Downtown arena motion does not include second $100M pledge by Katz

The city isn’t requiring Edmonton Oilers owner Daryl Katz to stick to his pledge to put at least $100 million into downtown development as part of negotiations over a new arena.

When Katz met city council last July 21, he promised to contribute $100 million to the facility, but also vowed to spend roughly the same amount to help kick-start construction of other buildings in the area.

“In addition, I still fully intend to invest at least another $100 million in leading the development of the arena district,” he said during a presentation on the issue.

While the 17-point motion city council passed this week asking staff to continue working on an arena deal with Katz insists he put money into the facility, it doesn’t mention this second $100 million.

“I’m not concerned, but I would have felt better if plans for investment of the $100 million was in the motion,” Coun. Bryan Anderson said Thursday.

“But I do think that it’s going to happen, and I feel comfortable having (city manager Simon) Farbrother commit to me … that that topic will come up in negotiations.”

Council must also ratify any agreement that’s reached, he said.

The Katz cash was seen as one way to ensure enough development happens around an arena to generate the extra property taxes to help pay for the project through a community revitalization levy (CRL).

However, under the current motion the money going to the arena from the levy has been scaled back, replaced by other sources of civic funding.

Anderson can foresee Katz still investing in an adjacent 5,000-seat community rink, possibly for Oilers practices, or in space for a proposed hockey academy.

He also expects to see hotels and other structures built.

Mayor Stephen Mandel has told councillors Katz might still invest the money he discussed.

“I just think it’s being a bit presumptuous of us to say ‘you put $100 million into the CRL as part of building an arena,’ ” Mandel said.

“I just think if there’s good business reason to do it, that’s what he will do.”

Council has insisted the arena cost a maximum $450 million.

Coun. Kerry Diotte said this condition should ensure there aren’t cost over-runs.

“If you have a fixed price, that’s it. It’s like hiring a contractor, saying you will build a house for $450,000, sign on the bottom line. That’s the deal we’re trying to work out.”

Failing to achieve this in the final agreement would be a deal-breaker for him, Diotte said.

“I have heard loud and clear from people. They fear it could be double,” he said.

“You have to negotiate hard, and that’s a key one.”

There’s still a $100-million funding shortfall between the $450-million arena cost and the money expected from Katz, a ticket tax and city sources.

As well, city officials estimate there will be another $50 million in expenses to link the arena to the LRT, buy land and service the site.

Mandel plans to ask the province and the federal government for assistance.