I want to start by saying there are numerous reasons the Oiler's arena has been looking like it wouldn't work. Most people believe it is money and who would pay the money. Others believe it is municiple politics. Both of these play a part and I will touch on that but the final hurdle has been the Calgary Flames.
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Let us start with Katz and his role in this. When buying the team he was turned down twice by the previous owners. Local business men with some very loyal Oiler supporters among them, they were reluctant to part with the team to the reclusive billionaire whose intentions were unknown. To ease their minds, Katz made a proposal to make clear their minds of any worries. He stated that he too was a fan of the Edmonton Oilers and he planned on building a new arena and a new practice arena (to be a replacement of the arena that the University of Alberta) if the team was sold to him. Now the time has come for him to make good on that promise.
Katz has the ability to build the arena with his own money and still make hundreds of millions. There are in three years there will be arenas in Kansas, Markham, Quebec City and Seattle, all built by developers that have no teams set to play in them. They plan on making a profit as well so why is Katz, recently listed as the 498th richest man in the world, looking for investors. The truth is, because he can. There is more to it though. Katz could build an arena and call it a day, however he has been approached by numerous developers to build hotels, attached housing for the University nearby, asthetic storefronts by the downtown business association (which holds a lot of power with city hall) and the design became much more than an arena.
Katz rightfully thinks that the city should pay a portion due to the improvement the city will incure by the project. Truth be told he is increasing property value in a lower income area, creating jobs, bringing business back to the town center and setting the city up to be able to host lucrative conventions and world class sporting events in the future. The property taxes, income taxes, business licenses and increase to services owned by the city will pay for itself in less than a decade. This is not an uncommon thing to ask. The province of BC who is nowhere as rich as Alberta just spent over 600 million to have a retractable roof put on their stadium. That is more than this entire project.
The city council and the Katz group negotiate to get the best deal for both sides. The city pretends it is not making a ton of money and that they aren’t personally invested in the project in the fact that almost all will directly profit from it being built. They ride the fence on the news because we have old voters that don’t care about hockey. However they know in reality that this project needs to be built. They pretend but in the end they will cough up any money Katz asks for because they need this more than he needs them. He can always go back to building an average, normal arena on the edge of town which would force the city to get public transit to it.
Then there is the matter of the 100 million the province was asked to contribute and this is where the Flames come into the picture. The Premiere said that “there would be no direct funding for the arena” by the province. Read between the lines means that the province is willing to indirectly fund the province by use of money given to the city with no strings attached to it. However they can only do so much. The problem is that the province stands to gain a lot from an arena in downtown Edmonton.
Many of the reasons are the same as the cities. Improved infrastructure around the capital building, easier to attract international events, jobs, taxes but there is another factor. Katz plans on building over the downtown casino and build an amazing one. With the foot traffic in the area, the link to the University, its year round outdoor shopping, the attached hotels and condos… This stands to be one of the most profitable casinos in Alberta and probably in Western Canada. To put this in perspective, with 19 casinos, most of them really small, the government made 2.19 billion in PROFIT last year. This casino will make 800 million modestly and after expenses be worth at least 500 million profit (this is modest).
Why would the province who would gain more than their investment in one year not contribute? Two reasons, the first is small. They can’t really tell Joe farmer that they are investing because casinos are a cash cow. Despite being published on their website, this is something people choose to ignore. The big problem is the Calgary Flames.
Calgary has been wanting an arena as well for years now. Due to infrastructure they would have to build on the edge of the city or at least in an industrial area where land is cheaper. There is no option for them along current transit lines. Their arena would abandon the Stampede park area, which is a part of the city that they are trying to rejuvenate. Which is the opposite of Edmonton; however ownership does have the ability and the right to do it. They city would have to do their part and provide transit and infrastructure to the location to not mess with current city planning (which is a mess). However the province loses big if they move.
There are 6 casinos in Calgary. Two of the four most profitable ones are right beside the arena. When I say right beside I mean one is in the parking lot and the other is two blocks from that. The further one is all new and cost the province a bunch of money in the last decade to setup with some really fancy features. Both offer a wide variety of games and both are extremely busy after any event at the Saddle dome. If they give Edmonton 100 million, Calgary will want the same, however the province would stand to lose hundreds of million annually. They can’t build a casino on the outskirts of town and expect people to come. In a city as spread out as Calgary, they have a unique opportunity to cater to a large event area right now. That is why there is two there because they can’t find a better spot with that much foot traffic. You can say this is all about money but it isn’t. This is about A LOT of money which balances the provinces budget. Without it spending would have to be cut from schools, roads, hospitals…
The province wants the Oilers to have a new arena. It benefits them in a big way. They just don’t want Flames to have one.
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