EDMONTON - Edmonton expat W.P. Kinsella has a lot to answer for. Ever since his novel Shoeless Joe was transformed into the hit movie Field of Dreams, Kinsella’s immortal line, “If you build it, he will come” haunts every discussion of building new arenas and sports facilities.
Field of Dreams was a fantasy. That doesn’t stop boosters of new stadiums and arenas and ball parks from repeating the mantra as infallible prophesy: “If we build it, they will come” — they, being the fans, the tourists, the investors, the downtown entrepreneurs.
That’s been the core premise of a new hockey arena and concert bowl in downtown Edmonton — the hope such a building would magically transform our city centre. It remains to be seen whether that particular fantasy will ever come true. But now that Mayor Stephen Mandel has set a deadline of Oct. 17 as a drop-dead date for the Katz Group to explain what it wants in an arena deal, and with a Seattle radio station reporting that Oilers brass just toured Seattle, let’s rephrase the question.
If we built it, would they stay?
Daryl Katz, let’s recall, doesn’t actually own the site of the proposed arena.
You do. And so do I. The City of Edmonton now owns the property, and the site across the street.
“The deal to acquire the lands has closed and the City does have title to the 12.06 acres north of 104 Avenue between 101 Street and 104 Street as well as the 3.7 acre parcel south of 104 Avenue, between 102 Street and 103 Street, which is planned for the landing of the Winter Garden onto a pedestrian plaza and some associated private sector development,” Rick Daviss, the city’s executive director for the Edmonton arena district, told me in a recent email.
Daviss says the city bought the land north of 104th Avenue for $40 million, and paid an additional $33.6 million for the land on the south side of the avenue.
If and when the city and the Katz Group were to agree the deal between them had failed, says Daviss, the Katz Group would have a 90-day option to buy back the land. Otherwise, the title would remain in the hands of the city.
Now, suppose the city simply built a nice new arena on the site, without any direct involvement by the Katz Group? After all, this whole idea of a public-private partnership was always predicated on the notion that Daryl Katz was going to contribute $100 million to the construction of the arena, a very generous investment. But now, that original $100-million pledge has effectively evaporated.
Katz isn’t putting in any of that money up front. According to the deal reached last October, the Katz Group was supposed to make annual lease payments of approximately $5.5 million a year. Now, the Katz Group is demanding a new $6-million a year operating subsidy from the city — which would more than wipe out the rent payment. It makes a mockery of any notion of a $100 million contribution from Katz.
Why shouldn’t the city just go it alone? If Edmontonians sincerely agree that we need a new arena, and that we should put it downtown, why shouldn’t we go ahead and build one on the land we already own, pay all the costs, keep all the concert and rodeo and monster truck and food and drink revenues, and charge Katz — or some other NHL owner — a flat rent?
I put that question to Mandel last week. He cautioned me that the city would still have to negotiate with Katz. And the current deal, stalled though it may be, does include a location agreement, compelling the Oilers to stay here.
Starting over, with the city in charge, would mean taxpayers would take all the risk, with no guarantee of a long-term anchor tenant. Still, it would simplify and streamline the process immensely, because the city would no longer be trying to run a three-legged race, tied to a partner who won’t co-operate. It might also make the whole project more palatable to citizens, and to other levels of government, since the arena would truly become a piece of public infrastructure, not a de facto gift to a billionaire.
Could it work? I don’t know. But the current model doesn’t seem to be working anyway. Maybe it’s time to start over — with the city, not the team, in charge of our downtown’s future. Let’s not be sleepless — just because someone goes to Seattle.
To read Paula’s blog, go to edmontonjournal.com/Paulatics
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