Protecting the Public Interest: Arena Non Negotiables

During the January proposed downtown arena hearings, I questioned the City’s effectiveness as a negotiator that protects the public interests. It has instead become increasingly evident that the City has tied the fate of downtown revitalization to the arena project.

Supporters of the project would say it is using public assets and investment as an effective leverage for future revitalization efforts. If that were true, then those same public assets and investments should be fairly valued and offset with private sector collateral. To date, there is no offer other than that of the initial $100 million extended by Mr. Katz to Council last July. The City's investment in land and borrowing will undoubtedly exceed $500 million.

What is also an aspect of the negotiations is the future of Rexall Place. Evidence suggests that it would be difficult to run two competing facilities. With Rexall still being a viable and functional facility, it would seem narrow-minded to forfeit this asset in the interests of downtown development.

Furthermore, the losses to Northlands should be considered. Northlands, as a public entity serving the city of Edmonton, has a legacy of public/community investment dating back 100 years. If the public interest is to be served, the City should see collateral guarantees that offset the revenue losses associated with the Oilers receiving all operational revenue.

Finally the implications of the proposed Community Revitalization Levy must be properly understood. First, it should be recognized that City maintenance costs would exist within the new development area. One cannot suggest that taxes remain unaffected if maintenance costs in the area need to be covered by the general tax levy. Second, while the levy is proposed to raise approximately $125 million, the development timelines are extremely questionable. If delays occur, the CRL revenues may fall short of paying the debt. The City should therefore be pressing the Katz Group for guarantees that additional collateral will be available to ensure Edmontonians are not covering any shortfalls.