gretzky on Hockey Central noon. Zero - his answer when MacLean asked the chance they allow a move of Oilers out of Edmonton. Apparently he was in Seattle with the gang watching the NFL game. He said he "kinda likes that old building" "had a lot of fun there". There ya have it.

Avatar
#67 book¡e
September 25 2012, 11:54AM
Trash it!
0
trashes
+1
0
props

@Walter Sobchak

Katz can't move the team - the NHL won't let him - there is no way it could do so and maintain any level of confidence with other cities.

$6-8 million per year is a lot of money and could fund a lot of things in this city.

I don't blame Katz at all for trying to get as good of a deal as he can, but I do not at all appreciate the approach he is taking.

I think Mandel's call this morning for the Oct 17th sit down was a good one - he called Katz' bluff and I think that it will work out well for the City.

Avatar
#68 book¡e
September 25 2012, 11:55AM
Trash it!
0
trashes
+1
0
props

@jake

Ok - All is forgiven for Gretzky.

Avatar
#69 Hammers
September 25 2012, 11:59AM
Trash it!
0
trashes
+1
0
props

I just posted on Gregors blog . Hit Mr Katz in the pocketbook . If the 100,000 + fans boycott Rexall Drugs maybe he will feel it. Maybe that also would send a message re the lockout . These owners all have other businesses across North America . The fans can do nothing about hockey but just maybe we can send a different message .

Avatar
#70 David S
September 25 2012, 12:20PM
Trash it!
0
trashes
+1
0
props
Captain Obvious wrote:

If people are going to have an opinion on this deal they might as well base it on some facts.

Fact #1 Publicly funded arenas are in general bad economic investments for cities. All economists (i.e. 100% agree on this). In those rare cases where an argument for publicly funded arenas make sense in particular circumstances the break even point is somewhere around 20% public investment.

Fact #2 Katz not only wants a 100% publicly funded arena but he wants operating subsidies on top of that funding. The technical details surrounding the deal conceal this.

These are the facts. I was willing to support the original deal because of the intangible benefits to me personally, and because of the aesthetic appeal it would mean for downtown. However, intelligent conversation on the arena begins with recognizing that the original deal was a bad economic deal for the citizens of Edmonton.

However, we are well past the breaking point. If saying no to the arena means Edmonton loses the Oilers I am fine with that trade.

The city has leverage here. Edmonton doesn't need the Oilers. If he doesn't want a 10% return on investment here I am perfectly fine with the Oilers leaving forever. In fact, as an Oiler fans and an Edmontonian, I would rather the Oilers leave than engage in terrible public policy.

So paying $100M worth of the mortgage and giving up $125M in ticket tax somehow equates to "100% publicly funded arena"?

The operations expenses were to be covered by a casino on the premises, which the city was supposed to facilitate. Either they haven't been able to make it happen or just never got around to it. This was part of the original deal. The operation expenses were on top of the $100M, not a substitute. You're double-dip accounting if you make that assumption.

Avatar
#71 DMan
September 25 2012, 12:20PM
Trash it!
0
trashes
+1
0
props
book¡e wrote:

Bill, the city manager himself is part of the negotiating team which demonstrates a pretty serious level of commitment by the City.

I'm sorry - to me, that's not good enough... The city manager still would need to report to council so they could deliberate whatever he's done... Again - I am not going to try to pretend to understand how busy the council is with running the city, but council needs to be more involved...

Avatar
#72 DMan
September 25 2012, 12:28PM
Trash it!
0
trashes
+1
0
props
David S wrote:

So paying $100M worth of the mortgage and giving up $125M in ticket tax somehow equates to "100% publicly funded arena"?

The operations expenses were to be covered by a casino on the premises, which the city was supposed to facilitate. Either they haven't been able to make it happen or just never got around to it. This was part of the original deal. The operation expenses were on top of the $100M, not a substitute. You're double-dip accounting if you make that assumption.

I would also like to see documentation on these economists you continue to refer to... The City of Edmonton themselves has projected the amount of money coming in to the downtown core (over the life of the arena) is again projected anywhere from $1.4 million to $3.0 billion... Perhaps these economists are referring to money going directly into city coffers rather than the businesses the arena would attract?? If so - fine, I get your argument... The city invests $225 million and doesn't see the entire amount back in return?? Granted - with the projected increase in property taxes, I still don't see that, but the council is also responsible for improving the overall business environment of the city along with promoting culture... A downtown arena accomplishes both tasks...

What are you trying to say that I'm missing?? Why would this investment be a terrible public policy??

Avatar
#73 DMan
September 25 2012, 12:30PM
Trash it!
0
trashes
+1
0
props
David S wrote:

So paying $100M worth of the mortgage and giving up $125M in ticket tax somehow equates to "100% publicly funded arena"?

