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Jan 30, 2013 12:10am
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at Arizona. EDMONTON —The deal to build a new arena for the Edmonton Oilers
collapsed Wednesday, with city councillors pointing the finger of blame at
Oilers owner Daryl Katz and his last-minute demands for millions more in
taxpayers money. Stephen Mandel said it was time to send a message. “Its wrong
to hold us up for ransom,” said Mandel. “This is not a council that said, Dont
do a deal—but what do we do when we have a partner that says, We want more
money, and you pay for it?” he said. “Im not saying we should say no to Mr.
Katz, but all the information that Ive had an opportunity to see does not
justify council giving him another six million dollars a year.” Mandel made the
comments after councillors voted unanimously to walk away from the deal agreed
to last year with Katz to build the $475-million arena, starting in 2013. Katz
was not in council chambers when the decision was reached. He has been asked
twice in recent weeks to meet with council in public to resolve the negotiating
logjam but has refused, saying the two sides are so far apart theres no reason
to meet. The original deal had taxpayers and ticket-buyers building the rink
with the Oilers spending about $15 million a year in lease payments and
operating costs and keeping almost all the profits. It went off the rails a
month ago when Katz said hed had a second look at the numbers and needed
millions more, including a $6 million a year in operating subsidies for the
arena. Mandel said he cant judge the merits of the demand because the Oilers
have not made their case. “I dont know what else we do. Im not sure where we
go,” said Mandel. “Someone has to be willing to at least put information forward
to justify their case. “We need to send a message (to Katz) that you got a fair
deal and stand up to that fair deal or show us why it isnt a fair deal,” said
Mandel. “And I can tell you he has not shown us.” Katz officials were not
immediately available for comment. Earlier Wednesday, councillor Kerry Diotte
said its “shameful” to debate handing over money without any information from
Katz. “How can we even consider giving any tax money to a billionaire team owner
when we havent seen detailed financials. Thats just not fair,” Diotte said to
city manager Simon Farbrother. Farbrother said no NHL teams divulge their
financial information. Not so, said Diotte. “In Scottsdale (Arizona), when the
Phoenix Coyotes first went there, they tried to sell (the city) on doing a deal
without the financials and they told them to get lost. I suggest we do the same
thinng. Ray Rice Super BowlJersey. ” Farbrother said
the two sides have agreed to disagree on the $6 million subsidy, and that in his
analysis Katz will “clearly make sufficient revenue to cover any obligations
that come with operating the arena.” But Farbrother said the two sides have dug
in on the issue and theres no movement in sight. “Will we have an agreement in
the next two to four weeks?” asked Coun. Dave Loken. “In the absence of
significant movement on the ($6 million) operating subsidy (by either side) we
dont think you will have an agreement,” said Farbrother. “Is there any chance
there (will be) significant movement on the Katz side of the table?” Loken
asked. “I dont believe weve been given any confidence in that, no,” said
Farbrother. Under the original deal, city taxpayers and ticket buyers would pay
to build the arena, which, with land, borrowing costs and surrounding
infrastructure factored in, is now effectively 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, estimated at $10 million a year.
The Oilers are worth about $212 million, good for middle of the pack in the NHL,
and the team regularly sells out Rexall Place. But Katz, who bought the team in
2008, has said the franchise is losing money. He also said the city can afford
his new demands because the arena will spur retail, office, and residential
buildings around it that will bring in an estimated $2 billion more in tax
revenues over 20 years. However councillors were told by Farbrother that the
arena will actually bring in about a quarter of that figure, $584 million, and
that almost all of that money would be needed to pay off construction of the
rink. The negotiations have turned acrimonious in recent weeks, with both Katz
officials and councillors publicly accusing each other of bad-faith bargaining.
Three weeks ago, Katz threatened to move the team to Seattle if the arena did
not get built. He later apologized in newspaper ads after angry fans vented
outrage on social media sites. But Katz has not publicly ruled out moving the
team as a last resort. The Oilers are playing at 38-year-old Rexall Place, one
of the oldest faci