The deal is done. And man are there some problems with this thing.
Before we even get to the issues, it sure was nice of Daryl Katz to present himself before a City Council planning to hand him more money than he’s putting in to the project himself. After all…oh…no? He wasn’t there? He couldn’t be bothered to show up? Huh. Say, has anyone ever actually SEEN Daryl Katz? Can anyone confirm that he’s a real person? Or might he be embroiled in a relationship with Manti Te’o…
Oh, but some Oilers were there! Well, goodie goodie gum drops! Listening to Edmonton City Council members gush over these guys like 12 year old girls bumping in to Justin Bieber was beyond embarrassing. Ugh. The utter grab ass going on gave me douche chills. Folks, you control an entire city. Perhaps try to resemble grown adults when conducting business and ditch the horrible fawning.
And now, on to the deal!
It’s a $601-million project, including a $480-million arena, a $21-million community rink, a $53-million Winter Garden plaza of shops and a light-rail transit station.
That’s all well and good, but you know what I don’t see ANY mention of in there? Covering the cost of changing infrastructure. Do you think that MAYBE traffic lights might have to be added and/or moved around? What about street traffic flows…seems to me that some of that might have to be studied and possibly altered, too. Hell, what about the traffic increases in to and out of the downtown core before and after games? Has anyone even thought about the fact that this guarantees a need for future road expansion, or are we still pretending that everyone will start riding the bus and LRT everywhere? And where exactly are all of these people going to park?
Hey, I’m sure that the much promised downtown commercial development will fund a lot of that, right? We’ve heard for years about how hotels and restaurants and bars will flock to the core, expanding tax revenues well beyond imagination! And hey, maybe it will happen. But for right now, it’s all just empty promises. I haven’t seen mention of a single, solitary deal to build ANYTHING as a result of this project going through. This is one of many reasons that I laugh my ass off whenever anyone from the Katz group has the temerity to compare this deal to the one signed between the city of San Diego and the Padres to build Petco Park. In that case, the Padres owner actually went and got signed building agreements from commercial interests that became binding once park construction began.
Taxes will not increase for the project.
Instead, the city will raise its funding through something called a "community revitalization levy." Essentially, the city is banking on the arena spurring development along the north fringe of downtown, which would increase property values and, as such, revenue. The city says that new revenue wouldn’t come in without an arena, and will direct it towards paying for the arena.
Sure is a good thing that they aren’t RELYING ABSOLUTELY on empty promises by business to TOTALLY come in and build…you know, maybe. If other stuff happens. And things work out. And such. And even those vague nothings weren’t actually made to the city, they were supposedly made to the Katz Group. The same Katz Group who have still not opened up any of their books at all to anyone associated with the City of Edmonton.
Under the deal presented and approved Wednesday, the city will provide $219-million in total funding, including $140-million toward the arena itself. The Katz Group will provide $143-million in total funding, including $115-million toward the arena itself and $28-million to the Winter Garden. Another $125-million will be provided by a ticket surcharge, all of it directed to the arena itself.
Hmmm. Call me crazy, but that doesn’t add up to the $601 million total. In fact it seems to come up quite short of that figure.
Eyes will now turn to the province. The city is banking on a total of $114-million in "other government" funding. It includes $100-million for the NHL arena from the province, and $7 million each from Ottawa and the province for the community rink.
Good thing that the province isn’t suffering from any budget shortfalls, right? It sure would be awkward if bitumen royalties were at a near all-time low right now!
…Speaking to reporters later, he suggested the price discount for Alberta oilsands versus benchmark light crude oil — a differential that exceeded $40 a barrel last month — will put the province more than $3-billion below its revenue projections in the 2012-13 budget.
“It’s not pretty,” he said. “This differential has widened out during a period of time where seasonality would normally indicate we would get a better result.
“We did not.”
Oh. Well. Uhhh…
The city will own the arena and pay for any major upgrades, but the Katz Group will operate and maintain it while paying $250,000 in annual property taxes. The Oilers will also receive all revenues from the rink, including lucrative naming rights, as well as $2-million in annual advertising from the city. The Katz Group will also pay its share of the capital costs over the course of the 35-year deal.
All-in, the team will pay about $4-million a year, roughly double its rent at the current, aging rink.
So the city owns the rink and has to pay for any major upgrades. But they don’t get to sell the naming rights to a building that they ostensibly own? And they’re paying money to run ads…IN A BUILDING THEY OWN?
Questions remain. One is what happens if the project goes beyond $480-million. City staff simply said it won’t, although it’s budget has already expanded from $450-million.
I want you to try to think of a single, solitary major construction project that has EVER come in on budget. Try to come up with one example of a big bridge construction or road expansion or anything else that hasn’t gone over budget. Yeah, I’m not going to wait because I would be sitting here FOREVER. But why plan for any sort of contingency?! Fuck that, we’ve got RYAN SMYTH at our council meeting!
In what world does that this piece of crap even begin to make sense? Oh, a world where a City Council (and I hope to later find out that they were blind-ass drunk or something. It might explain this) convinces itself that they need to sign off on a contract filled with more gaping holes than a wheel of Swiss Cheese. You know, when they aren’t busy mooning over Jordan Eberle showing up to the meeting. Nice job, Edmonton city council. Fine work you’ve done here.