Arena Debate Closing Remarks

On Wednesday, City Council voted to support the arena agreement framework and move forward on design. I voted against this course of action. Below are my closing remarks:

I maintain reservations regarding costs and subsequent risks that the City is undertaking. Even assuming the province comes through with $100M that isn’t MSI funding and approves the CRL, we are looking at close to $250 of capital costs including:

• $125 Arena
• $? Land Costs beyond the $25M originally suggested
• $34.5 104 ave and incremental pedways
• $17 LRT
• $7 Community rink
• $? Off-site servicing
• $? Road upgrades

All this with no guarantee the arena district will result in revitalization. The Katz groups claim they have been talking to major hotels and businesses, but none of those have come forward to express public interest in building on the surrounding site. The money we pay towards this project is deceptive. Interest payments the City pays over a 20 year term are projected at an additional $97M (attachment 5 from yesterday).

I am further concerned that a lack of clarity has resulted in the Council and Administration to loose face in front of the public. Poorly communicating the components of the framework to the public is one component of my frustration, but I find myself equally frustrated with the lack of clarity regarding our contribution to this project - $24M of which is currently under the guise of “re-directed expenditures”. I believe we have also failed to give due consideration to the current tax revenue being lost by purchasing the arena lands. This year, those revenues were valued at $768,000. Even assuming assessment values and mill rates remained constant (likely to go up), that constituents a $15M revenue source over the next 20 years.

Another aspect of this deal breaks a century old partnership with Northlands. With no official notice, active involvement or input the good will and working partnership that has brought so much culture and entertainment to Edmonton has been abandoned to construct this deal with a largely inexperienced partner.

Finally, I have not been satisfied that we have sought sufficient collateral from the Katz group in the case he defaults from his contribution. Taking over the arena and its revenues in the case of a Katz default also entails taking on the costs and finding the personnel to manage it. This is simply not sufficient when dealing with a project of this magnitude.