EEDC’s Position on Arena

At the risk of being too outspoken on this topic, it is my intention to provide Edmontonians with EEDC’s absolute position on the new downtown arena.  The rhetoric on this issue will escalate in the weeks ahead, so please consider this to be my statement of record.

Over the past six months, we have have had the opportunity to review the assumptions, business models and pro-formas of all parties involved.  We have worked to find common ground between parties when needed, and we have struggled to watch the negotiations between parties unfold as they have.  However, our support for this project has been unwavering, as the economic benefits are game-changing and the financial outcomes remain sound.

Specifically, EEDC’s support for the new downtown arena is based on the following fundamentals, in real dollars:

  • Involved in $400-$500 million of new construction projects in the immediate vicinity that are targeting to proceed within 18 months of the arena’s approval;
  • Aware of an additional $500-$600 million of new capital expenditures planned to proceed approximately 18 months in advance of the arena opening;
  • Pro-formas conclude an average annual tax contribution of $19.5 million per year, which supports the 30-year financing of the missing $55 million; and
  • Positive economic impact of $17-$19 million per year in hospitality (food, beverage, entertainment) expenditures associated with the physical move of the Edmonton Oilers Hockey Club to the downtown core.

Although the above fundamentals provide substantial justification for the investment, EEDC believes the following qualitative factors should also drive decision making.  This investment:

  • Unshackles our civic brand from a history of inaction and indecision on major projects, and provides confidence to the business and entrepreneurial communities that #YEG is a place where big ideas can be brought to reality;
  • Solidifies Edmonton as the regional sports, entertainment, retail and hospitality centre for the rubber tire tourism market in Northern Alberta; it allows us to create new tourism products that appeal to those within a 400km radius;
  • Stimulates a doubling of the residential density required to create a critical mass of after-hours vibrancy and safety in the downtown core;
  • Adds necessary hotel capacity to support 8-10 new conferences and major events per year, reducing the ~25,000 room nights currently lost due to lack of supply; and
  • Concludes the 25-year debate and threat of moving the Edmonton Oilers to another market, thus affirming our position as a leading professional sports city in North America.

New arenas built in isolation rarely result in positive outcomes – see examples in Ottawa and Phoenix.  However, new arenas developed in association with a comprehensive downtown development plan have produced extraordinary benefits.  Having recently assessed the impact of major projects in Brooklyn, Pittsburgh, Columbus and Minnesota, we can confidently state that the work completed by City Administration is peer-reviewed as “leading practice” and Edmonton will soon become a reference site for other major municipalities that follow.

Like many of you, I find it most disappointing that the Government of Alberta is lacking the long-term thinking needed to invest in such a critical piece of economic infrastructure.  When we consider the $55 million request in the context of their $5 billion annual capital budget, the short-sightedness and political motivation is beyond comprehension.

Recognizing the province’s absence, it is more important than ever that Edmontonians and our City Council step up and show unified leadership.  We can comfortably finance the missing $55 million at $2.5 million per year within an annual $800 million municipal capital budget, and we can confidently approve both the CLR and the arena financing needed to move forward.

We have encouraged members of City Council to take a unified position on this matter and push our great city forward.  The business community is firmly behind the project and a timely decision, and we all look forward to realizing the positive economic gains over the decade ahead.

Each reader of this blog is encouraged to do the same, as this is YOUR arena and YOUR city.  Thank you for being interested and engaged.

– Brad.

21 thoughts on “EEDC’s Position on Arena

  1. This is an excellent article outlining the benefits of a new downtown arena district in Edmonton. Fingers crossed and hope it comes to fruition.

  2. Pingback: Edmonton Notes for 5/5/2013 - MasterMaq's Blog

  3. Glad to see EEDC taking a position on important long term issues based on hard facts and information and doing so publicly… Keep up the refreshing change in attitude and mandate fulfillment.

    Ken

  4. It’s one thing to be in support of downtown revitalization, with or without a new arena. It’s QUITE another thing to pressure for supporting the current financing scheme.
    Frankly, anyone who supports the current financing scheme is a complete and utter FOOL, an idiot, an imbecile and is quite possibly receiving inducements of some sort from the Katz Group-which category are you in, aside from probably having an IQ of 40?
    Most people in favour of the present financial deal don’t even LIVE in Edmonton, let alone pay Edmonton property taxes. This includes some in city management and administration. They should recuse themself from putting their names on any document supporting the current financial deal.
    I’ve lived in this city for over 67 years. My family, for over 125. I think that anyone supporting this deal should be horsewhipped, tarred and feathered, then run out of town, quite frankly. Scum like them are NOT wanted here.

