DARYL KATZ SPEAKS ABOUT ARENA

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.

  • Quicksilver ballet

    All this window dressing is getting tiresome. They keep dragging this thing through the mud so it appears as though the City Edmonton, and it’s taxpayers, are getting the best deal possible. What a farce.

    The Katz contribution is spread over 30 yrs. Now he wants the city to reimburse him by returning 6 million every yr in operating costs. That’s considerably more than his annual contribution to this project. 15 yrs into this venture he won’t have a nickle of his own money in this thing, yet he’ll control 100% of the operating profits. Dunce caps for the taxpayers all around.

    For a multi billionaire, he certainly appears to be on his knees without access to taxpayer money. Take your puck, your last place hockey team and go home to Vancouver.

  • Jprime

    Katz didn’t get this rich by making poor financial/business decisions. What he has said in the interview isn’t crazy.

    The council worry more about their own jobs than the overall long term picture of the city.

    Katz has invested a ton towards this city outside of just buying/paying the Oilers. He’s committed to helping this city grow and to be profitable from it. Who wouldn’t?

      • Jprime

        Arguable both ways.

        He’s an Edmontonian. I would like to at least think he would be somewhat inclinded to be wanting to help his home town grow.

        What is his mission exactly? Make money? I am sure that is what most of us do on a daily basis. Try and be profitable.

        Edmonton may be a small market but it has done of potential and growth value. Especially with the economical state of our province.

        So, he zoned in on a good oppurtunity that so happens to be the city that he grew up in. If I were in his position – I’d be doing the same.

  • mr_nihilism

    Whatever happens, I just hope Edmonton’s public art policy doesn’t somehow get into the mix of the arena deal. I do not want giant stocking feet or shiny balls at Rexall entrance.

  • Helmethead

    Time and time again, the city councilors past and present have let the citizens of Edmonton down with their incessant and sometimes blatant ignorance of what it takes to be known as a world class city.

    The latest news report states that councilors are in the process of developing a beach along the North Saskatchewan river. What the hell for? Although they did admit that the beach could not be used as a landing spot for recreational swimmers due to extremely poor water quality, they’ll still pursue the idea because they feel having a beach built within one of North Americas biggest metropolitan park spaces will lure people to the city. In the same report, it was mentioned that the city forked out 60 MILLION dollars for the beach front that lines the “lake” in Hawerlak park. When was the last time these councilors did any research on Geese and other birds who call Edmonton home? What do birds have to do with Hawerlaks Beach? Certain species of birds naturally habitat near open water sources like the one at Hawerlak Park. Having a beach that is littered with feathers, feces and hostile animals is what I call a huge waste of taxpayer dollars.

    Then there’s the new ring road. These councilors approved plans to build it but didn’t they know about the traffic issues along the Stony PLain Road intersection? Of course not. So they continue with the project only to rip it all up to build an overpass. Are you kidding me? How much extra dollars did they have to ask for from The Government of Alberta in order to fix their gaff? How did no one in city hall not get fired for this massive costly blunder? And after only 5 or six years of the road being used it’s constantly under construction. Did they not build it right the 1st time? It just flabbergasts me at how much money they throw out away by not being prepared or failing to plan.

    The snow removal budget has been amended so many times I’ve lost track. Every year they approve “x” for snow removal and every year they fall short. Don’t they know what having a surplus or contingency fund is in case Mother Nature dumps more snow one year to the next? Do they not understand that SNOW IN EDMONTON IS A FORE-GONE conclusion so the removal budget shouldn’t be tampered with each and every year?

    SO am I surprised at all of this arena talk over the last 4 and1/2 years?Not in the least. It’s a constant back and forth with members of this council who collectively can’t decide on anything except on how to spend money in areas of development that aren’t necessary. They like to pick fly sh!t out of pepper when it comes to this arena but lack any accountability and vision in other areas. Surely all of these brainacs can come up with something that resembles fiscal responsibility while encouraging city growth. But having said that I’m not so sure anymore based on their “cries” to the public for support to mask their own internal deficiencies.

    I hope Katz doesn’t get a deal done. I hope the Oilers consider relocation. This city will absolutely crumble when it loses all of the spin off money from having an NHL franchise.

    I’d like to see councilors Krushell, Diotte, Anderson, Caterina, Henderson and Sohi sitting in Hawerlak Park asking the geese for money to pay for their 60million dollar toilet bowl.

    • Zamboni Driver

      My my, that was quite a rant.

      Tell me this.

      You bother to vote in the last civic election?

      Cue the “Why should I, these guys are all crooks and losers”- nonsense.

  • Zamboni Driver

    I would direct blind-faithers to Batman’s line in MacKinnon’s piece.

    Talking about corporate customers.

    Apparently the last place-last place-second last place finishes accompanied by sell outs every night are not good enough for Mr. Wayne.

    Turns out, he doesn’t like the KIND of people that come to the games.

    Charming.

    Stauffer to the rescue!!