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Edmonton rejects Oiler [Arena] bid for more taxpayer dollars

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Old
12-11-2012, 12:23 PM
  #701
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Originally Posted by Melrose Munch View Post
My apologies, I mean public.
Because he sees the real money he will earn being from the property and development around the arena.

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12-11-2012, 01:46 PM
  #702
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Because he sees the real money he will earn being from the property and development around the arena.
And, that is the only way the city would agree to putting public money into the deal.

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12-11-2012, 01:51 PM
  #703
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How much will the city of Edmonton pay him to manage the arena? I hear 320 million is the going rate

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12-11-2012, 02:15 PM
  #704
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Originally Posted by objectiveposter View Post
How much will the city of Edmonton pay him to manage the arena? I hear 320 million is the going rate
I think $6M/yr for 20 years was bandied about earlier ($120M total).

I think Katz would have signed already for the Glendale rate.

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12-11-2012, 02:35 PM
  #705
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I think $6M/yr for 20 years was bandied about earlier ($120M total).

I think Katz would have signed already for the Glendale rate.
The reason the deal fell apart is that the city would NOT give Katz $6 million/year to manage the arena. In tomorrow's meeting, the Katz group need to be coming back with an offer that does not ask for that $6 million, otherwise they are wasting their time.

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12-11-2012, 03:53 PM
  #706
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Originally Posted by Ogopogo View Post
The reason the deal fell apart is that the city would NOT give Katz $6 million/year to manage the arena. In tomorrow's meeting, the Katz group need to be coming back with an offer that does not ask for that $6 million, otherwise they are wasting their time.
Yeah, there is some complications here that (IMHO) aren't coming out very clear. How much does Northland's get today for managing the non-Oiler's days at Rexall? I think it's estimated at $2.4M (Northlands ticket surcharge fee) + $2.4M for "support" fee. For all intents and purposes, the "support" fee is the AMF. The city has an agreement that after a certain amount of profit generated by Rexall that it will pay back some of the support fee. the last few years that has been under $400K, effectively, Northlands makes $2M on the support fee and $2.4M on the ticket surcharge. I personally think you could combine the two and call it an AMF of $4.4M for Northlands.

Now, the question becomes, has Northlands done a poor job and if the City were to pay Katz $6M to manage the new arena would that be fair or good for the city? Unfortunately, this is difficult to tell. I'm not sure how Katz performance of running the Hamilton arena has been to accurately judge if his group replaced Northland's would give us a better bang for the buck. From what I understand, Northland's has been pretty good about bringing acts to Edmonton and filling the arena with shows people want to see. But Katz also has the AEG behind him which could give him more pull for even more quality shows.

Of course, it feels like none of this has come out very well and Katz has done a terrible job selling himself for why he needs these fees and what benefit it would offer the city.

http://sirepub.edmonton.ca/sirepub/c...2024152346.PDF

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12-11-2012, 04:27 PM
  #707
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Originally Posted by Melrose Munch View Post
Why would Katz agree to a private arena.
It would be a good deal for Katz. He would have gotten the real estate development, naming rights for the arena, all revenues 11 months per year, $120 million in manangement fees and have to pay ~$5 million in annual rents. He could probably get the $5 million in naming rights alone.

I shudder to think what the old "Ghost of Maroon Road" would have thought about this.

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12-11-2012, 09:57 PM
  #708
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Is Katz that broke or something? Makes me laugh when "fans" call players greedy when you have owners like this.

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12-11-2012, 10:17 PM
  #709
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Originally Posted by Ewan McGregor View Post
Is Katz that broke or something? Makes me laugh when "fans" call players greedy when you have owners like this.
He reportedly pays himself 250 million per year.

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12-11-2012, 10:36 PM
  #710
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http://www.huffingtonpost.ca/2012/12...n_2274023.html

Quote:
EDMONTON - The owner of the Edmonton Oilers has asked to appear before city council on Wednesday.

Mayor Stephen Mandel says he's interested in what pharmacy billionaire Daryl Katz will have to say about the new arena he wants to build in downtown Edmonton with mostly taxpayer money.

Mandel also says if Katz or officials from his company, the Katz Group, wants to appear in front of council, he or the others will have to do it in public.

In October, city councillors voted unanimously to walk away from a deal to build the arena after the Katz Group asked for at least another $210 million from taxpayers to build the arena.

Negotiations have been ongoing for four years to build a new home to replace the 38-year-old Rexall Place.

The deal had called for taxpayers and ticket-buyers paying to build the $475-million arena and surrounding infrastructure for a total cost of $700 million and rising, while the Oilers, in turn, would pay a $5.5-million annual lease for 35 years and another $10 million or so a year to operate the building.

Katz would keep all profits from games, trade shows, concerts, and the like for 11 months of the year. He would also get naming rights for the building — worth about $3 million — and another $2 million in advertising from the city for 10 years.

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12-12-2012, 12:43 AM
  #711
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Give me 700 million so i can get a building complex for making money to me, while nice people of edmonton which 99.99% dont use the building pays it.