The operations expenses were to be covered by a casino on the premises, which the city was supposed to facilitate. Either they haven't been able to make it happen or just never got around to it. This was part of the original deal. The operation expenses were on top of the $100M, not a substitute. You're double-dip accounting if you make that assumption.

I would also like to see documentation (Captain Obvious refers to) on these economists he continues to refer to... The City of Edmonton themselves has projected the amount of money coming in to the downtown core (over the life of the arena) is again projected anywhere from $1.4 million to $3.0 billion... Perhaps these economists are referring to money going directly into city coffers rather than the businesses the arena would attract?? If so - fine, I get the argument... The city invests $225 million and doesn't see the entire amount back in return?? Granted - with the projected increase in property taxes, I still don't see that, but the council is also responsible for improving the overall business environment of the city along with promoting culture... A downtown arena accomplishes both tasks...

What is he trying to say that I'm missing?? Why would this investment be a terrible public policy??

Avatar
#74 lolhockey
September 25 2012, 12:31PM
Trash it!
0
trashes
+1
0
props

Not the best 'WHAT DOES IT ALL MEAN' photo... but I've seen worse.

Avatar
#75 DMan
September 25 2012, 12:34PM
Trash it!
0
trashes
+1
0
props
dawgbone wrote:

He's not paying $100 M of the mortgage though. Part of that $100M is coming from the city in terms of advertising.

And the $125M in ticket tax isn't his either. The city is fronting it and it gets paid over time.

In any case, the original deal was bad, the new one he's trying to pull is much, much worse.

I guess whether the deal is good/bad is determined on your point of comparison... If you look at Quebec who's paid every penny publicly - this deal is great... If you compare to what Hansen in Seattle is looking at doing - this deal is atrocious..

Personally, I still like the idea of investing in this project... The downtown core would be revitalized significantly and the city should be involved... Now of course, I don't believe Katz should be getting everything he wants but a world class facility worth $450 million with an initial $225 investment doesn't sound so bad considering the offshoot revenue the arena would bring ($1.4 to $3.0 billion)...

Avatar
#76 Bill
September 25 2012, 01:17PM
Trash it!
0
trashes
+1
0
props

@DMan

"What also bothers me is that we consistently hear that the city council is relying on the City's administration to negotiate the deal... If deal was as precious to council - why doesn't council have a couple of alderman as part of the negotiating team?? If there is an impasse on a particular issue - wouldn't the group save time by having someone within the city who 'signs the cheques' to answer those questions?? I am by no means an elected civil servant (perhaps its unfair for me to criticize), but to me - this doesn't sound as much of a priority as we'd like to think..."

I think you've hit on something, it's probably hard to get down to the brass tacks when Katz has his minions fronting him, and the city has their bureaucrats. I can't imagine that these 2 groups of people speak the same language....so how can they resolve the issues? This is probably the huge reason why this has moved at the rate it has.

I'd strongly suggest an independant mediator to get the obstacles in the open. Once everything's clear, maybe the parties can move to compromise.

Avatar
#77 DMan
September 25 2012, 01:41PM
Trash it!
0
trashes
+1
0
props
Bill wrote:

"What also bothers me is that we consistently hear that the city council is relying on the City's administration to negotiate the deal... If deal was as precious to council - why doesn't council have a couple of alderman as part of the negotiating team?? If there is an impasse on a particular issue - wouldn't the group save time by having someone within the city who 'signs the cheques' to answer those questions?? I am by no means an elected civil servant (perhaps its unfair for me to criticize), but to me - this doesn't sound as much of a priority as we'd like to think..."

I think you've hit on something, it's probably hard to get down to the brass tacks when Katz has his minions fronting him, and the city has their bureaucrats. I can't imagine that these 2 groups of people speak the same language....so how can they resolve the issues? This is probably the huge reason why this has moved at the rate it has.

I'd strongly suggest an independant mediator to get the obstacles in the open. Once everything's clear, maybe the parties can move to compromise.

An independent mediator would be a great idea - but a bit of a pipe dream consider how Katz prefers to deal...

Avatar
#78 Dman
September 25 2012, 04:36PM
Trash it!
0
trashes
+1
0
props
Captain Obvious wrote:

See the Zymbalist report, or really any of the economic literature on sports arenas. Now that report was commissioned by Northlands but it is based upon independent, peer-reviewed, research.

The city of Edmonton is projecting 1.4 to 3.0 billion dollars of revenue because they are trying to sell the deal. However, that isn't new revenue to the city, it is revenue that either is redirected from investments that would have occurred elsewhere or is part of the normal inflationary process of development.

Second, sports teams do not contribute a lot to local economies. The reason is that the income they capture is discretionary, which means they take money away from other local entertainment options, while a large amount of their expenses escape the local economy.

