Simons: City no longer knows what Oilers owner wants

 

 
 
 
 
Mayor Stephen Mandel speaks during debate over the new arena budget at City Hall July 17, 2012.
 

Mayor Stephen Mandel speaks during debate over the new arena budget at City Hall July 17, 2012.

Photograph by: Jason Franson, edmontonjournal.com

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What does Daryl Katz want?

“I don’t know,” says Stephen Mandel. “I don’t know what he’s asking for. He needs to come and tell us. I don’t know anymore.”

In a no-nonsense statement released late Tuesday, the mayor invites, or summons, Daryl Katz or senior representatives of the Katz Group to come before council, in an open, public session, to explain, in detail, what they want to make this hockey arena deal work, and why the old framework, approved last October, suddenly isn’t good enough.

“Failing this clarification, what is clear is that the city cannot continue indefinitely without full consideration of its position,” reads the statement.

Decoded? Unless Katz — or someone with full authority to speak for him — steps up, and soon, this deal is dead.

What would it take to derail the entire arena project?

“We’re getting close, aren’t we?” says Mandel. “You have to have great patience in this job, if you want to get things done. But if you don’t know what somebody wants, it’s hard to negotiate with yourself.”

“It has to be absolutely open. No more secrecy. He needs to come and tell us what he wants. Then council can make a decision about whether we can work with that — or some other alternative.”

You can forgive Mandel for sounding chippy. The city has already bought and paid for the land chosen and assembled by Katz. It has agreed to give Katz all the revenues from the arena. It has accepted the Katz Group’s choice of architect and design. Then, last week, council was hit by what it saw as a raft of new demands. Despite the gush of leaks from both sides, Mandel says he’s still bound by a confidentiality agreement. But he will say the list of new asks goes well beyond the $6-million annual subsidy request Katz has already confirmed.

“There’s a whole bunch more that they’ve given to us. It’s way more than $6 million. There’s way more than that.”

To Katz, though, these aren’t new demands.

In Katzland, where upside-down logic prevails, he’s actually given the city a $200 million subsidy. In his world view, he bought the Oilers for the people of Edmonton, and the city has benefited from his beneficence ever since.

Katz appears to believe the city promised him dedicated ongoing funding, derived from a new casino, which is supposed to be part of the arena entertainment district.

Revenues from casino table games are split 50/50 between the casino operator and the various charities whose volunteers staff the casinos. Slots revenues are split three ways: 15 per cent to the operator, 15 per cent to the charity, 70 per cent to the Alberta Lottery Fund.

Katz may have expected the province to give him a cut of those lottery fund dollars. But city council never had any power to guarantee such a lucrative provincial subsidy for one business. And the province surely never had any political incentive to torque its charitable gaming policy to benefit one NHL franchise.

Either way, the Alberta Gaming and Liquor Commission says neither the city nor the Katz Group applied for any special casino consideration. Mandel says there were some very tentative discussions about improving the take to benefit casino operators across the province.

“We said we would help with a lobbying effort,” says Mandel. “We have no control over casinos, so I don’t know where that comes from.”

Nonetheless, Katz seems to feel taxpayers morally owe him a $6-million annual subsidy to make up for those hypothetical lost casino revenues.

That’s only the start. Katz isn’t just asking for more cash, up front, to build a better arena. That wouldn’t really be unreasonable. Instead, it seems he’s asking for ongoing financial support, for a unending succession of handouts from taxpayers. Like a slacker who won’t move out of his parents’ basement, Katz seems to want a permanent public allowance.

Despite the higher revenues the new arena would generate, despite the strong Canadian dollar, which lowers the cost of player salaries, despite the rabid support of Edmonton fans, despite the fact Edmonton has absolutely the hottest economy in Canada, if not North America, Daryl Katz says, in effect, he cannot sustain the Oilers without ongoing public subsidies. Perhaps that’s true. But if booming, hockey-mad Edmonton truly can’t support a team without putting Taylor Hall and Jordan Eberle on the public payroll, the NHL model itself is horribly broken. And that’s not a problem Edmonton taxpayers can fix.

psimons@edmontonjournal.com

Twitter.com/Paulatics

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To read more about the arena, go to edmontonjournal.com/edmontoncommons

 
 
 
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Mayor Stephen Mandel speaks during debate over the new arena budget at City Hall July 17, 2012.
 

Mayor Stephen Mandel speaks during debate over the new arena budget at City Hall July 17, 2012.

Photograph by: Jason Franson, edmontonjournal.com

 
 
 
 
 
 
 
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