When last we checked in on the Edmonton Oilers arena situation, the city council had just given a firm middle finger to team owner Daryl Katz, calling a halt to negotiations because Katz was refusing even to say how much public money he was asking for, or for what. Ccouncillor Kerry Diotte all but slammed the door in Katz’s face, asking, “How can we even consider giving any tax money to a billionaire team owner when we haven’t seen detailed financials?” and saying the city should tell Katz to “get lost.” Oh, and on top of this Katz was in hot water for possibly illegal campaign donations to local government officials.
But you know what they say about time healing all wounds, and yesterday the council voted to resume talks with Katz. Why?
The motion — which was opposed by councillors Linda Sloan and Kerry Diotte — came after Katz Group executive vice-president John Karvellas told councillors he wants them to authorize administration to restart negotiations.
“We do not want the downtown arena project to die,” he said.
Oh, well in that case.
Katz did make one concession yesterday, withdrawing his last-minute demand for $6 million a year in operating subsidies that helped spark the tiff with the council, though no word on all the other goodies he was trying to lard up his demands with. Plus he’s now asking for a new city-subsidized fund to “maintain, repair improve and enhance the arena and its operations,” according to the CBC.
The two sides now get to hire a mediator who will in turn hire a financial analyst to examine the economic costs of the project — it’s going to be fun seeing who they can agree on, given the massive rift between the kind of economic-impact-report-for-hire shills that often take on these jobs and the actual economists who generally come to less flattering conclusions. Plus they get a new deadline — April 30 now — to replace the old October 17 one, because what fun is a drop-dead date if you have to go and drop dead after it? How long can this go on? Forever and ever and…
Neil, I’m putting your name in the hat so be prepared for a call from Mayor Mandel in the new year.
What happens to the rosy revenue projections for the city when the NHL is either locked out or on strike? Will Katz & the Oilers provide any assurances to the taxpayers that will be funding his arena that there won’t be any future lockouts?
Considering the NHL’s recent history it would be stupid for any locality to not have some kind of “lockout clause” in new arena contracts, insuring payments regardless of whether the team is playing or not. But given their unwillingness to negotiate with the best interests of the public in mind, it’s hard to imagine them not acting stupidly.
The Oilers are among the top 8 grossing clubs in the league. That puts them in elite company (and, obviously, makes them one of the 10-12 clubs that actually turns a profit with some regularity).
And yet… here we have another owner crying poverty. They say they ‘aren’t sure’ NHL hockey can survive in Edmonton.
Isn’t that an odd thing to say 5 years after buying a business valued at $155m by Forbes (and paying $200m)? If you are any kind of businessman, shouldn’t you be sure about the economics of NHL hockey (or drug stores, or bowling alleys or used car lots or…) before you buy that particular business?
While Edmonton is one of the strong markets that supports weaker sisters in the league at present, the city would be absolutely negligent to make any agreement with KG while the league has locked out it’s employees and is generating no revenue whatsoever.
Given how things have gone, I’d have been inclined to restart negotiations only when the league is actually operating again, and start with a blank slate, not from the highly suspect agreement in principle the city reached with KG in 2011. After all, they’ve already reneged on that agreement once… how about we go back to the “original” original? Where Katz put in $200m to the development and paid all operating expenses and upkeep? Start with that, then when he agrees to cover any CRL shortfall (which is what Mr. Hansen has effectively done in Seattle), well, by god, we may have ourselves a deal…
Excellent points.
I agree with Matt that the argument teams make that they are “economic engines” for downtown cores rings a bit hollow when there is yet again, another lockout halting this freight train of economic activity. Even better, Edmonton is doing just fine economically without the Oilers (minus a few hockey related businesses).
I also concur that, especially now during this lockout, the city should make a push for lockout insurance. A 30-year lease could also be considered a 360-month lease. Any month, partial or whole, that is lost to a strike/lockout has to be made up with 2 months at the end of the lease. Right now, we have a four month lockout which would add another 8 months to this lease at the end if we . Assuming a season is cancelled and things aren’t wrapped up till July that is an additional 22-month to this lease.
And I obviously love JBs hard-balling ways. Get this back to the original plan and don’t budge on the $100M upfront. No payment options. That will keep Katz tied to this project: it’s not something he can suddenly walk away from.
And Neil,
What is to “Diotte’s credit”?
Pfft, stray text from an earlier version got left in at the end. Nothing to see, move along…