In a stunning victory for Mayor Stephen Mandel, the Edmonton city council voted 10-3 last night to approve an arena deal for the Oilers … okay, wait, actually to approve a financing plan for an Oilers arena … sorry, that’s actually to create “a financial framework the administration must use in negotiations with Oilers owner Daryl Katz.” So maybe not quite as stunning as it first appeared, given the over-the-top headlines.
As for the details of the plan, they are:
- The arena cost is capped at $450 million.
- $125 million must be raised via a ticket tax.
- The province will kick in $100 million.
- A Community Revitalization Levy kicking back taxes in the arena district will raise $20 million, down from $125 million in earlier plans
- The missing $105 million will come from a $2.5 million a year subsidy that the city currently pays to the Oilers, plus increased parking revenues.
- The city will own the arena.
- The Oilers will pay operating costs.
Needless to say, there are still plenty of holes in this plan, starting with the fact that the province of Alberta hasn’t yet committed to its $100 million share. Also, Katz wrote to Mandel last week that he’s opposed to a ticket tax — as you’d imagine he would be, since it would effectively limit the amount of cash he himself could pocket from ticket sales. And there’s still the question of the lease, whether Katz would pay any rent, and who would get money from such items as naming-rights sales.
All in all, it’s not the worst arena proposal ever — Katz would end up paying for about half the construction cost, counting that ticket tax — but most of the heavy lifting is now kicked over the the province, which must consider the precedent it would set for the Calgary Flames, who are looking for arena funding of their own. So while it’s kind of nice that the Edmonton council has drawn a line somewhere in the sand, this still pretty much comes down to a magic asterisk.