MAYOR PUTS ARENA DEAL TO BED...AND MORE....

Jason Gregor
May 17 2013 12:23PM

Rumour has it this picture was taken at city hall early this week when the 7-year arena deal saga finally ended. City council voted 10-3 in favour of the final funding model, and unlike previous votes this should be the final vote as council waived the conditions, according to mayor Stephen Mandel.

The mayor made a quick appearance on my radio show on Wednesday, and he gave Mark Spector and I a quick recap of the arena deal and how we can finally move forward on the project. 

Jason Gregor: Does today finally feel like the project is complete compared to other days in this process?
Mayor Mandel: I thought it was complete lots of other time, so… But I think today is the culmination and that everything seems to be in place, and it will move ahead.
Mark Spector: What about the things around the arena, when do the plans begin to break ground for the other developers?
MM: Well there are a couple of high-rise condos being built right now; there are a couple of other projects underway that will take the time it takes them. Mr. Katz has a bunch of projects planned and we hope that those will move ahead. But that is not something that we control, people have to make an investment and we think they will because it will be profitable, and we will go from there.
JG: I think that the arena is a solid central focus, but to really revitalize it, to really make downtown prosper, we need proper revitalization around it. Is there any sort of protection contingency in place to ensure the surrounding development actually occurs?
MM: No you can’t mandate people to spend a whole bunch of money. It has to be feasible and we hope that once this is now finalized that people will look at building stuff. There are lots of plans, developments, that we hear about constantly going ahead once the arena is finally put to bed. So we will see what those are. We expect them to be substantial. I would say there are maybe two or three multi-million dollar projects that are going to go ahead. This is a lot of money.
MS: This became a project that you guys seemingly just couldn’t let get away. It was a lot tougher negotiation, I will assume, than you thought in the end. But in the time that you got that close to the finish line, with everything that you just spoke about at stake, did you feel as the mayor of this city that this is just one that you couldn’t let get away on you?
MM: There are lots of projects that we’ve done which we believe were equally important. This was very special, I mean the downtown museum, the Alberta Museum was very special. This will act as a catalyst to bring 18,000 to 20,000 people downtown 200 nights a year.
We think it’s going to create opportunities for businesses downtown, solidify businesses downtown, and open up the doors for investment. So this is important. But it’s also a statement about Edmonton and that you believe in the city, that it’s a great city and it can support something like this. So it was really a statement about Edmonton and I’ve got to give Daryl Katz the credit. He persevered and he’s a tough guy to negotiate with, but that’s his choice. But the fact is that he had a vision and hopefully that vision will materialize in the areas surrounding the arena, but also in the arena. 
JG: One of your councillors, Kerrie Diotte tweeted out afterwards that part of this deal is contingent on $7 million from the federal government and according to his sources they’ve never even been approached on that. Is there any truth to that?
MM: You know, Kerry Diotte can tweet what Kerry Diotte wants to tweet. He wants to represent what he wants to represent. We will apply for money from the federal government under the building Canada program which we’ve talked to the MPs about and this project will qualify for it. There hasn’t been an application for it yet, because the money hasn’t been put available. So that’s how little Kerry Diotte knows. Maybe he should do some homework before he tweets all of the time.
 
MS: You guys were in Brooklyn earlier this week touring around the new Barkley Centre which is widely acclaimed as a state of the art arena. What were your thoughts on that and how it might compare to the new arena in Edmonton?
MM: That won’t even be close; ours is going to be 20 times nicer. The corridors are too narrow, they didn’t have enough space. Our arena is going to be much more spectacular than theirs. Their outside is… and this isn’t belittling it because they have a wonderful facility, but their corridors are very narrow because they have a very small site. The land over there is probably worth more than $2000 a square foot. So ours will be much more spacious. The arena that’s going to be built in Edmonton is going to be a very special, special building and it’ll be the nicest one, of its kind in North America when it opens.
JG: Who has the say on what goes into the arena? The city has put in some money, so is the city part of the group who has a say in the design?
MM: That’s a cooperation between the Katz group and the city and we’re working together to come up with the best package for the greatest amount of aesthetics. We have a budget that we have to work with and the most important thing about this is that we build it so that it is a special building, which we will, which is within a special budget, which we have. So hopefully when it’s built people will come in it and they will go ‘wow.’ I think that when they approach it they will go ‘wow’ when they go in it they will go ‘wow.’
MS: They talk about construction next spring. Can they start to dig the hole sooner than that? I know that there is supposed to be several floors of parking underneath. We will start to see activity before next April?
MM: I would hope so, but I can’t comment on that. As soon as possible, we get the GMP (guaranteed maximum price) then we would start construction. So they’re getting close to that. I don’t know why it takes so long, but I’m not a contractor.
JG: Mayor, congratulations for sticking with a project that I’m sure at times infuriated you. On behalf of all Edmontonians, I say that we appreciate your leadership throughout this process.
MM: I thank you as the sports community who were very important; to make sure that the naysayers didn’t have all of the space. I appreciate all the people who stood up for this project. People like to misrepresent information because they want to state their position and it’s sad when people do that.

