City councilors Linda Sloan and Kerry Diotte were two of three councillors who voted against the revised arena deal on January 23, 2013 in Edmonton.
Photograph by: Greg Southam, Edmonton Journal
After all the years of negotiations, the vote was greeted by silence — followed by an awkwardly belated round of quiet applause from the Katz Group and their supporters.
Some of the anticlimax was related to the fact that the arena debate has dragged on so very long, and to the fact that this vote was a forgone conclusion. It was apparent early on that only Linda Sloan, Kerry Diotte, and Don Iveson would oppose the deal. Or perhaps the lack of jubilation, even from those who passionately supported the arena, related to the niggling knowledge that this deal isn’t quite done. Not yet.
The elephant in the room remains the outstanding $100 million that Mayor Stephen Mandel was insisting will somehow come from the province. This, even as Premier Alison Redford is preparing to deliver a television address on Thursday, to talk to Albertans about falling resource revenues and the tough, tough, budget ahead.
On Wednesday, Mandel was adamant that the province would soon be announcing a new plan or funding methodology to pay for major regional infrastructure, a plan that wouldn’t come from general revenues.
Still, given the hints Redford is dropping about bad budget news and program cuts, it’s hard to fathom this could be the right time, politically, for the Tories to ride to the rescue.
But there may have been another, more subtle, reason for the muted mood in the room. With this phase of the arena game concluded, a new political game is just beginning.
Wednesday’s vote likely means Mandel won’t run for a fourth term — not now that he’s accomplished so much of his policy wish-list. That leaves a good half-dozen councillors mulling mayoral ambitions. You could almost hear several of them launching their election campaigns as they spoke Wednesday, positioning themselves either as defenders of the public purse, or visionary champions of the downtown development.
Meanwhile, just what deal has this council endorsed? Happily, the Katz Group has abandoned the petulant demands it was making this fall. But the new deal gives them some significant wins.
Under the terms council approved in 2011, the Katz Group was to pay for all the arena’s operations and maintenance.
In the new deal, the city will assume the costs and responsibility for all the major building rehabilitation and structural repairs, things like the pipes, the air conditioning, the escalators. Those costs will be funded with a $1.5 million annual ticket tax, which could be hiked as needed. The money will be placed in a reserve fund — but any surplus will go directly back to the Katz Group.
The updated deal also gives the Edmonton Arena Corporation a guaranteed tax agreement. Under the old framework, the Katz Group had to pay all property taxes on the new arena. Now, EAC will pay $250,000 a year in city property taxes — for the next 35 years. Even if property values around the arena rise, or inflation soars, the tax bill will never, ever rise.
As well, the old deal gave the city the right to use the arena for 28 days a year, at its own discretion. Now, it can only use the arena on those days for community, not-for-profit functions. Hosting a commercial event like the Canadian Finals Rodeo on city time is explicitly forbidden.
But councillors, seemingly weary of debate, asked few questions about the financial nitty-gritty. Then again, they only got to learn about the new framework themselves Wednesday morning. Though Amarjeet Sohi complained about the optics of getting such a deal handed to them with so little time for scrutiny, most seemed content to take it on faith that city manager Simon Farbrother and his team had negotiated the best deal possible.
As well they may have done. These protracted negotiations with the mercurial Mr. Katz, have been tortuous. And Don Iveson surely spoke for many Edmontonians, be they arena boosters or opponents, when he said, “I don’t want our city to fight about this anymore. It’s been an open wound in Edmonton.”
Yes, love it or loathe it, this phase of the arena deal is done.
Now, it’s up to Edmontonians to make sure the city meets its pledge to build a truly great building — at a $480 million guaranteed price.
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