Latest Edmonton plan to fill $100m Oilers arena gap: Just wing it, hope money turns up somewhere

The Edmonton city council is meeting today to discuss the Oilers‘ $601 million arena plan, which has had a $100 million budget hole for almost as long as there’s been an Oilers. And this time, the council appears to be ready to acknowledge that the province of Alberta isn’t going to bail them out with a surprise $100 million check, and instead is looking to “Plan Bs.” Such as, Edmonton Journal columnist David Staples?

To keep moving the project, [Edmonton Mayor Stephen] Mandel will resort to Plan B, pulling together some combination of infrastructure money, new taxes from the arena district development, and possibly an additional contribution from Katz.

Coun. Bryan Anderson says the city doesn’t need $100 million right now, it just needs to cobble together funds from various sources that will cover a $5.75 million annual loan payment. “There will be a plan proposed to produce the capital dollars that are missing.”

I can’t tell if Anderson actually means that the city isn’t going to worry about how to pay off $100 million, but will just worry about how to pay off $5.75 million this year, then figure things out all over again next year, or whether this is just awkward wording by Staples. But if that is what they’re considering, it’s really not likely to end well.

4 comments on “Latest Edmonton plan to fill $100m Oilers arena gap: Just wing it, hope money turns up somewhere

  1. You’re right on both counts; it’s awkward wording by Staples (he’s an awful, AWFUL writer) and it’s also a case of “just be cool and pay what we owe now and worry about trivialities like details later. When it’s way too late.”

  2. Perhaps Anderson needs a lesson about leverage. Not having a plan to 1. pay for something and 2. pay off the debt you’re incurring to buy something that you’ve resorted to debt to purchase because you have no plan is generally bad. (Can I match Staples’ awkward wording?)

    The Edmonton arena is becoming a legacy of a city council that knows they’re going to lose the upcoming election if they are forced to run on it.

  3. The city’s end is actually $115 million currently. And yeah, they’ve never had the funding in place. I remember in 2008 when the Mayor said that there would not be a dime of taxpayer money in any new arena, then in April 2011 when City Council voted to not proceed with any arena deal until they had all of the funding in place, then in October 2011 when they voted on a framework and swore up and down that the total cost wouldn’t exceed $450 million. So this new ‘plan’ is about as solid as all of their previous ones.
    Oh. and all of these cost numbers? None of them include the interest on money borrowed (4% blended per year, which is relevant given the City is borrowing all $601 million for construction, which means over $500 million in interest payments over 30 years, which there’s no plan or funding in place to cover). If you want some amusement, mention interest rates in relation to arena borrowing to anyone in City Administration and watch them scatter like mice when the lights get turned on.
    And best of all? The 28 days of usage that the city is permitted for their own building doesn’t permit for-profit events so Edmonton will never see a dime of direct revenue from a new arena (the $500k fixed property tax rate for the building will get eaten by the CRL/TIF)
    Between all of this and the extra money that’ll be provided to subsidize operating costs and, I don’t know if it’s the single worst arena deal in history, but in terms of exposing the public to risk, it’s got to be in the top 10 IMO.

  4. I’m interested to know how it is that the city still claims a “$100m” budget gap when the cost of the proposed arena has increased from $450m to $601m?

    Certainly Katz isn’t going to fill that gap… just like he didn’t buy the land he’d negotiated options to purchase (he had the city do it for him).

    So… if there was a $100m gap when the cost was alleged to be $450m, gee, I wonder what the gap is now?