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.

  • 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!!

  • Spartacus

    Ya, and when I hired on to my current position, I contemplated 25% annual raises.

    I’d like to implement those now, please.

    Daryl Katz makes me miss Peter Pocklington.

  • vetinari

    In the new NHL, the Oilers are a ‘have’ team and sell out every night… they are not going anywhere. I guess that the best way to become a billionaire is to use other people’s money wherever possible.

  • longbottom/P.Biglow

    Bettman wrote the last cba and now he says it wasn’t good enough.

    Katz signed off on a deal with the city for the arena.Taking lesson from Bettman he now says the deal he signed is not good enough.

    He has learned well from Bettman.

    • Jason Gregor

      They never signed off on any deal. The Mayor even said that. That is the biggest problem with this negotiation is that they’ve never had a signed deal in place. UGH.

  • 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.

  • Jordan McNugent-Hallkins

    I believe the Oilers aren’t going anywhere anytime soon, regardless of the outcome of the arena deal, so it’s kind of annoying to see the subtle fear-mongering like Mackinnon’s article title.

    • Zamboni Driver

      by anytime soon you mean in two years. Lease is up in 2 years, if the dollar drops in value which I’m guessing will happen sometime. Lets say the dollar drops to 80 cents, the Oilers will be gone so fast your head will spin, and if I was Katz I would move them as well. I think we all know Winnipeg and Quebec lost their teams not because of lack of fan interest because they didn’t have a suitable arena. Katz and Mayor Mandel need to get this done one way or another.

    • longbottom/P.Biglow

      One other thing to consider is look at both Winnipeg and Quebec City, Both has thriving teams when they lost the team to a low dollar. (around what 68cents to the American dollar) Let me see if I get this right since all Salaries are paid in American dollar the teams then were paying 1.32 for every dollar spent.
      Now 15 years later the cities of Winnipeg and Quebec city are trying to get back in the NHL.(actually Winnipeg did it last year)It isn’t for the pride of the team Winnipeg could have stayed with the moose if that was the case. They wanted back in because of the economic spin-off of the team. I have never heard exactly how much of a spin-off it is but it is guesstimated at north of 100 million a year to the city and other businesses. These are things to be considered before complaining that the Oilers are getting public hand-outs.

    • longbottom/P.Biglow

      While I do agree with you about Mackinnons article,(I favor Mr Staples for how well thought out and balanced it was), Do not kid yourselve about the Oilers moving for one second. I have seen this happen twice when Polkington and then with EIG. To put it in terms someone like me can understand Hockey is a business and if there is a city that offers a better deal the Edmonton how much nudging would it take to see them off to Seattle or Quebec city. I would actually laugh at the irony if they did move to Quebec City. The building is getting built on public money mainly the Transfer payments from Alberta then to have them move to that very city. Hmmmmmm makes one think.

  • I tried it at home

    Hey, its 2 AM, why not say something… I hope to Thor that Mssr’s Staples and MacKinnon held Katz’s toes to the proverbial flames. I honestly do favour his arguments over that of City Council, but if there was 10 ways to make it look good to the fans, this guy would want to try #12. I get the whole ‘reclusive billionaire’ thingy, but its time he realised, the Oilers are a sacred trust that he holds, in partnership with the great unwashed hordes, who bought into the whole rebuild and have supported him, one lottrry pick after another. Get over yourself, Darryl, and start actually communicating with Silly Hall. Theres a lot of great hockey coming, and I think I deserve to watch it here.

  • Spartacus

    Thanks for this. I thought that I had heard last year that the casino idea was a no go. I would certainly support this option and I hope the provincial authorities agree. It could be the solution needed to proceed. At least, I hope so.