New Edmonton Arena Construction will begin in March 2014

[sevenarms]

Well a positive out of this is the Flames have learned how not to handle their new arena situation. That said, I highly doubt the Flames would ever have acted in this farcical manner.

[DementedReality]

i guess now that an NHL owner is trying to get his hands in the tax payers pocket, everyone is understanding how the NHL works when it comes to negotiations. take, take and more take and you will like it.

[mykalberta]

? Katz would be a poor business person if he didnt try to get all he could. If he could get an arena for free without putting in any personal capital that would be an excellent business move for him.

Its called negotiating tactics.

[Isbrant]

Here is a link to the original deal or framework the City of Edmonton and Katz Group worked out in New York. I don't know if it has already been posted.

http://www.edmonton.ca/city_governme...framework.aspx

The latest cost estimate I saw was now 475 million, not 450 million.

Katz was putting in 100 million, approximately 5.5 per year for 35 years.
Facility Improvement Fee (ticket tax) 125 million
City of Edmonton $125 million
Short $125

These are just for the building. The City would also buy the land, pay for the community rink, pay half of a pedestrian bridge and all the related infrastructure.

With this last letter, did Katz just say he would come up with the missing $125 million (plus cost over runs) with the $250 million statement?

[nik-]

Originally Posted by DementedReality

i guess now that an NHL owner is trying to get his hands in the tax payers pocket, everyone is understanding how the NHL works when it comes to negotiations. take, take and more take and you will like it.

Oh god please shut up.

[The Yen Man]

Originally Posted by DementedReality

i guess now that an NHL owner is trying to get his hands in the tax payers pocket, everyone is understanding how the NHL works when it comes to negotiations. take, take and more take and you will like it.

Difference is, the NHL owner isn't paying taxpayers millions of dollars to chase a puck with a stick on a sheet of ice.

[Sylvanfan]

Well I know people at my office have been working pretty hard to get the bid package for the arena ready as the deadline for the bid is either today or tommorrow. Than next Thursday the General contractor is to who they select as the subcontractors with the best bid packages, and determine which one they want to go forward with.

Read, they're still trying to get a final price for the arena.

[Locke]

Oilers owner Daryl Katz said he will not meet with councillors in public to explain why they need millions of dollars more in public funding for the rink, and called on Mayor Stephen Mandel to show leadership.

"Mayor Mandel, this is an opportunity for Edmonton to be bold and forward-looking, and it warrants your support and leadership."

Katz, in the letter, also accused the politicians of trying to corner his NHL team into accepting a lopsided deal.
A cost-shared deal to build the rink was actually struck a year ago by the Oilers and the city.

But it came off the rails last month, when Katz said he had looked at the numbers again and needed more public money, including an extra $6 million a year from taxpayers, to offset the cost of running the building.

Councillors rejected the new demands and the two sides have been sniping at one another through the media ever since, prompting Mandel to set the Wednesday deadline.

University of Alberta sports economist Brad Humphreys urged fans to strip away the rhetoric.

"It's the way the game is played," said Humphreys, who has authored numerous reports on sports economics and has advised the U.S. Congress on the issue.

"In the bargaining procedure you try to get it however you can get it, and part of that is coming back and making requests like, 'Oh, by the way, I'm going to need $6 million (a year) in operating expenses."'

Under the original deal, city taxpayers and ticket buyers would pay to build the arena, which was initially pegged at $450 million. But with land, borrowing and surrounding infrastructure factored in the price is now at $700 million and rising.

The Oilers would keep all profits from NHL games, trade shows, concerts and other events for 11 months out of the year. The team would also keep naming rights for the building (worth up to $3 million a year), along with $2 million a year from the city for a decade for advertising.

Concession sales alone are pegged at $20 million a year.

In return, the Oilers would pay the city $5.5 million a year for 35 years and pay to operate and run the arena, pegged at $10 million a year.

Katz, however, said the franchise is bleeding money.

Along with the $6 million, the Oilers are also reportedly seeking tax breaks and a casino licence.

http://www.tsn.ca/nhl/story/?id=407513

Thats all I'll post as excerpts, but its a good article also referencing the shifting of dollars rather than the creation of new dollars, but I think with what you can read there you can fairly identify that Katz isnt negotiating truthfully and that hes basically asking the City to bend over and lube up.

[mikephoen]

Originally Posted by Isbrant

Here is a link to the original deal or framework the City of Edmonton and Katz Group worked out in New York.

