Funding Edmonton’s Downtown Arena, the strange comedy of errors continues.

The strange comedy of errors that has become Edmonton’s Downtown Arena project continued this week as City Council scrambled to fill a $100 million gap in a funding plan they approved months ago.

Stephen Mandel

Stephen Mandel

Despite repeated claims by Mayor Stephen Mandel that provincial government money would fill the $100 million gap, anyone who has paid any attention over the past year will know the province had no plans to provide funding for Edmonton’s Downtown Arena project. Premier Alison Redford, Finance Minister Doug Horner, and Municipal Affairs Minister Doug Griffiths have been consistent in their public comments on the topic: “no.”

In response to the lack of never-promised funding in last month’s provincial budget, the Mayor and seven Councillors voted to withdraw a $45 million loan to be paid back through future Municipal Sustainability Initiative funding that the city could receive over the next twenty-years. In response to the decision, Edmonton Journal’s Paula Simons reminded her readers this week, “[t]he clear intent of the original council resolution was that no deal would go ahead without $100 million in new provincial money.”

Daryl-Katz

Daryl Katz

In a display of common sense against what has become Mayor Mandel’s increasingly embarrassing obsession, five Councillors – Don IvesonBen HendersonLinda SloanKerry Diotte, and Tony Caterina – voted against the motion to dedicate future Municipal Sustainability Initiative funds to the proposed Arena.

Problematic for many reasons, this decision still leaves a $55 million gap in funding and Daryl Katz – the billionaire owner of the Edmonton Oilers – said he is not interested in renegotiating the financial arrangement agreed to months ago. Mayor Mandel claims this loan will convince the provincial to fill a smaller $55 million funding gap – something the province has said it has no interest in doing.

The Municipal Sustainability Initiative was created by Premier Ed Stelmach’s government in 2007 to provide funding to municipalities for public infrastructure projects. Municipalities have discretion over how this provincial money is spent and they have typically been used to fund public transit, libraries, community halls and utility infrastructure. Using these funds to build a new hockey arena to house a privately-owned business like the Edmonton Oilers would use funds that could be used for other much-needed community infrastructure projects.

A concern for City Councillors should be that, like all funding transfers from other levels of government, there is no assurance that the Municipal Sustainability Initiative will exist over the next twenty-years. Its continued existence is based on three factors the City of Edmonton has no control over: population growth, provincial revenue, and the continued desire of provincial politicians to continue the program.

Will the provincial government change its tune and provide $55 million in direct funding? Not very likely. Mayor Mandel’s warpath against post-secondary funding cuts will have left many already unsympathetic provincial politicians now even less-willing to contribute to the project.

Also problematic for the provincial government is the ongoing is the investigation by Alberta’s Chief Elections Officer into allegations that Mr. Katz violated the Elections Finances Act by donating more than $400,000 to the Progressive Conservative Party in the 2012 provincial election (the individual donation limit is $30,000).

10 thoughts on “Funding Edmonton’s Downtown Arena, the strange comedy of errors continues.

  1. Joyce Pon

    Edmonton’s City Council is leading us down a wrong path. We the taxpayers are tricked into the flawed deal, and forced to contribute yet more money,45 millions now–money better spent on our endless potholes. Just wait, Mandel is going to say what is 55 million more—why not just pay for it?
    When can we stop this INSANITY?

    Reply
  2. Sam Gunsch

    evidence-based democratic political systems would be a good thing…

    Why funding new sports stadiums can be a losing bet
    Building stadiums and arenas have little economic benefits for cities, research shows

    http://www.cbc.ca/news/canada/story/2013/01/30/sports-arenas-stadiums-cost.html

    http://www.bizjournals.com/milwaukee/blog/2013/04/serious-questions-on-economic-impact.html?page=all

    “Overall, publicly-financed sports venues have not paid off economically for the city, county or state governments financing them, at least in the last 15 years,” the report said.

    http://city.milwaukee.gov/ImageLibrary/Groups/ccCouncil/2013-PDF/10-0405-bradleyctrreport.pdf

    Economic Engines?
    Cities forge ahead with plans for new professional sports venues, despite their high cost and the tepid pace of development.

    http://archrecord.construction.com/features/2012/Sports-Facilities/Economic-Engines.asp

    excerpt: “The costs, however, have been staggering. Largely underwritten by public funds, the stadiums have saddled Hamilton County with debt. ”

    http://thesportdigest.com/2010/12/do-states-get-a-return-on-sports-facilities-investments/

    excerpt: “New Jersey is saddled with the debt of Giants Stadium 34 years after it was opened and months after it was demolished.”

    Reply
  3. Ryan

    It’s simple, all they have to do is find a businessman willing to pony up $55 million for a stake in the arena project and revenues. If it’s such a surefire success then surely SOMEBODY out there must be willing to invest?…

    Having said that, I think Oscar Wilde would be more capable of penning a satire about this council stumbling around with the arena than Shakespeare 🙂

    Reply
  4. ScienceOfficerSpock

    They could try buying a lottery ticket. Better chance than getting more money from the province.

    Reply
  5. Bruce Winter

    The $55M is in the deal. $20M in City advertising can be reassigned, and $25M from Winter Garden. KG can build that in their own, as it leads ti their entertainment distract across the road. Raise the ticket tax for the rest. The entire $100M could be done this way. KG doesn’t want to negotiate then don’t . Here’s the new deal take it or leave it.

    Rest of the funding is boogie woozy. Starting with the CRL. Money created from vapour. Only governments and banks can do that!

    Reply
  6. Bruce Winter

    The $55M is in the deal. $20M in City advertising can be reassigned, and $25M from Winter Garden. KG can build that in their own, as it leads ti their entertainment distract across the road. Raise the ticket tax for the rest. The entire $100M could be done this way. KG doesn’t want to negotiate then don’t . Here’s the new deal take it or leave it.

    Starting with the CRL the Rest of the funding is boogie woozy finance.. Money created from vapour. Only governments and banks can do that!

    Reply
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  10. Cory Choma

    I think that vision is a difficult thing to comprehend. When our football stadium was built there was heated debate on whether it should be domed or made to be state of the art natural grass. The forward thinking moron’s who voted decided on natural grass. The stat I have heard is that it saved us 5 million.

    Here we are, years later, the grass is gone and every year the stoic followers of the green and gold claim that they are great fans because they brave the cold.

    I say, they should have spent the 5 million!

    Same goes for the arena district, get over it people. The city will be a better place with the development. If you want the money spent on snow removal buy a shovel. Snow melts every year and no one will remember the city because we have great snow removal. Again, in case you missed it, BUY A SHOVEL. Build the arena district.

    Reply

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