Seems like an great deal for the city.

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12-12-2012, 01:13 AM
  #712
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Originally Posted by LSnow View Post
Give me 700 million so i can get a building complex for making money to me, while nice people of edmonton which 99.99% dont use the building pays it.

Seems like an great deal for the city.


I dont know whats more absurd:

You're extreme oversimplification of the funding structure, or your assumption that a multipurpose entertainment district would attract 1000 people over its life time.

I did laugh though.

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12-12-2012, 01:39 AM
  #713
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How much is Katz looking for the taxpayers to foot the bill? % wise.

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12-12-2012, 02:01 AM
  #714
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How much is Katz looking for the taxpayers to foot the bill? % wise.
Not as much as the Edmonton media would have you believe.

Katz would finance a loan at $5.5M/yr for 35 years, with $30M of his $100M commitment invested before construction begins.

Most of the city's costs related to the arena is paid for via the "Community Revitalization Levy", which is a new future tax that is imposed on new businesses inside and surrounding the arena district. This is the primary method of the "public" funding the arena costs for construction as the funding is borrowed against future tax earnings.

The city and Katz will split the costs of infrastructure including the pedway and LRT connections. The city will own the arena and the land.

The city of Edmonton effectively pays $45M, which is directly repaid via the CRL and $80M that comes from "other sources".

Other sources include $25 million from new parking revenue, $35 million redirected from City support for Rexall Place and $20 million from other current arena area related expenditures that will be re-directed.

The deal breaker? It was when Katz, due to increased construction costs (This framework was agreed upon a year ago and had become stale) and the inability of Katz to secure the casino licenses, proposed that BOTH he and the city SPLIT the $10M each increase in funding per year required to finance the additional costs. "Somebody" who was in the closed-door meetings with Katz and the City when he proposed this solution, leaked this information claiming that Katz was holding the city "hostage" with new demands thus leading to the derailment and the city walking away from this sweetheart of a deal.

It's quite sad really. There is literal talk now of the City themselves building a single-purpose arena and renting it out to the Oilers. Which does nothing to increase the sustainability of the Oilers in Edmonton because if they ever want to compete with rising salary costs and the New NHL Economics, ownership will have to generate alternative revenues from non-NHL sources as Edmonton is just too small of a market to be sustained long term.

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12-12-2012, 01:34 PM
  #715
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Originally Posted by LSnow View Post
Give me 700 million so i can get a building complex for making money to me, while nice people of edmonton which 99.99% dont use the building pays it.

Seems like an great deal for the city.
Clearly you have no clue what is going on in Edmonton regarding the arena.

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12-12-2012, 04:32 PM
  #716
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Edmonton City Council votes in favour of re-entering negotiations with The Katz Group.

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Edmonton Oilers ‏@EdmontonOilers
Council votes in favour of re-opening negotiations with the Katz Group with regards to the Downtown Arena Project #yegarena

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12-12-2012, 05:10 PM
  #717
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Edmonton City Council votes in favour of re-entering negotiations with The Katz Group.
That's unfortunate. Here's to Katz bending this city over again.

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12-12-2012, 05:33 PM
  #718
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Is there anyway the city could just have a referendum?
American Cities do this all the time, any procedure for it to be done here?

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12-12-2012, 06:03 PM
  #719
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Originally Posted by NewOilRising View Post
That's unfortunate. Here's to Katz bending this city over again.
come on. he owns a particular business that we want to operate in our city REALLY, REALLY, REALLY, REALLY badly. that is why he can leverage monies out of us. he owns the cherished business in the province. it is a cultural icon. get over this 'not one cent to a business' dogma.

we want him, he needs us. get it done. for the cost of a case a beer per year per person we can have an NHL team in Edmonton and a spectacular facility. is that too much for you? not for me.

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12-12-2012, 06:24 PM
  #720
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come on. he owns a particular business that we want to operate in our city REALLY, REALLY, REALLY, REALLY badly. that is why he can leverage monies out of us. he owns the cherished business in the province. it is a cultural icon. get over this 'not one cent to a business' dogma.

we want him, he needs us. get it done. for the cost of a case a beer per year per person we can have an NHL team in Edmonton and a spectacular facility. is that too much for you? not for me.
You don't really get the point. The point is why should the city be giving him hundreds of millions of dollars for something that:

1) will not benefit the city in any way
2) will not improve the the local economy in any way

He doesn't need the city, he just simply wants to be given hundreds of millions of dollars so that he can start making more money while not providing any benefit to the city or the public.

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12-12-2012, 06:43 PM
  #721
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Originally Posted by Fish on The Sand View Post
You don't really get the point. The point is why should the city be giving him hundreds of millions of dollars for something that:

1) will not benefit the city in any way
Incorrect. Leaving Rexall as it currently stands is not benefiting the city in anyway. Status quo FTW.

