Time short to reach arena deal: councillor
Next council likely to be less supportive, Anderson says
Oilers owner Daryl Katz probably has until March to reach an arena deal with the city before it becomes a “full-blown election issue,” Coun. Bryan Anderson warns.
He thinks the council chosen next October could have fewer backers for the project than the current group, and a majority might even oppose it.
“If anybody on that (Katz) side of the table is waiting for a new mayor or new council, they’re probably sadly mistaken,” Anderson said Thursday, explaining votes have generally been 10-3 in favour of proceeding.
“I think this is the most sympathetic mayor and sympathetic council that an NHL team could have … I’m not sure you’re going to get that kind of support on a new council.”
Councillors are scheduled to have their first update on the arena Wednesday since they voted unanimously to end negotiations with Katz in October.
They were outraged the team wanted better terms, including a $6-million annual subsidy, than were provided in a framework agreement reached in 2011.
The verbal update will outline options for proceeding, rather than any breakthrough, Anderson said.
“I would hope that there’s still time for something to happen before this becomes a full-blown election issue, probably no later than March,” he said, explaining this will require a “major course change” from Katz.
“Am I terribly hopeful that’s going to occur? Probably not, but I am hopeful … I think he believed he was going to get compliance from us all along. I think our last motion indicated how far we want to go.”
Mayor Stephen Mandel said he also hopes a deal can be reached, but isn’t optimistic.
The big hurdle is that Katz still hasn’t provided the clear financial information requested by the city showing why he needs more money from the agreement, Mandel said.
“That’s up to Katz to pick what would be the best time for all of us and come back to city council with something that would spur citizens of Edmonton getting back behind this deal,” he said.
“There’s nothing we have heard that would indicate the deal that’s on the table is being pursued. They have always said they would accept the deal if we would do something else. Well, we’re not going to do something else.”
There has been “indirect communication” between the two sides since negotiations were stopped, but no formal talks, Mandel said.
A Katz Group spokesman declined to comment on the issue.
In October, Katz argued in a public letter after the tentative agreement was reached that his team did further studies and determined costs would be higher than expected and the revenue lower.
Out of 15 outstanding issues, city officials have identified three as critical — the operating subsidy, a proposal to have the city become the anchor tenant in a new Katz office tower, and how to divide $50 million in extra expenses.
Those include estimates that the price of building the arena has risen to $475 million from the $450-million maximum, and that the Winter Garden pedestrian crossing over 104th Avenue would cost $80 million, not the $50 million initially proposed.
There are some savings on land.
Under the 2011 tentative agreement, the arena would be funded with $125 million coming from city sources, $125 million from a ticket tax and $100 million plus interest covered by annual payments from Katz.
He would keep all the revenue from the city-owned facility and cover all long-term maintenance and operating costs.
The two sides hope the province will provide the final $100 million, although Premier Alison Redford has repeatedly said the government won’t put money into the project.
Several councillors have suggested Edmonton, which has spent $15 million on design, look at building the arena alone and leasing it to the Oilers.
It would also give the city more chances to reduce construction costs, he said.