BREAKDOWN OF COSTS...  

The total cost of the arena is $480-million and here is the breakdown:

  • $120 million will come from the community revitalization levy,  (CRL) which will get approval next month. This is not current tax payer dollars. The levy will use the projected $2.6-billion increase in taxes from around the arena to pay off the arena loan and fund other downtown improvements. I asked what happens if there is shortfall in the CRL, but I was told by numerous councillors and others that they are confident that won't be an issue since the $2.6 billion is a very conservative number. As long as there is no shortfall, the CRL is a good idea.
  • The Katz Group will pay $130 million (in cash and in rent).
  • Ticket surcharge will make up $125 million.
  • $25 million will come froma provincial fund for regional projects.
  • The final $80 million will come from other city funding areas, such as parking fees. Northlands currently receives an annual subsidy of $2.6 million a year for letting the Oilers play rent-free at Rexall Place, and that amount will be part of this $80 million.

When those who oppose the arena claim that the money should be going towards potholes and other areas, remind them that the majority of the funds aren't from Edmonton taxpayers. You should also note that claiming healthcare and education should come first, doesn't relate to this project. Healthcare and education funds come from the province not the city, and the province has only injected $25 million from a fund that supports projects. So none of this money is stealing away from our education and healthcare, thankfully.
 
The tax money derived from the CRL only occurs if the arena, and the subsequent development that will follow the arena, is built. If the arena and the development doesn't happen the city wouldn't get that much money in CRL, so I don't see the CRL as money that is stealing from our pothole problems.
 
Of course the deal isn't perfect, but I think it is pretty fair and consistent with previous deals when you consider the ratio of private and public funds.

QUICK HITS

  •  I might be in the minority, but I don't mind the delay of game penalty for shooting the puck over the glass in the defensive zone. If the rule wasn't in place defensive players would be firing the puck over the glass all the time. Chris Chelios used to do it often, and with precision. You might not want a playoff game decided on that type ofpenalty, like last night in Los Angeles, but I prefer the odd penalty to the alternative of pucks constantly flying out of play.
     
  • Jordan Eberle has been to the World Championships four times, and his team has lost in the quarterfinals all four times. I'm not going to suggest the Canadian hockey system needs an overall, but i'd like to think Canada should be able to make the final four at least once every four years.
     
  • Taylor Hall didn't play very much in the tourney, in fact, by my calculations he was 11th in icetime amongst forwards. We can only speculate why he didn't play, but I suspect he wasn't happy about it and this could be a positive. Hall is very competitive and I believe he'll use his lack of icetime as motivation and a learning experience.
     
  • I also wonder if hockey Canada wanted to see if he could produce with limited minutes. If he makes the Olympic team, he likely will be a 4th line guy, and maybe Yzerman and company were watching to see how he'd handle the situation and if he could still produce. It is hard to make an impact in limited minutes, but I think Hall showed he could still be a factor in limited time, and that could help him when Yzerman, Mike Babcock and others pick the final roster.
     
  • The Oilers' AHL affiliate, OKC Barons, are through to the 3rd round of the AHL playoff after a convincing 4-1 series win over the Texas Stars. It should be a great experience for the young kids and the Oilers are hoping Teemu Hartikainen, Tyler Pitlick, Anton Lander and Martin Marincin will grow from this experience and push for a roster spot next season. Toni Rajala, Marc Arcobello and Taylor Fedun have also performed well according to head coach Todd Nelson, but I don't see them being in Edmonton next season.
     