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Originally Posted by Fish on The Sand View Post
2) will not improve the the local economy in any way
Debateable again. Reducing urban sprawl will have further, *better*, long term pro's for the city then if the Arena were to be built out by Morinville (essentially Winnipeg vs. Ottawa). IMHO, by producing a higher-end downtown core and then redeveloping the city outwards will do far better for the city then to just give up and let things be the way the are today (the current Edmontonian attitude it seems) and forever expand outwards.

If this means the city doesn't want to accept the money from a rich guy to help them achieve this goal, then so be it; have the city do it themselves. Even though Katz will probably make out like a bandit, Edmonton is too dysfunctional for this problem to be solved on its own and Katz is able to take advantage of that. If Edmonton was smart they would have built a new arena in the early to mid 2000's on their own when they had a ton of leverage against the EIG. Oh well, missed that boat because of short-sighted waffling like we're seeing today.

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Originally Posted by Fish on The Sand View Post
He doesn't need the city, he just simply wants to be given hundreds of millions of dollars so that he can start making more money while not providing any benefit to the city or the public.
A new public facility with better amenities is a benefit to the city and public. Shifting more of the local economy to an area of the city where development can affect a greater number of people is a benefit to the public. Under the last proposal the city of Edmonton have several weeks where it is able to do whatever it wants with the building as well; CFR, public skating, giant *****-house, whatever it wants. And they are going along with it in the name of the publics benefit. I don't know of another arena that would have that clause in it's contract.

Edmonton is a city with revenues in the billions. It routinely "throws" tens to hundreds of millions of dollars away on projects that do not benefit me in anyway. This project is no different than several of the other projects planned for the future except that the shortsightedness of Edmontonians come out to play when it involves hockey.

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12-12-2012, 07:28 PM
  #722
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Really hope Edmonton doesnt give the Oilers a dime.

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12-12-2012, 09:48 PM
  #723
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Really hope Edmonton doesnt give the Oilers a dime.
There are people in this city who would rather see the City BUY the Oilers and support them using taxpayer dollars then see Katz strike a fair deal for an equal footing in a large deal that benefits everyone.

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12-12-2012, 10:02 PM
  #724
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Incorrect. Leaving Rexall as it currently stands is not benefiting the city in anyway. Status quo FTW.
Sure it is. The city doesn't lose over 700 million by leaving it the way it is.



Quote:
Debateable again. Reducing urban sprawl will have further, *better*, long term pro's for the city then if the Arena were to be built out by Morinville (essentially Winnipeg vs. Ottawa). IMHO, by producing a higher-end downtown core and then redeveloping the city outwards will do far better for the city then to just give up and let things be the way the are today (the current Edmontonian attitude it seems) and forever expand outwards.
This arena is hardly part of some master plan to contract the city to cover a smaller area. That argument is little more than a red herring.

Quote:
If this means the city doesn't want to accept the money from a rich guy to help them achieve this goal, then so be it; have the city do it themselves. Even though Katz will probably make out like a bandit, Edmonton is too dysfunctional for this problem to be solved on its own and Katz is able to take advantage of that. If Edmonton was smart they would have built a new arena in the early to mid 2000's on their own when they had a ton of leverage against the EIG. Oh well, missed that boat because of short-sighted waffling like we're seeing today.
Katz doesn't actually want to pay anything. He's going to keep asking for more and more until he doesn't actually have to pay anything, or something really small.


Quote:
A new public facility with better amenities is a benefit to the city and public. Shifting more of the local economy to an area of the city where development can affect a greater number of people is a benefit to the public. Under the last proposal the city of Edmonton have several weeks where it is able to do whatever it wants with the building as well; CFR, public skating, giant *****-house, whatever it wants. And they are going along with it in the name of the publics benefit. I don't know of another arena that would have that clause in it's contract.
several weeks? That's nothing. Anybody with half a brain knows where the profits of this arena will go and that is right into Katz's pockets. Shifting the economy from location A to location B is simply robbing Peter to pay Paul. Its shortsighted. The city will end up millions in the hole, the city will see a huge economic void in the area where the team left, and Katz will be the only one to reap profits.

Edmonton is a city with revenues in the billions. It routinely "throws" tens to hundreds of millions of dollars away on projects that do not benefit me in anyway. This project is no different than several of the other projects planned for the future except that the shortsightedness of Edmontonians come out to play when it involves hockey.[/QUOTE]

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Old
12-12-2012, 10:29 PM
  #725
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come on. he owns a particular business that we want to operate in our city REALLY, REALLY, REALLY, REALLY badly. that is why he can leverage monies out of us. he owns the cherished business in the province. it is a cultural icon. get over this 'not one cent to a business' dogma.

we want him, he needs us. get it done. for the cost of a case a beer per year per person we can have an NHL team in Edmonton and a spectacular facility. is that too much for you? not for me.
What percentage of Edmonton residents attend Oiler games?

Why don't they just jack up the ticket prices on, you know, the hockey fans who go to the game?

Why should someone who doesn't like hockey pay tax dollars to a billionaire so Joe Six Pack oiler can get a price break?

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