Confirmed with Link: Katz Group in legal battle with Boyle Street

[Drivesaitl]

The way I understand it is the foundation gave them 10 million for the new building then they promised 5 million more under certain conditions. So potentially 15 million of a 28 million dollar project.

Now the project is two years behind schedule, which if the lease would have been extended it would have cost OEG a whack in development time etc.

While it's a bad look for Katz, the OEG did funnel a ton of cash to Boyle street.

5M for the Boyle Street Coop lot as well which prior to Ice District investment sure wasn't worth that.

I continue to wonder about Boyle Street Coop's own funding and fundraising and how much of it they were earmarking to their primary project, and/or how much of their funding/priority was directed at other projects and not their main missive. Strikes me as odd that an entity was trying to establish and further several other endeavors when their flagship dream was going down.

 

[mkatcherin00]

Optics are bad but I bet it’s not as bad is it looks. Hasn’t Katz been attempting to relocate that shelter for awhile now, get it away from the Ice District?

It's never as bad as it looks most of the time. This is the cancel culture/ vulture culture these days. People froth at the mouth to jump on anybody or anything online. 95% of people will never even open an article or go educate themselves on the facts.

Context is not king in todays world.

 

[McShogun99]

Just move every shelter into Rexall Place and let it turn into a post Mad Max society. Katz gets to jeep the area around the new arena looking good with no homeless and the homeless get a mini city sized lawless building to live in. Everybody wins........

 

[Sheikyerbouti]

Conditional charity is not charity. Katz group made this offer because they wanted the land and relocation of a social service stream they desired undesirable. It's been there for 25 years. They "donated" a relocation

Everything Katz does in Edmonton is about land, and it always has been. People need to wake up.

Nobody raises 7.3 million to address homelessness without a herculean level of trying, and the goal was 8.5. Katz group is going to argue in court Boyle didn't try hard enough

When Boyle asked for an extension on the lease, Katz group made the extension conditional on the 5 million. They were already looking for an out because they got what they wanted, the land, and control of relocation

Boyle can't win the legal battle, but Katz can spend 4 million on lawyers and still profit

 

[Sheikyerbouti]

5M for the Boyle Street Coop lot as well which prior to Ice District investment sure wasn't worth that.

It's not that simple, and it's worth more than that to Katz or he wouldn't have made the offer. Land value is determined by what someone will pay for it.

It's not just the value of this specific property, it's the correlation to the value of all the properties Katz owns around it.


They don't care about homeless people, they care about homeless people near the Katz district

 

[Behind Enemy Lines]

5M for the Boyle Street Coop lot as well which prior to Ice District investment sure wasn't worth that.

I continue to wonder about Boyle Street Coop's own funding and fundraising and how much of it they were earmarking to their primary project, and/or how much of their funding/priority was directed at other projects and not their main missive. Strikes me as odd that an entity was trying to establish and further several other endeavors when their flagship dream was going down.

It's a pretty easy thing to look up without casting aspersions. They like all charitable organizations are required to submit to CRA annually and subject to audit and in extreme case shut down. Per their website Boyle Street Community Services is the trade name of The Boyle Street Service Society, an Alberta society and a registered charity.

Internal server error - Canada.ca / Erreur interne du serveur - Canada.ca

500

apps.cra-arc.gc.ca

There you will find their audited financial statements and a list of their core programs (which is extensive) along with what they identify as new programs:
1) OVERDOSE PREVENTION PROGRAMS (MULTIPLE) 2) NALOXONE PROGRAM 3) DRUG POISONING ANALYSIST PROGRAM 4) TRINITY PROJECT

Now I don't live in Edmonton so I don't know if homelessness, mental illness, addiction issues post-pandemic are static, reducing, or as I suspect like most major centres increasing. Demand for services are growing significantly virtually everywhere but maybe Edmonton is different. The burden to help usually falls to non-profit and charitable organizations like Boyle Street Service Society who can be capsized financially while being stretched to help. Add a capital campaign and the organization is essentially trying to metaphorically drive on two highways simultaneously.

Now if you add the downward trend in philanthropy giving in Canada you have a perfect storm of rising demand for services and support by clientele while post-covid economic recovery is squeezing everyone. Link to philanthropic giving trend: Charitable giving has reached a historic low in Canada - now what? - Ontario Nonprofit Network.

