Daryl Katz finally broke his silence, and while he didn’t talk to all the media, instead having an arranged chat with Journal writers, John MacKinnon and David Staples, he did give us an insight into what he thinks about the ongoing arena debate.
It is clear he was annoyed at how he was portrayed by some members of city council and media last week and decided to finally speak. I’ve said all along that he needed to speak to the public. Not every week, not even every month, but a few times a year so Edmontonians might get a better sense of what his goals and aspirations are for the city.
You can read Staples’ article here, and MacKinnon’s here.
The title of MacKinnon’s piece will fire people up before they even read it, which is unfortunate, because no where that I read or heard does Katz make a threat that the Oilers will leave. I honestly believe if this deal falls through then no one on council or in the Katz Group has an idea what happens next. It is an option I hope we don’t have to experience.
Katz does bring up a valid point when discussing new facilities in other cities. Only the MLSE was able to successfully build and manage their own rink. Edmonton doesn’t have the population or corporate dollars that Toronto has, so should we really expect our city to function the same way.
Keep in mind that in 1989 Toronto built the Skydome with $570-$650 million (depends who you believe) of mostly taxpayers dollars. So while some in Toronto might want to tell you how great it is that MLSE built their own rink, that wasn’t always the case. In 1994, the Skydome was sold for a measly $150 million after paying off all of its debt. Yikes.
The only way the arena will work in Edmonton is with a private/public agreement. Like I wrote last week, both sides need one another to make this work.
I doubt Katz’ words will change the opinion of those who oppose the arena, but I never expected him to be a magician. Some will never like the deal, so trying to appease them is likely pointless.
I found this excerpt from the Journal’s interview rather interesting.
Katz said he chose to speak up about stalled negotiations because, “there’s a lot at stake and people in Edmonton need to understand the full picture.”
The picture became more cloudy last week, when the subsidy issue, in particular, rankled and blindsided members of city council.
In October 2011, the Katz Group agreed to make mortgage payments of $5.5 million a year for 35 years to cover Katz’s $100-million share of the arena’s construction cost.
Katz also agreed to pay roughly $10 million a year in operating and maintenance costs. To many, that $6-million ‘offset’ resembles a clawback of the $100 million he originally promised.
“I’d like to clear the air on this issue of an operating subsidy,” Katz said. “Because what has come out of the city over the last several days, to be frank, is unfair, untrue and totally counterproductive if what we’re trying to do is secure the Oilers future in Edmonton and have us participate in the development of a new arena and sports entertainment district.”
Katz said a “mechanism to offset capital and operating costs of the new arena” had been contemplated from the beginning of the four-and-a-half-year negotiations, and should not have been a surprise to city council.
“We don’t care if it’s a casino and gaming initiative, or something else,” Katz explained. “We need a mechanism to offset operating and maintenance costs, just like Pittsburgh and Winnipeg.
“Casino and gaming is just one way and it happens to be used in other markets all over North America.”
Katz reinforced the need for a public-private collaboration to build a new arena, one Edmonton badly needs, one the city would have to fund entirely itself if he and the Oilers were not prepared to invest in the project.
Without the Oilers, Katz said, the city “would have to pay all the capital and operating costs, just like Quebec City will, just like Kansas City, just like Phoenix, just like Seattle, just like Hamilton, and just like other cities that would all like an NHL or an NBA team to subsidize their arenas.
It sounds like something was lost in translation. Was this offer contemplated and never pursued, or did the city follow up on this only to be turned down?
I’d like an answer to that question, and after speaking with both Mayor Mandel and city Manager Simon Farbrother last week, I will reach out to hear their thoughts on the matter.
The most positive thing in the Katz interview was that he expressed some urgency to get the deal done. It has been four years, and it is crunch time. I hope that both sides can get back to the negotiating table and finalize an agreement. It would be incredibly disappointing if after four years of negotiating this deal fell apart.
Both sides need to recognize that some mutual compromise and leadership is needed. I hope we see some leadership from both parties as we near the end of this long negotiation.