Edmonton’s downtown arena project has been years in the making, but now, the deal between the city and the Katz Group has been put on ice.
Late Wednesday afternoon, city council unanimously passed a motion to cease negotiations on the proposed NHL arena (based on the October 2011 framework) after reaching a stalemate with the Katz Group and the owner of the Edmonton Oilers Daryl Katz.
Mayor Stephen Mandel had set October 17th as a “drop dead date” to have the Katz Group meet with council and iron out issues stalling the deal. However, on the 16th, Daryl Katz released a letter to the Mayor publicly, saying the Katz Group would not meet with council to discuss the outstanding issues. Council met with city administration as planned.
Councillor Dave Loken said the motion to cease all negotiations was a move council collectively thought was necessary.
“It became very obvious to us in the two hours proceeding the questions to the administration that negotiations were going nowhere,” he told Global News Thursday morning.
“We have this revenue situation which we’re no clearer on today… It would have been better to have a Katz Group representative there yesterday talking to us about that.”
However, since the Katz Group decided not to meet with council, members felt they had little choice but to put the deal on ice.
“It was just felt during the break that we needed to do something drastic in the sense of we need to move these negotiations on and to a conclusion,” said Loken.
The Mayor still hopes the end result will be a new downtown arena with the Katz Group, but given the lack of fruitful negotiations – and, he says, virtually no compromise on the part of the Katz Group – Wednesday’s motion was really the only option.
“Who do we negotiate with? What do we negotiate on … We don’t know what the issues are,” he said Thursday morning.
“It’s frustrating because council wants to do this, council is interested in making sure the Oilers stay here, making sure they’re sustainable,” stressed Mandel.
“But you have to have a partner that on the other side is willing to say: ok, we’re going to bend, we’re going to find ways to solve the problems that we have.”
Thursday afternoon, the Katz Group issued a short written statement in response to council’s motion:
Get breaking National news
“We are concerned about the implications of the
motion passed yesterday by City Council,” writes Daryl Katz. “We do not yet have a view on what
comes next, but we remain hopeful that there is a solution that achieves the
mutual goal of securing the Oilers¹ long-term sustainability in Edmonton.”
The Mayor says some of the outstanding issues are regarding the difference between the city’s revenue estimates and those of the Katz Group. That projected revenue is based on several elements, including what extra money will be made by thousands of additional arena seats, as well as food and drink sales. Mayor Mandel also says there’s a conflict over which party will pay for the pedestrian bridge over 104 Avenue.
“Those are the kind of things that we believe need to be compromised somehow, some place, some way, and there wasn’t any coming forward of compromise; none, and it’s been three years.”
An additional source of frustration for Mayor Mandel is that many of the discussions between council and the Katz Group played out solely in the media.
“This will be the last media interview I do over this,” he said Thursday. “We need to stop talking about this. And if we’re going to have any negotiations or discussions we need to do it not in the media, it doesn’t help anybody.”
Still, the public nature of some of the discussions may not be harming the perception of city council.
“There was overwhelming support by the public for us,” said Loken, “and it’s been that for over a month now, since we said no to the $6 million subsidy.”
While it may help public perception, many believe airing the details of negotiations publicly will not help advance the cause.
“I don’t know that it would necessarily be more productive for us to hear more from the Katz Group or any more from the city,” said Dan Tencer with 630 CHED.
“In terms of the process – if anything – the public forum here has exacerbated both sides a little bit,” he added.
Tencer said, while the public and media might want to hear more from the Katz Group, the company is not obliged to speak publically in the same way city officials are.
“You’re dealing with two completely different entities here. Of course, the mayor and city council is going to talk to the media… they have to, that’s an expectation of their job,” he explained. “Katz Group on the other hand… they are under no obligation like the city is to talk to the media, and they’ve obviously been a lot more deliberate in their communications.”
Tencer says don’t expect a response – written or otherwise – from the Katz Group to the city’s recent motion to cease negotiations. Until something changes behind the scenes on either side, he says, there’s not much left to negotiate.
That being said, council was careful to leave the door open for an arena deal involving the Katz Group. In fact, councillors included it specifically in the motion.
“The third point gives our administration many options to bring back to us in terms of long-term sustainability of the Edmonton Oilers in Edmonton, and that means a deal with the Katz Group,” explained Loken.
“We want the Edmonton Oilers to stay here. We want the team to make money, but not at any cost for us,” he added.
“Hopefully the Katz Group comes back to the table and we can begin some substantive negotiations and bring this thing to a conclusion… our number one desire is to get a deal with the Katz Group.”
The Mayor is on the same page.
“Council said yesterday unequivocally that the door’s open to the existing deal… that deal is there, it’s on the table, we’ll sign it,” said Mandel Thursday.
“We’re still hopeful,” echoed Loken. “There’s still a lot of room for the Katz Group to respond, to show some compromise here.”
“It’s their move.”
Mayor Stephen Mandel on the Morning News:
Coun. Dave Loken on the Morning News:
Comments
Want to discuss? Please read our Commenting Policy first.