 

[BlackDogg]

CBC so interpret the exact opposite of what it says

 

[TheNumber4]

I see the mains is already using this as a way to attack the Oilers. This gonna be that whole Kane thing all over again.

 

[Drivesaitl]

It's a pretty easy thing to look up without casting aspersions. They like all charitable organizations are required to submit to CRA annually and subject to audit and in extreme case shut down. Per their website Boyle Street Community Services is the trade name of The Boyle Street Service Society, an Alberta society and a registered charity.

Internal server error - Canada.ca / Erreur interne du serveur - Canada.ca

500

apps.cra-arc.gc.ca

There you will find their audited financial statements and a list of their core programs (which is extensive) along with what they identify as new programs:
1) OVERDOSE PREVENTION PROGRAMS (MULTIPLE) 2) NALOXONE PROGRAM 3) DRUG POISONING ANALYSIST PROGRAM 4) TRINITY PROJECT

Now I don't live in Edmonton so I don't know if homelessness, mental illness, addiction issues post-pandemic are static, reducing, or as I suspect like most major centres increasing. Demand for services are growing significantly virtually everywhere but maybe Edmonton is different. The burden to help usually falls to non-profit and charitable organizations like Boyle Street Service Society who can be capsized financially while being stretched to help. Add a capital campaign and the organization is essentially trying to metaphorically drive on two highways simultaneously.

Now if you add the downward trend in philanthropy giving in Canada you have a perfect storm of rising demand for services and support by clientele while post-covid economic recovery is squeezing everyone. Link to philanthropic giving trend: Charitable giving has reached a historic low in Canada - now what? - Ontario Nonprofit Network.

This gets into a rabbit hole that I really prefer not to get into too much here whereby theres intersectionality between belief systems of potential donors and ongoing changing belief systems of the hands on the ground orgs. To the point where would be philanthropists no longer feel enthralled making the same donations for that which they do not believe in as pursuits.

This is the biggest crisis faced and the community orgs caught up in their own hubris about what they service and why. In the end you end up with some Community orgs providing specific service that is no longer supported by the general public either in dollar or in mind.

The rising demand in services is a whole other bowl. One that wasn't helped by 2K/mth free money per month being doled out in this country during pandemic as if this was a welfare state. The calamity from that persists as it does in such states where able bodied people are just handed money to sit on their ass. Thats the easiest way to create dependence and free hand out mindsets. its the death of concepts like earning a living, being useful, industrious.

 

[AM]

I don’t doubt that Boyle streets plan all along was just to rely on that backdrop gift but just pay the money OEG. It’s a terrible look shaking down a charity, especially given the current climate around homelessness in the city. OEG got what they wanted and 5M is nothing to them. Pay the money and then never take another call from Boyle street again and just be done with them.

Really? They need to execute their agreement. You really want to punish a guy who has paid you millions of dollars. If it’s me, I’d have the proof. Easy to get too just make a 100k donation that is supposed to go to the building.

 

[Heavy Dee]

5M for the Boyle Street Coop lot as well which prior to Ice District investment sure wasn't worth that.

I continue to wonder about Boyle Street Coop's own funding and fundraising and how much of it they were earmarking to their primary project, and/or how much of their funding/priority was directed at other projects and not their main missive. Strikes me as odd that an entity was trying to establish and further several other endeavors when their flagship dream was going down.

Yep and I think thats the rub with OEG. I read that the design was too extravagant for their purpose and that much of the fundraising was funneled into their endowment fund rather than the reno.

I don't know if there is a board that runs them or if it was done at the admin level.

 

[Behind Enemy Lines]

This gets into a rabbit hole that I really prefer not to get into too much here whereby theres intersectionality between belief systems of potential donors and ongoing changing belief systems of the hands on the ground orgs. To the point where would be philanthropists no longer feel enthralled making the same donations for that which they do not believe in as pursuits.

This is the biggest crisis faced and the community orgs caught up in their own hubris about what they service and why. In the end you end up with some Community orgs providing specific service that is no longer supported by the general public either in dollar or in mind.

