[VERVE]

Originally Posted by EddyBeers

I would suspect when it is all said and done that Katz is looking for about a 750 million dollar package from the City of Edmonton and the province of Alberta. Katz is willing to run the arena for free and collect the profits from the arena. The Oilers would play rent free under Katz's proposal and at the end of the day Katz would spend around zero dollars on the arena (the original proposal was for Katz to pay 5.5 million to rent the arena for 35 years and keep all the profits, with the City of Edmonton giving him 20 million for "advertising", but Katz came back and said that he needed 6 million from the city to pay for running the arena, so at the end of the day he appears to need 500K a year from the City to run the arena). Thankfully, he has taken that ridiculous request off the table, and agrees that he should be required to pay the equivalent of 1% of the value of the building in rent per year.

I would be shocked, absolutely floored, if the Flames do not ask for money from the City and the Province for their new sports facilities. Then the Flames will be in the same dog and pony show that Katz is conducting up in Edmonton.

According to the original ‘agreement’ discussed almost a year ago, the Oilers must pay operating and maintenance costs of the new arena estimated to be over 10 million dollars per year. The Oilers will receive all concerts and other non-hockey related revenues 11 months of the year. Not including keeping the sales of parking fees, the Oilers will also receive food and beverage sales which may bring in 20 million. Katz will not pay the 100 million money upfront (as once thought) to build the arena but will pay 5.5 million per year for 35 years (the total mortgage plus low interest will then be about 200 million). Perhaps there is a lesser rental fee incorporated within the 5.5 million payments-not clear. The City will pay 2 million per year for advertizing in the arena (for a decade). The Katz group tried to make a lot of concessions behind closed doors but the final straw was when they insisted on an extra subsidy from the City at around 6 million. This essentially covers their 5.5 million loan payment. Katz reasoning is that the city will benefit much more in tax dollars from surrounding businesses called the CRL (community revitalization levy) than what the City had projected. In a recent meeting, the Katz group has withdrew this 6 million subsidy and hopes that if the taxes received by the city is above their initial projection, then any extras might be put into a reserve fund to help offset any costs incurred by the Katz group.

The proposed 2 billion dollars worth of arena/business/entertainment district will feature hotels, condos, office towers, casino, Wintergarden pedway across 104 ave., restaurants and shops all situated in the heart of downtown. The city hopes the arena district will help revitalize downtown and slow urban sprawl which the city has had very little success developing in the past.

The Katz group also insisted to have the City as their main tenants in the yet to be build high-rise offices around the arena. This might be an impossible scenario since all government-related functions or events for ex. tenancy/leasing must be put out for tender. As well, the Katz group wanted a share of the Casino profits but this is a provincial jurisdiction and not a municipal affair.

Katz had spent over 30 million so far on preliminaries such as land purchase but may consider this cost as part of his initial 100 million contributions towards the new arena.

Hopefully, in the end, it results in a win-win situation for both the City and the Katz.