Wait.... why did the City of Edmonton and a company based in Edmonton go to New York to work out a deal?

No wonder these idiots are so over budget on everything.

[old-fart]

So Katz pays $5.5M per year plus $10M per year to run it, but wants $6M per year from the taxpayer, $2M per year in advertising from the city, and $3M per year in naming rights (plus tax breaks and a casino licence).

That works out to the Oilers paying $4.5M per year to run the building (on expected operating costs of $10M), and keeping all the revenue from basically everything except for one month (I assume either June or July when he building is largely empty). Concessions alone is expected to make $20M, so the Oilers make $15.5M off nothing but concessions - add in all the tickets, parking, other advertising, etc.

The city on the other hand gets to pay $700M and up to build the thing, and will never, ever get it back.

Seems like a good deal to me....

[Locke]

Originally Posted by old-fart

So Katz pays $5.5M per year plus $10M per year to run it, but wants $6M per year from the taxpayer, $2M per year in advertising from the city, and $3M per year in naming rights (plus tax breaks and a casino licence).

That works out to the Oilers paying $4.5M per year to run the building (on expected operating costs of $10M), and keeping all the revenue from basically everything except for one month (I assume either June or July when he building is largely empty). Concessions alone is expected to make $20M, so the Oilers make $15.5M off nothing but concessions - add in all the tickets, parking, other advertising, etc.

The city on the other hand gets to pay $700M and up to build the thing, and will never, ever get it back.

Seems like a good deal to me....

Its a grim deal, but as ludicrous as his demands are, hes not asking the city to pay the whole $700M, just the majority of it with no real expectation of profit.

Reading the TSN article about the CRL (taxpayer fund) contribution being a shell game is really interesting.

[You Need a Thneed]

Edmonton City council has unanimously approved a motion to cease negotiations, and stop all city work related to the arena immediately.

[getbak]

[Robbob]

Originally Posted by You Need a Thneed

Edmonton City council has unanimously approved a motion to cease negotiations, and stop all city work related to the arena immediately.

Well that is a kick in the nuts

[seattleflamer]

Originally Posted by You Need a Thneed

Edmonton City council has unanimously approved a motion to cease negotiations, and stop all city work related to the arena immediately.

I'm not sure what the sentiment is amongst the good people of Chuckville. And I'm sure this is all show and to see who blinks first.

OTOH, do you really want to be the politician/city council who set in motion the Oilers' move out of town?

[Jordan!]

Make it Six!!!

[You Need a Thneed]

Originally Posted by seattleflamer

I'm not sure what the sentiment is amongst the good people of Chuckville. And I'm sure this is all show and to see who blinks first.

OTOH, do you really want to be the politician/city council who set in motion the Oilers' move out of town?

There's no way that the NHL allows the Oilers to leave Edmonton. Plus, with current economics, Katz would rather play in the existing Rexall Place than move anywhere else.

Anyway, I think Edmonton council is going to do some studying on whether it is feasible to build a new arena on their own, with involvement from Katz or the Oilers. Considering they were pretty much doing that with the other deal, I think they can. The only hiccup might be Katz not wanting to move the Oilers into the new arena.

[Robbob]

Why should the council even consider building a new arena without Katz's involvement. When he ready to be partners they can pursue building something because in the current build they can make ends meet. The fact that this has somehow blown to an estimated 700 million is ridiculous and raises a red flag. I think it is time to walk away because there is something wrong when the project costs balloons to almost double.

[PegCityFlamesFan]

Originally Posted by Bouw N Arrow

Make it Six!!!

That the season ticket holder campaign in Arizona?

[You Need a Thneed]

CTV Edmonton Article

The update falls a day after Daryl Katz sent a letter to Mayor Stephen Mandel – which was distributed to media outlets – publicly turning down an invitation for the Katz Group to bring their concerns over the downtown arena to councillors, and the people of Edmonton.
The letter said the owner of the Oilers was disappointed with recent communications with city officials on the project, and said a framework agreement dating back to October, 2011 needed to be changed, because costs were higher than expected.
Katz’s letter went on to say there are fifteen outstanding issues with the ongoing negotiations on the arena –and a proposal from the company would not be made until those issues are resolved.
“I think the public is very disappointed, and the public felt that we had a deal, and so did we,” Councillor Kim Krushell said. “Out of the blue, as we all know, the Katz Group came in and changed that deal.
“The feeling is, he’s never going to stop negotiating.”