  • The King/Queen of Karaoke party goes tonight at On The Rocks. The lineup looks solid, although Strudwick is a bit nervous, but I guarantee it will be a hell of a fun time. I'd love to sell 32 more tickets to reach our goal. Tics are $25 bucks, all proceeds go to MS Society, but you get $50 in gift cards from OTR and Oodle Noodle when you show up. You can purchase here, support a good cause and have a great time. See you tonight.  

RECENTLY BY JASON GREGOR

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One of Canada's most versatile sports personalities. Jason hosts The Jason Gregor Show, weekdays from 2 to 6 p.m., on TSN 1260, and he writes a column every Monday in the Edmonton Journal. You can follow him on Twitter at twitter.com/JasonGregor
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#1 Rocket
May 17 2013, 12:47PM
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Disappointed with the Canadian world hockey championship result. Cautiously optimistic about the new arena. Hopefully it gets built before global warming claims us all or Jesus comes back.

Go Barons Go!

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#2 Bicepus Maximus - Huge fan boy!
May 17 2013, 12:49PM
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Glad the deal is done. Let's get on with building the best damn hockey (and entertainment) arena in North America!

Regarding Hockey Canada:

This tournament format certainly doesn't suit the better team. Just like one of the Sedins said yesterday, that Canadian team should be the Swedes nine times out of ten in a best of 7 series.

I blame coaching. You know what these European teams will do against you. You need to overcome that.

And I still blame the coaching if execution is the problem. You have the best players in the world!

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#3 David S
May 17 2013, 12:53PM
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This project is going to be spectacular. Agreed that kudos go to all the media guys like Jason and David Staples who were steadfast in presenting a balanced view to counter the "shun the billionaire" jealousy and grade school math. Nice job. See you guys on the concourse in 2016!

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#4 Mike Krushelnyski
May 17 2013, 12:56PM
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I think the format of the WHC has gotten a little wonky. Playing 7 qualification games to get to a single-elimination quarter final is weird to me. I don't think it's conducive to having the best teams play each other for the gold.

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#5 Rocket
May 17 2013, 01:03PM
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Mike Krushelnyski wrote:

I think the format of the WHC has gotten a little wonky. Playing 7 qualification games to get to a single-elimination quarter final is weird to me. I don't think it's conducive to having the best teams play each other for the gold.

Totally agree. Canada vs. Sweden could have been the gold medal game.

Also, how does Russia suck that much? They definitely underachieve.

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#6 Bicepus Maximus - Huge fan boy!
May 17 2013, 01:08PM
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And by the way, this _ _ _-free environment is what a long weekend Friday should feel like. Unlike the JW piece from earlier today that _ _ _ is soiling on in the comments section.

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#7 jeanshorts
May 17 2013, 01:10PM
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Big congrats to my motherland. I'm super happy for you guys and can't wait to finally be able to sit comfortably in a hockey arena and boo the Oilers futility.

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#8 CalgaryOilerFan
May 17 2013, 01:15PM
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Rocket wrote:

Totally agree. Canada vs. Sweden could have been the gold medal game.

Also, how does Russia suck that much? They definitely underachieve.

No YAK!

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#9 YFC Prez
May 17 2013, 01:49PM
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CalgaryOilerFan wrote:

No YAK!

Here Here!!

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#10 Will
May 17 2013, 01:57PM
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It will be so nice to go to a hockey game, and then not have to crowd onto the stupid LRT afterwards.

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#11 JohnnyRocket
May 17 2013, 02:07PM
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The CLR is taxpayer money. Much of that increased revenue is money displaced from other parts of the city. People buying hotwings at a downtown bar are spending money they would have spent buying hotwings at a southside bar. All the money being spent around Rexall Place will now, will just be spent in a different city location. Thus, this is not new revenue. Many studies have concluded the same thing.

So that means 80 million of city revenue and 120 million of already accounted for city revenue (CLR) monay is going into the project. That tax revenue would be used on other things if it weren't being spent on the arena.

