Oilers reported to mull arena on Native reserve

Notwithstanding the possible breakthrough in getting provincial money for a new Edmonton Oilers arena, team execs appear to be ratcheting up the threat of a Plan B if they don’t get their sought-after downtown facility. A “source close to the negotiations” tells the Edmonton Sun that the Oilers are looking at a local Enoch Cree reserve as a possible fallback site: “They could easily build an arena out there, is what they’re alluding. I don’t know how much is playing poker and how much is reality.”

Cree leader Ron Morin, meanwhile, was somewhat more circumscribed, saying only that officials had spoken with representatives of Oilers owner Daryl Katz this spring about possibly hosting an arena, but that they’d only consider it if a downtown arena fell through:

“We know, without a doubt, the Oilers are Edmonton. Everybody knows that. We’re not trying to disrespect or trying to do anything malicious. What we’re saying at Enoch is, if Edmonton can’t find a way to get it done, then if there’s a chance for all of us to put our heads together — meaning Edmonton, the Katz Group, Enoch, the province — and see if it could work better at Enoch, why wouldn’t we explore that?”

No financial details were provided, so take this with a huge grain of salt for now: Katz needs construction money, not land. But he also needs leverage, so leaking work of another possible bidder — if he’s the one who leaked it — could serve him just as well as an actual workable plan.


14 comments on “Oilers reported to mull arena on Native reserve

  1. Are there native casinos in Canada like there re in the states? I can see an arena as a nice draw for a casino, but presumably the NFL would frown on that.

  2. Joshua:

    Yes, there are. Enoch nation already hosts the River Cree Casino and resort, as well as a golf course. I don’t think the NHL would be at all concerned with the casino aspect. They weren’t with Isle of Capri/Penguins when that was on the table. I think they’d take free money toward an arena from pretty much anybody.

    Frankly, I hope they do manage to work a deal with Katz, as the west end of the city would be a better alternative (still needs traffic infrastructure improvements, but this is a much better location for vehicle (car/transport truck) access than Edmonton’s already congested downtown (which doesn’t, by the way, have anything like direct access to HGV routes).

    No getting around it, if it’s an Enoch proposal, it will include bucketloads of taxpayer dollars, but it might end up being cheaper for the city of Edmonton to kick in something out there than to open the vault for Katz (not to mention all the infrastructure improvements, which haven’t been mentioned in regard to cost projections yet. My guess is they are hoping no-one thinks of that until shovels are already in the ground…)

  3. There are casinos run by Aboriginal bands, however, Provincial gaming laws still apply to them here, so it’s not the same legal situation as the USA.

    An interesting solution, but really smells like a distraction more than anything.

  4. I think it’s obvious that the deal with the City is about Katz making as much money off the team, extracurricular events and the real estate development potential.

    Move this team out to Enoch and you have another Kanata (Ottawa Senators arena’s location).

    This is just a smoke screen.

  5. Here’s an idea: how about the Oilers build a $350 million area instead of a $450 one? You can build a really beautiful arena for that kind of money, and there’s not a $100 million funding gap that way.

  6. Andrew;

    It probably is just a “hurry up” to the city, I agree. But do you really think an arena @ Enoch is a bad idea? As there is little parking at either Commonwealth or the Coliseum, Edmonton fans are already used to using Park n Ride or the LRT (which wouldn’t be possible, obviously, at Enoch).

    Erik: Good point. As mentioned here previously, excluding the multipurpose Staples centre and the new financial sinkhole in Newark (Devils), the most expensive NHL arena built is Pittsburgh’s Consol Energy Centre. It is generally accepted to be a shocking example of overkill (the club itself boasts about how it has banks of HD tvs on walls in hallways and the like, places where no-one stands), yet cost $321M in the construction boom days of 2008.

    And why would Mr. Katz need to spend about 40% more than that?

  7. John: Absolutely. And the Oilers don’t even need anything nearly as fancy as the Pens new palace.

    Here’s a list of NHL arenas built since 1990, their inflation-adjusted (which is key) cost in millions of dollars, and the year they opened:

    American Airlines Center: 521 / 2001
    Staples Center: 494 / 1999
    Prudential Center: 397 / 2007
    Verizon Center: 356 / 1997
    Bell Centre: 352 / 1996
    Air Canada Centre: 331 / 1999
    Consol Energy Center: 328 / 2010
    Wells Fargo Center: 294 / 1996
    United Center: 259 / 1994
    BankAtlantic Center: 249 / 1998
    HP Pavilion: 247 / 1993
    TD Garden: 231 / 1995
    Nationwide Arena: 223 / 2000
    Jobing.com Arena: 215 / 2003
    Rogers Arena: 212 / 1995
    Pepsi Center: 211 / 1999
    RBC Center: 208 / 1999
    Bridgestone Arena: 202 / 1996
    Scottrade Center: 200 / 1994
    St. Pete Times Forum: 195 / 1996
    Scotiabank Place: 195 / 1996
    Honda Center: 187 / 1993
    HSBC Arena: 178 / 1996
    Xcel Energy Center: 166 / 2000
    MTS Centre: 148 / 2004

    Again… Those are *inflation-adjusted* figures. Jobing.com Arena, for example cost $180 million to build when it opened, not $215 million. Unless someone is positing that wages and materials have exploded in price beyond inflation, these are pretty good numbers to go by.
    Needless to say, there is *ZERO* need for a $450 million facility in Edmonton (or even a $350 million one in Nassau County). Owners can still make plenty of money with a cheaper facility.

  8. Erik G: you are preaching to the choir. I had a discussion about the arena with a new co-worker today and that was one of the first things I said. Why not a $350M arena?

