: News Article:
New Arena deal agreed to by city and Katz group:mod warning #616
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05-14-2013, 07:41 AM
Join Date: Apr 2005
Originally Posted by
A lot of other factors contributed to Ottawa and Vancouver's owners having to sell. The loans for Scotiabank were called in because Enron croaked and they didn't have the capital to pay them right out. Vancouver had overruns on the arena, lost revenue on the 94 lockout and paying the expansion fee for the Grizzlies might have tipped the pot. Building a rink was not
reason for the bankruptcies and shouldn't scare off people wanting to build arena's privately.
Building the arena is exactly what this city needs, but I don't agree with the financing. The way I see it, Katz can pay for the arena and the city can pay for the infrastructure. I'm not Katz, but I would like to think if I was in his position I would try and get the financing privately to build this arena for my hometown.
I understand owning a NHL franchise is not some hand over fist money generating machine and he has already helped Edmonton out by buying the Oilers. However, end of the day if this arena gets built that value and asking price for the Oilers increases to Katz benefit.
You could go into a lot more detail I'm sure but you captured the argument. Some confusion abounds around events, results, and retrospection which leads to fictions commonly being created around this issue.
For instance the notion that funding arena's causes its owners to go broke. While people may or may not be invoking causality in that interaction they most clearly are arguing on that behalf as if its something an owner should steadfastly avoid lest they succumb to going broke on the basis of partially funding an arena.
Heres an instance where the pro arena at any cost side is clearly utilizing fear mongering as a means to try to sway favorable opinion on any nature of deal.
Katz will not go broke on the basis of contributing an extra 50-100M on an arena. An owner with multibillion in assets that has recently leveraged a subtantial amount of that into liquid assets through sales is arguably in a position to not only fund an arena, but do so without loan (not recommending this as a course of action, just saying)
Nobody at this point is looking at a massive change in relative contribution. But for Katz to go 50/50 with the city to make up any outstanding amount that is owing is feasible, and lets make it clear, Katz could easily enough do that if he wished.
Aside from what the Katz team itself may say through vested interest about "losing money on the Oilers" (theres no independent substantiation of this and none provided even though the city has asked several times) its quite clear that this becomes a matter of how much, or if, Katz wants this development to continue.
The request for a 6M/yr subsidy in an already one sided deal gave indication not too long ago that Katz was not bargaining in good faith.
It is curious why it falls on the city to fund and front each extra means as shortfalls come up. I could add shortfalls that are now increasingly politically unpalatable to fund due to specific actions Katz and his team have taken, which have been recently outlined on this thread.
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