Third, to respond to David S's point, the ticket tax is not money that Katz is putting up. While it is true that it is revenue that he is foregoing, if the team did not exist that money would be spent elsewhere in the economy which would in turn drive exactly the kind of investment the arena is supposed to produce. A tax is still a tax. It is not money that Katz is spending.

Add all these things up and a new arena will not provide an economic benefit to the city. On this, all economists agree. There are no success stories.

Now there is benefit in redirecting investment towards downtown. However this is not a net benefit, or if it is a net benefit, it is small. It does make the city better, however a publicly funded arena of this kind is a bad way to achieve this goal if the % of funding gets too high because it prevents the city from doing other things that could accomplish the same goal. Opportunity cost, and what not. Zymbalist recommends 20% public financing. There is room to quibble over the precise numbers but the chasm between a reasonable deal (say 25% financing) and what Katz wants is so large that there is no argument to be had here.

I just reviewed the Zymbalist report... First and foremost - his report was more of his opinion rather than substantiated fact (IMO) but let me recap for you a couple things that I found...

#1) And I quote Edmonton should "consider serious proposals for a new arena of for a significant renovation to Rexall Place to bring up to NHL standards"...

#2) an arena does not raise employment or per capita income levels...

#3) the report uses Columbus, Indianapolis, LA and San Diego as comparisons

First - even the economist you refer to has stated that something NEEDS to be done... Granted he recommended that the city shouldn't fund more than about 20% - which equates to $90 million - but even he is admitting that someone whether it be Katz or the city or together needs to do something...

Second - the argument I'm making isn't that the arena will improve the quality of life for the people there... I'm saying it will add more money and tax revenues to the city... The economist's again you refer to argue that the tax revenue moves from one point to another... That's a fair point - assuming we had a mecca of economic activity anywhere else in the city... Currently, we don't have one before, during or after an Oiler game or any concert... A new arena won't pull revenues from other areas of the city - it will create a new one to supplement the current areas we have, which are far and few between...

Finally - the basis of the argument are the cities of Columbus, Indianapolis, Los Angeles and San Diego... Those markets are not in comparison to Edmonton's economy... First - only Columbus and Los Angeles are the only two cities that have hockey teams (that have different revenue streams than we see in the MLB, NFL or NBA). Those hockey teams also trail behind the NFL, MLB and NBA in popularity and market share... In Edmonton - the Oilers have no competition... Again - comparing the two are comparing apples and oranges... A better comparison for the Edmonton market would be Vancouver or Toronto where these teams to face the same competition...

I also note the concern that funding an arena would pull funding from other vital areas... As Edmonton isn't a corporate juggernaut like Calgary or Vancouver or Toronto - I ask you what other revenue-generating activities would you spend the $225 million on?? The downtown core isn't vibrant and asides from another museum or art gallery, I can only see the city spending more money on road repairs, snow removal and other maintenance activities...

And finally - not all economists agree on this.... The report refers to only two economists... I'm sure we can dig up other opinions that would support additional public financing... I'm sure the mayor of Quebec had some educated people suggesting that a downtown arena will aid his city...

Avatar
#79 jr_christ
September 25 2012, 04:49PM
Trash it!
0
trashes
+1
0
props

Haha oh man I get a real good kick out of Edmontonians standing up right now saying "IF THEY WANT TO LEAVE... LET THEM."

Are you kidding me? The Oilers are a huge part of Edmonton and the city just wouldn't be the same without them.

I don't agree with the Katz funding model either, however, he is the only one who has actally come up with a plan to build a new arena. No owner would ever pay for the majority of the building in a market like Edmonton. It's just not viable.

Unfortunately, this is business - and it kind of sucks. I definitely feel like Katz is taking advantage of the Citizens which is really odd. It's like this greedy bastard came out of no where... but now we are stuck with him for now.

Many we should put up a bunch of Calgary Flames stuff all over his home...

Avatar
#80 Wanye
September 25 2012, 05:02PM
Trash it!
0
trashes
+1
0
props
"Mr. Katz gave a long and meandering interview ("the White Album") in which he expressed frustration over the long and drawn out process"

I love you Lowetide.

Avatar
#81 Pouzar99
September 25 2012, 06:05PM
Trash it!
0
trashes
+1
0
props

''We are extremely grateful to Oilers fans for their patience and loyalty as we work trough the process towards what we sincerely will be a long and successful future for the Oilers in Edmonton. We have no further comment on the status with other markets at this time.'' Excerpt from team press release.

Seen in another context. ''I would like to thank my wife and children for their patience and loyalty and sincerely hope we will enjoy a successful future together. I have no comment to make at this time but the other women I have been boning in Seattle, Quebec City and Hamilton while I consider my options. Love Daddy.

