pity the billionaire. katz group asks city council for more.

Daryl Katz Edmonton Downtown Arena Oilers

Pity the Billionaire. Oilers owner Daryl Katz asks Edmonton City Council to make more financial concessions in his sweat-heart deal to build a new downtown arena.

One week after Edmonton’s Chamber of Commerce warned of dramatic consequences if construction of the new downtown arena did not begin soon, the Katz Group, owned by billionaire Daryl Katz, has demanded further financial concessions to the already rich deal that City Councillors agreed to last year. Despite weak-kneed support by most Councillors who voted to build a downtown arena for the Katz Group-owned Edmonton Oilers last year, a pre-election year backbone appeared in Council Chambers today.

From the Edmonton Journal‘s Paula Simons:

In a last-minute addition to the agenda, councillors were given a top-secret briefing by city administration on negotiations with the Katz Group over a new downtown arena.

When councillors finally emerged from their closed-door meeting, they were grim. Without revealing any details of their private discussions, Bryan Anderson and Kim Krushell, two of the most passionate supporters of the arena project, moved and seconded a motion, written in the sort of code that could only be deciphered by longtime arenaologists.

Here’s the exact wording: “That in response to the Katz Group’s recent request for additional public funding, administration is directed to respond to the Katz Group that City Council remains committed to the negotiated framework approved by City Council on October 26, 2011.”

Simple translation?

No.

No more concessions for Daryl Katz and the Oilers. Councillors were united in their new-found resolve. Only Kerry Diotte and Linda Sloan voted against the motion — and that’s only because they thought last October’s deal was too rich. Read more…

According to a letter from Katz Group General Counsel John Karvellas, the current $450 million project, which includes $125 million from the City of Edmonton, $100 million from the Katz Group, and $125 million from a ticket tax. An additional $100 million is still missing from the funding formula. Edmonton Mayor Stephen Mandel told reporters today he is confident that money will become available from the provincial government (which may be unlikely following Finance Minister Doug Horner‘s projections of a potential $3 billion provincial budget deficit).

Meanwhile, Mr. Katz’s employees, Taylor Hall and Jordan Eberle, are signed up to earn $42-million and $36-million over the next seven and six years playing for the last-place Edmonton Oilers. Mr. Katz’s hockey company may operate in an alternate bizarro universe when signing paycheques, but these types of sky-high salaries make it difficult to feel sympathetic to his company’s plea for more financial concessions by Edmontonians.

Additional reading: Alex Abboud’s Edmonton’s Arena Will Likely Happen, But Would it be Bad Thing If It Didn’t?

8 thoughts on “pity the billionaire. katz group asks city council for more.

  1. jerrymacgp

    Not being an Edmonton taxpayer, or a hockey fan, I have avoided commenting on this story since it first broke many months ago. However, one aspect of it illustrates a larger issue that does impact the rest of the province (and indeed the entire country), and that is the whole notion of “top secret” negotiations involving the investment of taxpayer dollars.

    In my view, every discussion and every contract that involves public funds must be held in the full light of day. If a private corporation wants to keep its business private, it should not seek to do business with the public purse, and should get not one thin dime from the taxpayer. Accountability for public funds demand nothing less.

    Whether it be a public-private partnership such as a new arena in Edmonton, or a simple public procurement from a private-sector supplier, once you start doing business with the public sector, your business becomes everybody’s business. If you don’t like that, don’t bid on the project or procurement, or pay for it all yourself out of private funds. I would like to see this principle enshrined in all public purchasing policies at every level of government, from the smallest hamlet to the federal government, and from snowplowing contracts to military purchases.

    Reply
  2. Matthew

    Do I feel sorry for the Katz Group, no. But it is worth keeping in mind that it is not the Katz Group that will own the building afterwards, it’s the City of Edmonton. Because of this, at some level, I understand Katz’s reluctance to put more money into it when he will not own any of it. I think that is a point that is missed in a lot of the discussions.

    With that said I too feel frustration with the secrecy of taxdollars being thrown around in these negotiations. It should all be public for sure! I also don’t buy the threat of him moving the team. Move the team where? The Oilers, despite their lack of wins over the past few years are the 5th most profitable team in the league right now, at least last I heard. They aren’t going anywhere. Katz is blowing smoke!

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  3. Neal Gray

    Can’t really fault Katz here. I mean if I asked someone for a pile of money and they just gave it to me, I’d certainly go back and ask for more. You don’t mark a well as dry till it stops giving water.

    Reply
  4. Don Henderson

    The so-called secret negotiations between the Katz Group and the City of Edmonton seem to becoming more curiouser and curiouser. Is it correct the terms of the deal that the two parties had apparently agreed upon are now to be renegotiated per the Katz’ Group demands, once again in secret? If Katz has either purchased the casino property or has an option, who will own the land? And what will the Katz’ purported $100 million be spent on? Is it correct there will be an adjacent practice hockey facility for the Oilers that will also be available to the local community? Who will finance and own this? And why would such a facility be built on prime real estate in the downtown area? There is mention of a casino with revenues accruing to Katz Group? And a long-term lease by the City for an adjacenty office tower? This is more complicated than even the sale of the Phoenix Coyotes’ franchise, and we know this isn’t working very well.

    Reply
  5. Pingback: Reclusive billionaire allegedly donated $430,000 to PC Party, making a strong case for finance reform. | daveberta.ca - Alberta politics

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