Updated: January 23, 2013 12:13 PM | By Dean Bennett, The Canadian Press, thecanadianpress.com

Edmonton councillors vote on new arena deal



Edmonton councillors vote on new arena deal

Daryl Katz takes ownership of the Edmonton Oilers during a news conference at Rexall Arena in Edmonton on Wednesday July 2, 2008. THE CANADIAN PRESS/Jimmy Jeong

EDMONTON - The Edmonton Oilers brought out their star power Wednesday in a bid to get city councillors to resurrect a deal to build a new downtown rink for the NHL team.

Oiler stars Jordan Eberle, Taylor Hall, Shawn Horcoff, Ryan Smyth and Nick Schultz sat in the front row of chambers while councillors debated a cost-shared deal for the $480 million arena.

"I've seen the outlines of what the rink is going to look like and it looks great," Eberle told reporters during a break.

"Everyone involved with the organization loves playing here," he said.

"As far as having a new arena, it's just going to add to that (experience)."

Councillors were expected to vote Wednesday afternoon on the deal, which — with surrounding infrastructure added in — would put the final price tag at $601 million.

Edmonton taxpayers would pay $219 million toward the 18,559-seat facility. The Oilers' share would be $143 million. Another $125 million would come from a ticket tax that wouldn't exceed seven per cent of the total cost of a ducat.

Another $107 million is still being sought from the province, along with $7 million from the feds.

Construction on the rink would begin in August and the new facility would open in 2016.

Coun. Tony Caterina said the missing $107 million from the province is the elephant in the room.

Premier Alison Redford's government has been adamant in its refusal to promise any direct funding for an arena.

"That's sort of the big question mark here," said Caterina, who wondered if alternative funding solutions, like a lottery, would work.

"We tried a lottery once with Calgary (Flames) and Edmonton (Oilers) that was unsuccessful," said Caterina.

The new deal is a modification of an agreement that Oilers owner Daryl Katz and the city signed in October 2011. That deal, in which the arena cost was $450 million, fell apart last fall when Katz demanded an extra $6 million a year from taxpayers as a hedge against any losses.

City councillors labelled the extra $6 million a deal-breaker and voted to walk away on Oct. 17.

Two months later, Katz officials returned to council asking to renew talks and dropping the $6 million demand.

City council agreed to try one last time, leading to Wednesday's debate.

The deal would see the city build the arena and own it, but lease it to the Oilers.

The Oilers would, in turn, pay $6 million a year in lease payments and pay for the upkeep of the building.

Under the old deal, the Oilers were responsible for major upgrades and repairs. Under the new deal, that would be the city's responsibility.

In return, Katz would keep all the profits from tickets, concessions and parking for all events — Oilers or otherwise.

Katz would also receive $2 million a year from the city in return for advertising and would also keep naming rights for the building (estimated at $1 million to $3 million a year).

Katz was not in council chambers Wednesday but was represented by chief negotiator John Kavrellas.

City councillors were told that the Oilers would promise to stay in Edmonton for 35 years, and that NHL commissioner Gary Bettman was in the Alberta capital last Friday with a promise to put that guarantee in writing.

Two councillors questioned the deal, given that the Oilers have not opened up their books to the city.

Coun. Kerry Diotte said it's critical to know the Oilers revenue projections to determine if the city is making a good deal with the pharmacy billionaire because "we're going to give money to somebody who is quite wealthy."

City manager Simon Farbrother, the city's lead negotiator, said: "We've done as much due diligence as we possibly can."

The rink would replace Rexall Place, which was built in 1974 and sits in the city's industrial north end. It's one of the oldest facilities in the NHL.

Katz is currently a tenant of an arm's-length city board at Rexall, and says the Oilers need revenue streams from areas like concessions to be viable.

Katz has said he is losing millions of dollars a year, but city council has not been able to see the numbers to test that assertion.

The Oilers are ranked in the middle or higher among revenue-producing teams in the NHL.

A decision Wednesday would settle five years of haggling and bargaining that at one point last fall prompted Katz to woo officials in Seattle about relocating the team to the Pacific Northwest.

Katz quickly retracted that threat and apologized to Edmonton fans after he was vilified and excoriated on social media.

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