Avatar
#82 Burban
September 25 2012, 07:02PM
Trash it!
0
trashes
+1
0
props

I have three thoughts to comments on this blog:

1. If the casino was originally apart of the arena deal, I don't understand why Mr. Katz left it up to the city to lobby the province. You cannot convince me that a man worth $2 billion doesn't have connections within the provincial government to help move along the casino for the entertainment complex he wants to build.

2. I have heard others on 1260 or 630 say this and I agree, if Gretzky can leave Edmonton right after winning a cup, then anything can happen, including the Oilers leaving our city.

3. I don't understand if there is an impasse on the price of the facility, then why doesn't one of the two side create at IPO for weather it be an ownership stake in the Oilers or the Arena, I know either one I would pay into myself.

Avatar
#83 B S
September 26 2012, 10:06AM
Trash it!
0
trashes
+1
0
props

@JonW

A little out of date. The Tories said they don't want to fund the museum anymore, and I'm doubting the feds will fund it either given their outright hatred of anything scientific or informative at the moment.

And yes, for a Billionaire, Katz seems to think he has more leverage than he does, not exactly good business acumen. Threatening to move a team in a profitable market to a 4th string arena, still not owned by him, during a lockout, is possible the stupidest thing I've heard in a while.

"If you don't pay me to keep the Oilers in a publicly funded, but privately owned arena where they aren't going to play given the constant string of lockouts, I'm moving this non-team to some selfish union friendly hell-hole like Quebec City."

Avatar
#84 Morgie99
September 26 2012, 05:12PM
Trash it!
0
trashes
+1
0
props
David S wrote:

So paying $100M worth of the mortgage and giving up $125M in ticket tax somehow equates to "100% publicly funded arena"?

The operations expenses were to be covered by a casino on the premises, which the city was supposed to facilitate. Either they haven't been able to make it happen or just never got around to it. This was part of the original deal. The operation expenses were on top of the $100M, not a substitute. You're double-dip accounting if you make that assumption.

David S, is the S for Staples?

If that's the case, then I know what you'll be arguing for, I digress

I could careless if the Casino was part of the original deal

It's insane the deals pro sports requires, especially the NHL

It's too f-ing much, period!

The CRL would have to be a slam dunk to do anymore, and even then nothing is guaranteed with projections in real estate building

Enough for Katz in the original deal

His EGO will kill this deal if we don't get on our knees and start sucking

Avatar
#85 Morgie99
September 26 2012, 05:24PM
Trash it!
0
trashes
+1
0
props
JonW wrote:

I am still trying to understand why people think museum = arena. The big difference is no other levels of government are funding the Arena. The RAM is being built with a combo of Fed and Provincial funding. Two are not even close to similar.

Katz group taking credit for paying for half of the arena better look at their numbers again. 125 million coming from the ticket buying public in the form of a ticket tax is not his money. Unless he is planning on charging fans the equivalent amount less in ticket prices (we know how that works)this is propaganda plain and simple.

This move by the Katz group yesterday really angered me. I was a supporter of public money for the arena. I believe the deal is not great but it should work over the long term as long as the surrounding area can fund the CRL. But the idea that somehow the Oilers are subsidizing anything is ridiculous. Far from it the CRL will be only dedicated to funding the arena until it is paid off so no tax money goes anywhere else during that period.

This means a significant drain on possible funding. Now we can argue that this funding would not exist without the arena but lets not make it out as some kind of free found money.

And it is not equal to funding older neighbourhoods or newer ones because the total cost of the arena may do little to entice people to flock downtown. Or create multiple jobs past construction. If anything it is a nice to have which MIGHT trigger a small amount of development.

The concept that somehow the Oilers are the white knights in all this I would have hoped is passed. Pocklington at least gave the city Five Stanley Cups before his business collapse created the horror scenes in the early nineties. Katz so far has offered up a poor product a premium prices with threats to move to places in no position to accept the team.

Great move, man I am so negative compared to a year ago on this.

Jonathan,

Brilliant again, you really make far too much sense and logic, god bless you! Truly!

People don't grasp the ticket tax at all and suggest Katz is losing/contributing at that same equivalent amount, which is simply not true.

Even if someone believed that premise, it's not dollar for dollar, that is, if ticket tax is $1 dollar per ticket, that doesn't mean Katz can't sell tickets for $1 dollar more of course, but if the ticket tax was $25 dollars per ticket on average, then perhaps.

so if my math is correct, if it was dollar for dollar a $125 Mill ticket tax would mean Katz loses the opportunity to charge $125 Mill more so 125/125 = 1, dollar for dollar

at 25/125 = .2 or twenty %, or Twenty cents on each dollar of ticket tax.

So .2 x 125 Mill = 25 mill Katz loses by Ticket tax potentially or much much less, since people will pay anything it seems for tickets

Comments are closed for this article.