    John: I wouldn’t rule out an LRT to an Enoch arena. If you’ve seen LRT plans for the future (and all this is just a “plan” right now) the general plan is to get the train out to Lewis Estates from West Edmonton Mall. Extending the train another km or two (or 3/4 mile or mile for you Americans) might actually be cheaper than what the current plans call for the EPCOR/Planned Arena LRT station. The flip side is expanding the roadways out to Enoch will probably even things out…

    Having said this, you raise an interesting question. And my answer, I’ll admit here and now, is probably fairly hypocritical. While I don’t think an arena or stadium generates the economy to the equivalent of $100Ms at the expense of tax payers, it can do something if planned right. Putting the arena out in Enoch further spreads out this city and exasperates our urban sprawl. It’s one more place that will probably be easier to drive use alternatives. And while a downtown arena doesn’t solve our urban sprawl, it is a start.

    If Katz and company can only afford to spend $225M (their money + the ticket tax) for a $450M arena and expect the city to pony up the other half, how will the finances work in Enoch? They have $225M kicking around doing nothing that they can afford to sink it into an arena? Probably not. If Katz is serious about his threat it means finding a cheaper solution for his arena. If that’s the story – why not use this cheaper solution to speed up the downtown arena plans?

  9. Erik:

    I suppose the only answer is because he “thinks he can get it” from somebody else.

    Andrew & I have discussed in the past (at some length) the idiocy of modern sports arena construction. For example, if you want/need a new arena, there is no need to commission a special and unique building. Do what everyone else in the construction/commercial property business does and call the folks who built the Xcel centre in Minnesota. Tell them you want that arena with a different exterior (to make it “local” or “iconic” or reflect the shape of the face of the Mayor of the city that is paying for it, whatever). Only a small amount of the engineering would need to be changed to reflect differing ground, snow load and local regulatory conditions.

    And, with most of the engineering already done (and owned by the firm that designed it, not the people that paid for it), I’d be shocked if you couldn’t build the Xcel energy centre today for $225m or less. (yes, construction costs have gone up dramatically, btw).

    The only reason a business wouldn’t do that is if someone else will pay for whatever you want.

  10. Andrew:

    One of my good friends lives out on the west end (just east of the henday crossing that leads to Lewis Estates), so I do know what you mean about the LRT plan. That said, it may not happen for a decade – if extending that far happens at all, of course.

    I think we all know, at heart, where the money for the arena at Enoch nation would come from. The reasons I think it would be better are numerous, but I’ll limit it to three majors:

    First and foremost, an arena built by a private concern like Enoch nation and/or Rivercree would mean that each party has an incentive to maximize revenues and minimize cost of construction (something your councillors seem to have forgotten). It would be a business arrangement, albeit a construction project funded heavily by tax dollars. It seems unlikely to me that EN would be willing to hand over all arena proceeds to Katz, as the city seems prepared to do. They are business people and aren’t fools (in fact, it wouldn’t surprise me if they are better businessmen than Katz is). So, perhaps DK can put no money in, and share revenues with the building owner/operator. Or perhaps they do agree to give him all revenues, but build the facility in such a way that they will profit from it (IE: you can’t get to the seating bowl without walking through the casino itself, and the walkways all have tripwires attached to slot machine arms…)

    Either way, it isn’t the city agreeing to a sweetheart deal with a carpetbagger on his terms, on his schedule, and subject to his whim, under the perceived threat that the team might move, someday, someplace (to where? They make more money in Edm than they could anywhere other than Toronto, and Katz can’t get them there without paying MLSE more than he would have to to own the Leafs).

    Secondly, access – it is likely a wash for spectators, since the arena downtown will be harder for out of towners to get to, but easier for Edmontonians. One gains and one loses with a West End arena.

    The real benefit is for travelling shows… they don’t come in three cube vans. Most ‘arena’ touring acts have anywhere from 6-20 trucks hauling their gear. Hard to see how those get to Katz’ playground downtown without major infrastructure changes.

    Finally, it is as close to a ‘freebie’ for the city as you can get. The arena is still notionally in Edmonton, yet the city doesn’t pay for it and may actually receive tax revenues from it (depending on where/how it’s built and what the assessment rules are governing the location). The revenues that EN earn help them, and the city still earns some spinoff revenue from visitors coming to watch the team and shop.

    The city can also purchase the land that Katz has assembled downtown (assuming he wants to sell it) and do it’s own “iconic” project for less than the $250m they would spend on the arena. That project can earn them tax revenues, unlike much of the development that Katz proposes.

    BTW, I don’t think your answer was hypocritical at all. There are benefits to be had from “iconic” buildings and downtown core revitalizations. They are just a lot smaller than people seem to believe, and often take generations to fully appear (I suggest reading up on the history of the Empire state building for more info… it’s wonderful and iconic today, but people laughed at it for years after it was built, and a good part of it remained tenant-less for quite some time after it was finished).

    What Katz and his backers say about ‘iconic’ buildings isn’t a complete lie. It just isn’t the whole truth either.

    Thx.

  11. When an owner says the arena is going to cost $450 million and he’s putting up $200 million and asks that the city/province put up the rest ($250 million), this is what he’s really saying.

    You guys put up $250 towards an arena that will cost $250 million at best (one of my subsidiaries will be low tender at a reported $410 million but be instructed to build it for between $220 and $235 million), with me putting up the difference (that difference being $250 less 235 actual – $15 million I’ll pocket). I’ll look like a pretty swell fellow and be able to suck concessions from the city citing poor cash flow resulting from me having to service the debt on my investment of $150 – 160 million….

  12. enar: Bingo. It’ll probably be washed a little cleaner than that. The subsidiary building the arena will actually spend the entire 450M but will buy supplies like 15$ screws and 70$ hammers while contracting experts from other firms also tied into the Katz empire who will charge extortion prices and that’s the money that will flow back to Katz and his buddies.