And we, the ticket holders, pitch in another 125 million in surcharges.

That is $325 million dollars that comes out of Edmontonians pockets, on way or another.

That leaves Katz's 130 million. Oh wait, most of that is being borrowed at low rates by the city. He is paying it back after the arena is up and making money.

(And don't forget the city is renting some ad space from him for 30 million for some reason. Why we have to rent ad space in a building we built is beyond me.)

Listen, I love the city. I love the Oilers. And I love the idea of a new arena. We need it. But let's all be honest. This is a crappy business deal on the city's part. A billionaire basically got a 600 million arena built with absolutely no financial risk on his part and no money down. City taxpayers and Oilers ticket holders will be shouldering the cost of this arena for decades to come.

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#12 geoilersgist
May 17 2013, 02:13PM
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@JohnnyRocket

Today is positive friday of a long weekend. Lets leave negative Nancy at home.

This arena is overdue

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#13 OilClog
May 17 2013, 02:51PM
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Raajala is playing insane right now.. 4.2 shots on goal a game.. ridiculous.

Hall's lack of use at the world's was pathetic, no matter what the reasoning for benching him was.. pathetic. I hope Ruff coaches in the West next season, with Hall sending him friendly reminders for years on end.

Why was Smith in goal anyways? Devon was clearly the guy.. Way to go Ruff.

Hockey Canada's problem seems to be pretty simple.. Coaching, keep picking the wrong guys for this tournament. Ruff wasn't prepared what so ever.. "I know I'm only going to use guys from the Eastern conference for everything.. Who are these goalies?!?! damn I should of brought one.. you tall guy #1, you play tonight."

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#14 Fresh Mess
May 17 2013, 02:53PM
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David S wrote:

This project is going to be spectacular. Agreed that kudos go to all the media guys like Jason and David Staples who were steadfast in presenting a balanced view to counter the "shun the billionaire" jealousy and grade school math. Nice job. See you guys on the concourse in 2016!

Jason and Staples were about as balanced as the Iraq information minister on this issue.

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#15 cabaj
May 17 2013, 03:05PM
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JohnnyRocket wrote:

The CLR is taxpayer money. Much of that increased revenue is money displaced from other parts of the city. People buying hotwings at a downtown bar are spending money they would have spent buying hotwings at a southside bar. All the money being spent around Rexall Place will now, will just be spent in a different city location. Thus, this is not new revenue. Many studies have concluded the same thing.

So that means 80 million of city revenue and 120 million of already accounted for city revenue (CLR) monay is going into the project. That tax revenue would be used on other things if it weren't being spent on the arena.

And we, the ticket holders, pitch in another 125 million in surcharges.

That is $325 million dollars that comes out of Edmontonians pockets, on way or another.

That leaves Katz's 130 million. Oh wait, most of that is being borrowed at low rates by the city. He is paying it back after the arena is up and making money.

(And don't forget the city is renting some ad space from him for 30 million for some reason. Why we have to rent ad space in a building we built is beyond me.)

Listen, I love the city. I love the Oilers. And I love the idea of a new arena. We need it. But let's all be honest. This is a crappy business deal on the city's part. A billionaire basically got a 600 million arena built with absolutely no financial risk on his part and no money down. City taxpayers and Oilers ticket holders will be shouldering the cost of this arena for decades to come.

I don't know the ins and outs of this deal but I'd like to add what I think are some CRITICAL things to consider here and are not being communicated very clearly by the city/media/katz group. Please correct me if I get facts wrong.

FINANCING:

1. The city of edmonton will own this Arena. Not Darryl Katz. Sure he will be making the lions share of profits but that's because he's investing $130 million dollars and managing operations. He will be paying rent.

2. Admission already has a ticket tax. It is split between Northlands and Katz. In the new Arena, that tax could go direclty to katz but instead it will be diverted to financing the arena for another $125 milllion.

Thats 53% of the arena cost covered by Katz and at the end of it he does not even own this gargantuan asset, he's renting it from the city. Edmonton will own the asset.

