EDMONTON – With a deadline looming, politicians in Edmonton are to learn Friday whether their mayor has broken a logjam in a fractious, polarized debate over a new rink for the National Hockey League Oilers.
Mayor Stephen Mandel is to share with councillors the results of a meeting he had Wednesday with Oilers owner Daryl Katz and NHL commissioner Gary Bettman in New York.
Time has become a factor in the four-year debate over a new home for the Oilers to replace Rexall Place, the second-oldest rink in the league. Katz has sent out a public letter saying his option to buy the downtown land for the arena expires Oct. 31—and if a deal is not done by then it could all fall apart.
But one councillor says it will take a magic act to figure out a way before November to rescue a straight-up business deal poisoned by ideology and petty personal attacks.
“It’s gone off the rails in that those who are most for it or against it have really becoming entrenched,” Coun. Kerry Diotte said in an interview.
The debate, he said, has become: “Katz is a billionaire so he can build it himself” versus “If you don’t want to lose the Oilers you’ve got to sign on a deal at any cost.”
Katz has never directly threatened to relocate the team, although he told councillors last year that the Oilers wouldn’t be playing at Rexall Place when the current lease expires after the 2013-14 season.
He has since backed away from that. He admitted in the open letter that because the issue has been dragged out, the Oilers will have to play there for at least one more season.
The sticking point is a framework struck last May between the city and the Katz Group.
The deal would see a $450-million rink built downtown on a cost-shared basis. The Katz Group would put up $100 million and tax ticket holders for another $125 million.
The city would pony up $125 million and the final $100 million would come from either the provincial or federal governments.
The city would own the building, but the Katz Group would run it and keep all the profits for the naming rights and for 11 months worth of events.
There are two main stumbling blocks.
The first is Northlands, the non-profit group that runs Rexall Place.
The Katz Group wants the city to sign a non-compete deal with Northlands. That would drive all of Northland’s lucrative concert revenue to Katz’s proposed new downtown facility.
The city refuses to do that. It says that if the Katz Group wants to pay Northlands to go out of business, it can go to Northlands and cut its own deal.
The other problem is money.
Neither the province nor the federal government will commit the $100 million, although the province has said that if the city wants to use its infrastructure grant money, it can.
There are other outstanding issues, such as who would pay for cost overruns and how much the city would have to pay for the surrounding infrastructure.
The debate has become personal. Some bloggers and letter writers compare Katz to Peter Pocklington, the former Oilers owner first loved, then loathed for selling star player Wayne Gretzky and later threatening to relocate the team to gain arena concessions.
That vitriol prompted local marketer Matthew Gresiuk to launch a website to deliver information on the issue and convince fans that a failed deal is also a failed opportunity to revitalize a downtown blighted by brown fields and vast tracts of cracked-concrete parking lots.
“We don’t hide (the fact) we do support the project,” said Gresiuk in an interview. “It does have a greater impact on the city, especially in the downtown core.
“It’s hard to point to the heart of the city,” he added. “There really isn’t one, and that’s difficult for residents, and for businesses to attract people.”
Diotte said while the issue has become pro-arena or anti-arena, most people calling his office support the concept of public aid, but wonder why this deal has to see the city take the bulk of the risk for minimal reward on the back end.
“That’s what’s ticking people off. That’s the one email that keeps recurring again and again and again,” he said.
“There’s always wiggle room on everything. If the deal is not consummated yet, why not go back and say, ‘Look, let’s have public buy-in and discuss some form of profit sharing.'”
Katz has said the Oilers are losing money and the deal is needed for them to effectively compete in the modern NHL.
The debate is a public relations battle that at times has seen the Katz Group be its own worst enemy.
Katz, a reclusive pharmacy magnate, has rarely spoken to the public. He prefers to dispatch news releases with no followup comment. Live interviews occur rarely and when they do are limited to broad questions from an Oilers radio employee.
On Wednesday, Katz left the New York meeting from a side door.
The result has been a news void his critics are happy to fill. When the Oct. 31 deadline letter went out with no followup comment, the evening newscasts led with the reaction—city councillors vowing not to be bullied and intimidated by Katz.
The Halloween deadline itself has inflamed passions. Proponents say it’s the perfect time to cut a decision and have a big party. Opponents acidly counter it’s also the same night people in colourful costumes come to your door trying to scare you while asking for a handout.