Edmonton Oilers owner Daryl KatzReuters
The Edmonton Oilers have restarted negotiations with the city on a new downtown arena, but the project still needs an additional $100-million from the province – a request one colleague of team owner Daryl Katz doesn't think will be impacted by a major donation to the Premier's political campaign.
Katz Group officials appeared before council Wednesday, eight weeks after the city shut down negotiations. The sides remained far apart on both cost and revenue projections, and the Katz Group had tabled a new demand for an annual $6-million subsidy.
The Katz Group dropped that subsidy demand Wednesday, as well as one for the city to lease space in an adjacent office tower as part of the deal, in an effort to clear the air.
"We recognized coming in here we had a trust issue. What we put forward wasn't believed.…What we're trying to do is be open as we can with our projections so that you can be comfortable that we're not playing any games with you, we're not being sneaky and we're trying to regain the trust we obviously lost a few months back," Katz Group lawyer and executive vice-president John Karvellas told council.
Council voted overwhelmingly to restart negotiations, and to call in a mediator. The Katz Group thanked them for the second chance.
"It was hugely important for us to be able to do that, and not let this great project drift away like a lost ball in the ocean," Mr. Karvellas told reporters, contrasting it to a council meeting two months ago, which he said was "like an invitation to a public hanging."
But the massive project – an entertainment district in downtown Edmonton anchored by a new rink – is far from a done deal. Costs continue to rise and a funding model is murky.
The estimated arena cost is now $478-million, up from $450-million a year ago despite cost-cutting measures, the Katz Group said Wednesday. Mr. Katz, who didn't attend Wednesday's meeting, has pledged $100-million and the city has pledged $125-million, with another $125-million covered by a ticket tax and the remaining $100-million expected from "other orders of government" – presumably, the province. Cost overruns remain unbudgeted.
Alberta has steadfastly refused to "directly" fund an arena, but provides regular infrastructure grants to cities that could be tapped into. "I would hope the province would see it's about an Edmonton opportunity. It's not about a Katz opportunity, it's about an Edmonton opportunity. And we'll deal with the province when we have to deal with the province," Mayor Stephen Mandel said.
The talks come after Mr. Katz, according to Globe and Mail sources, wrote a single $430,000 cheque to Premier Alison Redford's Progressive Conservatives during the spring election campaign, a sum that was later divided among several entities for receipt purposes. Alberta caps individual donations at $30,000, but Ms. Redford has argued cheque-splitting is allowed.
Mr. Karvellas, who is one of the people issued a tax receipt, said they all donated because they bought into Ms. Redford's vision in a campaign where she fended off the Wildrose Party, which would have rolled back infrastructure grants. Mr. Karvellas doesn't expect political donations to impact arena talks.
"I doubt if it will have any significance one way or another," he said. Asked why he didn't write a cheque himself, Mr. Karvellas replied: "I'm not going to answer that today." Two other Katz associates who received receipts, Brad Gilewich and Bob Black, declined comment.
Councillor Don Iveson called the missing $100-million the "elephant in the room" Wednesday, suggesting to Mr. Karvellas the controversy over political donations may reduce the likelihood of the province kicking in cash.
Mr. Mandel applauded the Katz Group for returning to the table, before being asked if he felt optimistic about talks resuming.
"I don't know," he replied. "We'll see if anything happens from it."