URBANIZATION:

Edmonton has the luxury of wide open space, but in a way its a curse because it makes it easy for us to be lazy and sprawl the city out in every direction as we build it. Low population density means unsustainable infrastructure, ineffective public transit, environmental unsustainability, and lack of culture - the long term cost of which dwarfs a few hundred million $ investment. Culture dies in suburbs and strip malls but thrives vibrant and well designed districts. The downtown core is the heart of city and we need to promote its health. A dollar spent at a pub downtown has far more value to this city than a dollar spent at a pub in Windermere just as exercising your heart is far more valuable to you than doing bicep curls.

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#16 ScottieA
May 17 2013, 03:29PM
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The Katz group is already moving forward with one of the EAD towers. Tower D, the office tower planned for the downtown Staples site, is before the Edmonton Design Committee on June 4 for a pre-consultation.

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#17 David S
May 17 2013, 03:44PM
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JohnnyRocket wrote:

The CLR is taxpayer money. Much of that increased revenue is money displaced from other parts of the city. People buying hotwings at a downtown bar are spending money they would have spent buying hotwings at a southside bar. All the money being spent around Rexall Place will now, will just be spent in a different city location. Thus, this is not new revenue. Many studies have concluded the same thing.

So that means 80 million of city revenue and 120 million of already accounted for city revenue (CLR) monay is going into the project. That tax revenue would be used on other things if it weren't being spent on the arena.

And we, the ticket holders, pitch in another 125 million in surcharges.

That is $325 million dollars that comes out of Edmontonians pockets, on way or another.

That leaves Katz's 130 million. Oh wait, most of that is being borrowed at low rates by the city. He is paying it back after the arena is up and making money.

(And don't forget the city is renting some ad space from him for 30 million for some reason. Why we have to rent ad space in a building we built is beyond me.)

Listen, I love the city. I love the Oilers. And I love the idea of a new arena. We need it. But let's all be honest. This is a crappy business deal on the city's part. A billionaire basically got a 600 million arena built with absolutely no financial risk on his part and no money down. City taxpayers and Oilers ticket holders will be shouldering the cost of this arena for decades to come.

You know you pay a ticket tax at Rexall right now, right?

The really cool thing is, no matter how awesome your arguments might seem to you, the fact is there'll be a brand spankin' new rink in 2016 for us to crush Rexall crack beers in.

And no amount of arena hater whining will change that fact. Freakin' love it. BOOM!

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#18 Katzhater
May 17 2013, 03:50PM
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Hey, oilersnation mouthbreathers! The arena deal is con man theft at the expense of citizens. The idiots like you who spend all goddamn day posting, thinking, talking, yelling, and crying about the oilers are the reason Katz can create the illusions of "pressure" and desire for this ethical disgrace.

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#19 David S
May 17 2013, 03:57PM
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Katzhater wrote:

Hey, oilersnation mouthbreathers! The arena deal is con man theft at the expense of citizens. The idiots like you who spend all goddamn day posting, thinking, talking, yelling, and crying about the oilers are the reason Katz can create the illusions of "pressure" and desire for this ethical disgrace.

*fart sound*

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#20 Todd
May 17 2013, 04:13PM
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Katzhater wrote:

Hey, oilersnation mouthbreathers! The arena deal is con man theft at the expense of citizens. The idiots like you who spend all goddamn day posting, thinking, talking, yelling, and crying about the oilers are the reason Katz can create the illusions of "pressure" and desire for this ethical disgrace.

*hugs*

You should meet our good friend DSF and go hang out together.

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#21 Puritania
May 17 2013, 04:34PM
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Katzhater wrote:

Hey, oilersnation mouthbreathers! The arena deal is con man theft at the expense of citizens. The idiots like you who spend all goddamn day posting, thinking, talking, yelling, and crying about the oilers are the reason Katz can create the illusions of "pressure" and desire for this ethical disgrace.

https://www.youtube.com/watch?v=yvllQl5t4Ww

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#22 Next up, is Connor McJesus.
May 17 2013, 05:11PM
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Katzhater wrote:

Hey, oilersnation mouthbreathers! The arena deal is con man theft at the expense of citizens. The idiots like you who spend all goddamn day posting, thinking, talking, yelling, and crying about the oilers are the reason Katz can create the illusions of "pressure" and desire for this ethical disgrace.

