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Originally Posted by oilers_fan
Well he started off by inflating the cost of this thing by nearly double. Not sure where he got 800 million dollars from. If he's giving perspective, at least get the numbers in the correct ballpark.
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Do you think that the now 487 million dollar projected price tag (up almost 10 percent in one year) is going to be the final price tag? Do you think that they will not need to provide infrastructure improvements to the downtown core for the arena? Right now Katz is putting absolutely nothing into this thing, zero dollars, he is getting a mortgage from the taxpayer and paying that mortgage off at a projected 5.5 million dollars over 35 years. He then gets to use the arena for free and pay zero dollars in rent on the project. But he gets to keep all the profits.
Somehow the 478 million dollar price tag does not include the estimated 25 million dollar cost to acquire the land for the arena. If we assume that you cannot have an arena without land, and we know that the City paid for that land, then the costs for this 478 million dollar arena are at 503 million dollars.
Of course the costs of the arena and the land do not include the infrastructure costs that will be incurred by the taxpayer for the arena. Unless you think that the existing infrastructure in that part of the city can handle the increased traffic that will come from this new arena (I find that almost impossible to believe). A conservative estimate on the infrastructure costs would be 250 million dollars (given that one interchange at South Edmonton Common cost 261 million dollars). That gets you up to 753 million dollars. If you assume that there will be a further 10 percent cost over run on the project, the entire thing will cost about 800 million dollars.
Katz is contributing absolutely nothing, zero dollars up front for a 800 million dollar project. For that contribution, he gets 20 million dollars in the first 10 years from the City of Edmonton for advertising (presumably because he is may change the name to the North Alberta Oilers and the City would lose out on the "free" advertising that being called the Edmonton Oilers provides). Of course, even the mortgage is a hidden subsidy for Katz, as the government will be able to borrow money at at least 4% lower than private lending rates, so right there he is getting an additional 4 million dollar a year subsidy from the government. Eventually even governments lose their ability to borrow money at lower rates and lose their AAA rating potentially. Borrowing the 100 million that Katz is "supposedly" putting in under the government may restrict the government's ability in the future to borrow for other projects.
800 million is not an astronomically high number to project the entire cost of the project, but if you want we can just go with the arena costs and agree that Katz wants the taxpayer to fund 100% of the costs of a now 503 million dollar arena.