Edmonton declares Oilers arena deal “100%” done, still not actually 100% done

The NBA owners’ vote to reject the relocation of the Sacramento Kings wasn’t the only big arena-related decision yesterday: The Edmonton city council also voted to approve a new funding plan for the long-in-the-works Oilers arena. The council voted 10-3 to commit a series of different public funding sources to a now-$604-million arena, with Mayor Stephen Mandel declaring triumphantly, “This is actually 100 per cent.”

Of course, Mandel has said that before, but this time he apparently means it. So, how did the city finally fill that pesky $100 million arena funding hole? Let’s refresh ourselves on where the arena plan stood back in January:

That’s $676 million, but the old arena cost estimate was $601 million, not counting the $75 million in land costs, so it all adds up. Except for the part where $114 million was unaccounted for.

And the new plan:

  • $279 million from the CRL, parking fees, and the like.
  • $125 million from the ticket surcharge.
  • $184.4 million from Katz, including an extra $15 million that the owner agreed to kick in yesterday.
  • $25 million from the provincial Regional Collaboration Program.
  • $7 million from the province of Alberta.
  • $7 million from the federal government.

That adds up to … $627.4 million. So it’s actually still $50 million short of where things were in January. Maybe the city is no longer counting its land costs as part of the deal? It’s hard to tell from the documents released by the city, and press coverage that includes offenses to math like “$23.69 million in third party funding ($25 million from the provincial Regional Collaboration Program, and $7 million each from the province and the federal government)” isn’t likely to help much either.

Basically what appears to have happened yesterday: Katz agreed to kick in some extra cash; the city gave up on raiding its Municipality Sustainability Initiative fund and is instead just assuming the CRL will raise more money; and the remaining gaps were filled in by flat-out assuming the cash will come from the provincial and federal governments.

That’s a whole lot of assumptions, and pretty much still amounts to “we’ll borrow the money and figure out how to pay for it later” — in particular, just flat-out upping the projected revenues from the CRL increases the odds that new revenues will fall short, and end up eating the lunch of the general fund, as Greg LeRoy of Good Jobs First memorably put it. Plus the RCP money still isn’t approved, and lord knows where those $7 million contributions from the province and feds are supposed to come from.

Still, Mandel and the council say it’s a done deal, so it looks pretty likely that this is a done deal, and any shortfalls will be worked out later. (Because that always works out.) Which means that Edmonton taxpayers are now going to be on the hook for more than half of the cost of a new arena for the 7th-most-profitable team in the NHL, owned by Canada’s 11th richest man. It’s still not the worst arena deal in history, but that doesn’t make it a good one.


5 comments on “Edmonton declares Oilers arena deal “100%” done, still not actually 100% done

  1. The mayor came out swinging today to defend the deal (http://globalnews.ca/news/567741/mayor-mandel-blasts-councillor-diotte/). Clearly, you can’t love your city and also oppose corporate subsidies…

  2. Is ‘hating Edmonton’ better or worse than ‘hating freedumb’?

    Everytime Mandel opens his dishonest yap, I am reminded of how limited his support was for this project in the beginning. Then, after a meeting with Mr. Katz, suddenly he was it’s biggest cheerleader.

    Talk amongst yourselves….

  3. John.
    Hell, I remember far enough back to the start of this deal when Mandel pledged that no Public dollars would ever be used for an new arena for the Oilers… And when it wasn’t going to ever cost more than $450million… and when it wouldn’t proceed without direct provincial financial involvement… and so it goes.
    I’d like a new arena for the Oilers, but this deal stinks. And to think, it’s actually gotten worse over time with every revision in regards to the Public’s end. Now I just need to spend some quality time with the supplements to the Master Agreement to see if there are any truly idiotic clauses like a “State of the Art” one.

  4. The only blessing in knowing this thing is done, besides the fact that it’s not a complete God awful deal, is that maybe this seemingly endless debate will finally end.

    Not a dig at FoS but at the stream of diatribe about this deal and it’s naysayers that dominates this city.

    Done. Let’s see what happens to this downtown in the next five years and string up those responsible if this thing is as big of a boondoggle as I imagine it might yet be.

    I’ll be the first to admit if it ends up being such a great thing.

    Now all the Mayor has to do is annex more land that drives the sprawl of this city further.

    Done!

    http://www.edmonton.ca/city_government/urban_planning_and_design/proposed-annexation-lands-south-edmonton.aspx

  5. Just watched that globalnews video. Holy crap. It’s just a few hours after a supposed victory on a major issue and the dude gives one of the whiniest performances I’ve ever seen by a politician. Maybe he was running on too little sleep or he’s just not a “morning person”, but, damn, that was embarrassing.

    Couldn’t help but think that his primary frustration is that too many people understand what a bad idea deals like this are. And maybe a certain amount of frustration with getting stuck with being the “pro-corporate welfare” candidate in the next election.