We were hoping you could pull this out of the fire for us. Where the frigg were you??? A person of your vast experience/knowledge and you couldn't train wreck this deal on your own. WHERE WERE YOU DAMMIT!!!!!! WHERE WERE YOU????

Man, you sure turned out to be a disappointment, we trusted you to crush this deal beyond repair, and you turned out to be nothing but a lot of hot air on a laptop in your mamas' basement.

Pfft!...we trusted you to put a stop to this project. You said you had all the answers.....LIAR! Now both yours, as well as my tax dollars have to go to this project. Thanks for nuthin bud.

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#23 Rocket
May 17 2013, 09:27PM
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@Katzhater

I don't think calling fans idiots for being excited about the new arena is apt. Fans are smart enough to know the deal is not ideal but are jacked to see an Oilers squad, hopefully a good won, play in a cool barn.

Also, how did you know I breathe with my mouth? I was trying to keep it a secret!

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#24 kgo
May 18 2013, 12:27AM
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cabaj wrote:

I don't know the ins and outs of this deal but I'd like to add what I think are some CRITICAL things to consider here and are not being communicated very clearly by the city/media/katz group. Please correct me if I get facts wrong.

FINANCING:

1. The city of edmonton will own this Arena. Not Darryl Katz. Sure he will be making the lions share of profits but that's because he's investing $130 million dollars and managing operations. He will be paying rent.

2. Admission already has a ticket tax. It is split between Northlands and Katz. In the new Arena, that tax could go direclty to katz but instead it will be diverted to financing the arena for another $125 milllion.

Thats 53% of the arena cost covered by Katz and at the end of it he does not even own this gargantuan asset, he's renting it from the city. Edmonton will own the asset.

URBANIZATION:

Edmonton has the luxury of wide open space, but in a way its a curse because it makes it easy for us to be lazy and sprawl the city out in every direction as we build it. Low population density means unsustainable infrastructure, ineffective public transit, environmental unsustainability, and lack of culture - the long term cost of which dwarfs a few hundred million $ investment. Culture dies in suburbs and strip malls but thrives vibrant and well designed districts. The downtown core is the heart of city and we need to promote its health. A dollar spent at a pub downtown has far more value to this city than a dollar spent at a pub in Windermere just as exercising your heart is far more valuable to you than doing bicep curls.

Best post ever! Cabaj for mayor

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#25 Reagan
May 18 2013, 07:43AM
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It will still look like a giant sperm...

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#26 Gaz
May 18 2013, 08:03AM
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@kgo

This is absolutely correct. I am glad you touched on the sprawl issue.

People seem to forget that their tax dollars are being stretched to the maximum, not by public projects but by the uncontrollable sprawl that affects cities such as Edmonton and Calgary. When a City agrees to development within its boundaries, it commits to providing infrastructure - roads, water, power, garbage collection, etc. With urban sprawl, the population density falls, while the need to supply the infrastructure remains, regardless of the percentage of the population using it.

So, while everyone wants a nice new house with all the bells and whistles, this creates a quandry for the municipality that has to support this expansion. This is why infill and density are a major, major issue for municipalities, because it allows them to leverage existing infrastructure.

Now, an arena doesn't change this by itself, but you see quite clearly the city's direction in focusing on the city center with its major projects, as opposed to say, a museum in Windermere and an arena in Griesbach.

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#27 kgo
May 18 2013, 08:04AM
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that's ralph lang in the picture, with his hands above his head

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#28 gongshow
May 18 2013, 08:36AM
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For all of the heavy lifting that he did for the last 6 1/2 years, Mayor Mandel deserves a shrine of recognition inside Rexall 2. I hope he has it in him to run for one more term, both for the good of the citizens and also so that he has the opportunity to cut the ribbon in 2016.

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#29 gongshow
May 18 2013, 08:38AM
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@cabaj

Well argued.

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#30 gongshow
May 18 2013, 08:44AM
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No Bergeron - too slow for big ice. Was brought to Vancouver as the line R handed face off man but was grossly ineffective.

No Getzlaf - too slow for big ice.

No to Ebs. His clutch performances came on NHL sized rinks. Too slow for big ice.

Yes to Taylor Hall - for his ability to bring speed, sandpaper and touch.

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