The arena deal is dead, but the City of Edmonton came away the victor

After a heated discussion on the arena yesterday afternoon, City Council voted to cease all negotiations with the Katz Group and directed Administration to explore alternatives. Here are the three motions they passed:

  1. As a result of Mr. Katz’s letter and unwillingness to have an open discussion with Council and the frustration of the Interim Design Agreement, all negotiations and ongoing City work related to the October 26, 2011, framework cease immediately.
  2. That Administration provide a report, as soon as possible, to City Council to report on the completion of the cessation of negotiations and the status of the City’s current, transferable investments in a potential downtown arena project.
  3. That Administration provide a report outlining a framework for Council to explore potential avenues to achieve the long term goals of sustainable NHL Hockey in Edmonton.

That means the arena as we know it is dead, but it doesn’t mean that a new arena is completely off the table. With that third motion, Administration is empowered to explore alternatives to working with the Katz Group, which could mean the City builds a new arena by itself. Here’s the full video of Mayor Mandel and City Manager Simon Farbrother answering questions about yesterday’s meeting:

Supporters of the arena will no doubt lament the fact that we appear to be no further ahead than we were four years ago, but I don’t think that’s true. Here are some of the reasons that I think the City and Council came away the victors in this whole debacle:

  • The City owns the land. No matter what happens with the arena, that land was a great investment. And I’d much rather have the City own it than some speculator who is just going to sit on it.
  • The City owns the design of the arena. Last October, Council directed Administration to spend $30 million to get the design completed to 60%. The City can take this design to a new partner or use it as the basis for building the arena itself.
  • The City now has a head start on a CRL for downtown. I think a case could be made for a downtown CRL even without the arena. Maybe it would be scaled back, but all the work that has already been done to develop the CRL plans could be reused.
  • Council no longer look like the bad guys & gals. I’m no fan of the way that Council handled the negotiations over the last couple of years, but fortunately for them Katz handled things even more poorly!
  • It may seem as though Katz has the upper hand with the ability to move the team elsewhere, but that has always been an empty threat and remains so. The NHL still wants hockey in Edmonton, and I honestly believe that Katz wants to keep the Oilers here too. If anything has changed, it’s that the NHL would be even less likely to allow a move now that Council has done everything it can to work with the Katz Group.

I’m less confident this will actually come to pass, but I was encouraged by comments made yesterday by one of the Councillors that the “unprecedented” use of in-camera sessions should be avoided in the future. It’s clear that the private meetings did more harm than good in progressing the deal and getting Council what they wanted, and I hope that means Council will avoid in-camera sessions in the future.

The arena is getting all the attention right now, but in the grand scheme of things, there are far more important issues for Council to be dealing with. More than 150 neighbourhoods need renewal and it’s going to take billions to maintain all of that infrastructure. At the same time, Edmonton’s population and economy continue to grow much faster than the national average and that means big pressures in terms of where we put new infrastructure, how we move people efficiently throughout the city, etc. As soon as they were done with the arena issue yesterday, Council starting talking about the LRT.

Back to business.

11 thoughts on “The arena deal is dead, but the City of Edmonton came away the victor

  1. FYI: if the deal falls through, Katz has the option to buy back the land first so while the city does own it today, it may not tomorrow. Also, the City co-owns the design of the arena with Katz.

      1. They mentioned this yesterday during council that it was joint ownership (Loken asked who owns design and reply was joint).

  2. It’s too early to tell who the victor is but I don’t expect it’s going to be the city. I was going to make the same point as Marsha: Katz has that option to buy back the land. What the real value of the land is, who knows? And what Katz’s option price is, we don’t know. In the end, the city (and ultimately, taxpayers) could have greatly overpaid for that piece of land, and Katz walks away with a tidy profit on it either way.

  3. I agree with Alain. The City does not own the land until Katz decides not to exercise his option to buy. I would be surprised if he did so, and I would also be surprised if the City went ahead with an arena or design process without Katz involvement. Ultimately for a new arena to be built, it will take both parties to be involved.

    My concern is the lack of funding for the ‘catalyst’ projects downtown, namely those mentioned in the Capital City Downtown Plan (CCDP). Council has done minimal capital investment in downtown projects because of the promise of the CRL. I agree that is could happen without the arena, but that was the whole impetus for the theory that an arena would attract development. It causes me and my fellow downtown residents some level of worry and concern about how necessary downtown projects will be paid for by Council now and in the future without an arena deal. They committed to the CCDP in 2010, now they need to implement it.

  4. Good points Alain, Marsha, and Chris. One thing I am uncertain about is whether the buy-back opportunity applies to ALL the land, or just the surrounding lands. That is, would Katz buy back even the land that the City acquired for the community rink? I don’t think so, but I haven’t been able to find the details yet.

  5. It is like you answered my Christmas list to Santa, answering all of my questions. I particularly agree that city council comes away wearing the white hat in this, leaving Katz to twirl his villianous moustachio. And that may be the biggest win for this arena project. Many fence-sitters, like myself, and outright arena haters, feel as though we have shared some sort of victory here.

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