A look at five other arena deals and how they might relate to Edmonton’s proposed rink
“Let’s be frank, the only privately funded NHL arena (in Canada) that hasn’t been a financial disaster is ACC (Air Canada Centre) in Toronto, where they have the Leafs and an NBA franchise. Everyone else lost their shirts. They lost their buildings and their teams.”
Daryl Katz, Sept. 17, 2012
“I think we’re a long way apart. Right now, I don’t know how far apart we are. What is it? What do you want? We have been dealing with this for four years.”
Mayor Stephen Mandel, Sept. 24, 2012
What does Daryl Katz really want, really need, to complete a deal to build a downtown arena?
That’s the question on many minds these days, the one that has echoed around City Hall for almost a month, ever since a closed-door meeting in September where city councillors rejected requests from the Oilers’ owner for new public dollars.
Those requests included tax breaks, along with casino money or a $6-million annual subsidy to help offset the cost of operating the arena, proposals that weren’t part of the framework agreement council approved last fall.
Although that October 2011 framework agreement states “the Katz Group … is to pay all operating expenses, capital maintenance and repair,” Katz insists some form of financial help was always contemplated.
Mayor Stephen Mandel insists someone from the Katz Group must attend Wednesday’s council meeting to detail exactly what the company wants and needs for the project to go ahead, calling this a “drop-dead date.”
Katz argued in a Journal interview last month that it would be smart for Edmonton to partner with the Oilers on the arena, as happened in Winnipeg, Pittsburgh and other cities.
“Fundamentally, all we want is a model that will sustain the team for the long term and is on par with other small markets, and what they’ve done to sustain their teams,” Katz said.
Which leads to another, perhaps fundamental, question: What deals have been offered in other small-market cities to get new arenas built or to help owners sustain their NHL teams?
It makes little sense to try to compare Edmonton with Toronto, where the population is five times bigger and the TV market much richer.
But to understand the drawn-out negotiations between Katz and the city, and to put those talks in context, it helps to have comparisons.
The proposed Edmonton arena, which most seem to agree would help transform the city’s downtown, can’t be seen or understood in isolation. It’s crucial to look at what happened, and continues to happen, in other small market NHL cities.
We decided to look at five other markets. The arenas we studied were chosen for several reasons: They were similar to the type of development proposed here (Columbus and Phoenix), they include linked deals like the one being floated in Edmonton (Pittsburgh), they are in similar-sized markets or were recently constructed (Winnipeg) or they were privately funding (Ottawa).
We set out to discover, for example:
what kinds of tax concessions, if any, were offered to get arenas built?
which arenas have ticket taxes, and who gets that money?
who owns the arena, and who gets the money from all the other events hosted there?
Daryl Katz wants the city to become the anchor tenant in an office tower he plans to build near the arena, a development he has said might be crucial to achieving the current design.
City manager Simon Farbrother has said the arenas and economics in every city are different, so it’s impossible to pick out parts of various deals and expect them to fit exactly in Edmonton.
“In Alberta, we’re looking at a different model, a different market, different revenue steams. It’s a different scenario.”
However, Farbrother agreed it’s useful to “peel back the onion” and try to learn from arena construction deals around North America, which is why the city has studied what happened in Pittsburgh, New Jersey and Columbus.
Use our interactive infographic to look at the proposed Edmonton deal and five other NHL arena projects to see how they compare.
© Copyright (c) The Edmonton Journal