    • Wow. You very nearly presented an intelligent counter argument prior to ruining any and all credibility you may have had by resorting to insults, name calling, and eventually some bizarre sort of violent idealogical-xenophiba.

      Which is unfortunate, really, because you make those of us who attempt to have calm rational discussions on the topic, and who (like myself) do still feel the Arena is a bad idea, for a variety of reasons, look like nothing more than mud-slinging apes.

      If you honestly care about the city you live in, and want to have your voice heard – then you’d do well to not come across as an angry redneck. It makes people on the other side of the debate dismiss your viewpoint immediately, and it makes the other people on your side look bad by association.

      • calling people rednecks is somewhat shocking from an intellectual such as you seem to think you are … people sporting red necks have them because they spend their time working outdoors, rain, snow or shine, in wheat fields or oil fields, construction or whatnot … it might be a good idea if you refrained from describing people thus and, instead, outlined why should taxpayers build a private building for a private entrepreneur …
        if mr. katz feels he needs a new arena, fine, let him build it … or: when you decided to buy or build yourself a house, did you demand that the rest of us taxpayers pitch in so you can live in whatever luxury?
        http://blogs.edmontonjournal.com/2013/05/08/katz-shouldnt-just-pay-55-million-he-should-pay-entire-shot-adler-says/

    • Split it? He should pay ALL of it. Under the present agreement, the Katz Group is paying, at best , THREE million actual cash a year while the city pays HUNDREDS OF MILLIONS.

  5. Well said Brad! I completely agree that this is a “must have” project for our city and for our province. While I am not 100% informed on the actual ROI of this venture, it has been suggested that this will be a profitable venue that will generate positive returns. If this is the case, then perhaps this can be structured like any other business opportunity and open it up to investors. Each investor realizing a proportionate share of the profits and, potentially, preferred ticket and sponsorship options on events held in the new arena. Just a thought!

    • Dean, what rock have YOU been living under? The “deal” is ALREADY structured to give Katz almost ALL the power and ALL the profits, with the City (read TAXPAYERS) having to ante up ALL the financing and over 90% of the capital. Do you even exist or is your posting simply coming from some hack in the EEDC? I thought so.

    • Dean; i would agree that this is a great project for downtown Edmonton. The issues is where the funds will come from and what “other” projects will suffer or unreasonably delayed; i.e. road mtnce, recreational facilities, disadvantaged people and health safety systems . Further, the City continues to come up with more capital projects (beach without water!!, river revitalization) – yet we seem to still be missing $55M for the arena. Plus who knows the final tally. Yes, we are stuck with the arena agreement (poorly negotiated) the City signed, but so be it. I just think a more realistic capital budget expenditure plan be aggressively reviewed by a team of financial astute business people, rather than relying on the City’s administration team, whose financial budgeting track record (in my opinion) is extermely questionable!

  6. If this is such a great deal, them you people put up the cash instead of tax payers. It is not an end all for everyone. It is an arena, and a very limited percentage of tax payers will ever get to use it. Yes it will generate cash, but only for the coffers of the rich. While the tax payer keeps on shelling out. People like Katz the winners tax payers the losers. 500 Mil to zero.

  7. Good idea Skoubis. Still not sure why, if this downtown arena is a slam dunk, the money required for this deal can’t be raised privately.

  8. Usually i wouldn’t post on something like this but I’m going to because i see that no one has commented from the perspective that I’m most intrigued by.

    The Arena, as a project, is going to be great for Edmonton. Most citizens are stumbling on the economics of it all and i do agree with those that are of the mind that tax payers shouldn’t be paying for a building that will make a billionaire even more money. But instead of backing away from the deal screaming “WE WONT PAY”, i say “LETS PAY FOR IT ALL.. but we want the profits too”. Why can’t the city build this as an investment in itself that will pay off for the next 30+ years? Does the arena HAVE to be a money pit for the next 3 decades? Katz isn’t in this deal to lose money, he will fill his pockets many times over with the current economic structure. If he can make money, why can’t the city cut him out and fill their (our) pockets instead?

    If this project is going to bring so much good to the city of Edmonton, why can’t the funding structure be setup in such a way that Edmontonians can be really excited about it?
    Papers Read:
    “City plans to build new arena on its own: Daryl left with Tenant agreements”
    Followed by
    “Arena Profits to fully fund LRT Expansion to WEM. Edmonton hailed as forward thinking city”

    Dare to dream? *shrug*

    • I do not agree we need this extravagant arena. However if must be then it should be Edmontons arena, not Daryl Katz. Keep profits for Edmonton.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s