The rising demand in services is a whole other bowl. One that wasn't helped by 2K/mth free money per month being doled out in this country during pandemic as if this was a welfare state. The calamity from that persists as it does in such states where able bodied people are just handed money to sit on their ass. Thats the easiest way to create dependence and free hand out mindsets. its the death of concepts like earning a living, being useful, industrious.

For purposes of this discussion stated before it comes down to a non-enforceable donor agreement between a deeply established charitable organization with more than fifty years working in this community space and a corporate entity that put conditions around an additional seven figure philanthropic investment locked within a real estate scheme for re-development.

The charitable organization is reliant on reputation, public trust to 'stay in business' of helping its stated mission and goals to support foundational needs of Edmonton's most vulnerable populations. That they are required by law to annually report on their financial management of donor, corporate investment and grant dollars suggest they maintain public trust. An Annual Report also captures the results, outputs and outcomes of service delivery.

The money involved pales in comparison to the public subsidy to build a hockey rink and the big play which is real estate gentrification of an urban area. Hell, the $5 millions is only $3 million less than the ten year City Oilers marketing/branding 'partnership' which the OEG was able to further leverage out in the hundreds of million dollar public dollar arena build.

 

[Behind Enemy Lines]

Yep and I think thats the rub with OEG. I read that the design was too extravagant for their purpose and that much of the fundraising was funneled into their endowment fund rather than the reno.

I don't know if there is a board that runs them or if it was done at the admin level.

Interesting. Not unlike the world class hockey rink that was built yet had major basic operational issues after opening like upper level access and not enough washrooms. A design that included a big corporate branded gathering space to help sell beer and capture more bucks. But a city's most vulnerable population shouldn't have or don't deserve nice things. In both cases, I would imagine the building life cycle is likely 30 years+ but we know the tendency for pro sports this call for new builds can often be significantly shorter while community infrastructure must hold out longer.

The charity would have a board of directors who set the organization's strategic direction and provide oversight to its CEO.

 

[AM]

Going to court to get a disagreement settled isn't an act of greed or evil.

Agreed, since when is looking for justice a bad thing.

 

[BudBundy]

They are in breach. That's for certain

Makes Katz look dumb at the same time. He could wipe his ass and blow his nose for five million

Nothing comes free in this world though

A contract is a contract. That's it. It's black and white

How can you say they are in breach when the claim against them is only that “they didn’t fundraiser hard enough.” Who’s to say what “hard enough” or “try enough” is?? The guy who has to pay? If that guy gets to decide, he’ll never pay. It’s not like fundraising is easy these days. If the Katz group was dumb enough to pledge the backstop, they better be willing to hand it over. My information on the whole thing is obviously limited to what is in the article, but that’s my take on it with what has been presented.

 

[Kirby]

There were articles on the predicament in the fall. Its not even new news.

'Not financially viable': Boyle Street to close downtown Edmonton location when lease expires

The social service agency said that it was not "financially viable" to extend the lease at its downtown location which will close Sept. 30.

edmontonjournal.com

Boyle Street COOP, like some other community orgs get the most benefit of doubt and sweetheart leases from the City to cater to mandate.

Boyle Street hasn't itself been upfront about how a 1 Dollar lease is "not financially viable" but a peek at operations and annual reports might lend light on that. As with many community orgs Boyle Street has an expansionist mindset instead of tending to what their original mandate is. for instance wanting to set up services in Old Strathcona.

This article from 2022 is also interesting as it denotes that 75% of funding was already had at that time.

Edmonton’s Boyle Street Community Services reveals name of new facility, 75% of fundraising goal reached - Edmonton | Globalnews.ca

Boyle Street Community Services is close to achieving its fundraising goal for its new facility, and says it's been able to get this far without any government funding.

globalnews.ca

Given the stated present shortfall it seems as if funding for the new facility came to a standstill since then. Presumably as Boyle Street was banking on just getting the 5M and/or the new facility. Devil is in the details as others mentioned, and we don't have all of those.

In anycase we're speaking of an operation that is now "homeless" ironically serving the homeless and not disclosing how the Coop got that way. To consider that Boyle Street Coop itself is not fulfilling its own mandate by not even having the former facility is not unreasonable. Indeed one can even think the Coop leveraged this situation assuming they would have the new facility and curry public favor to get it. But irresponsible actions imo as with respect to Boyle Streets stated mandates. Which they have now compromised delivering.

The most unabashed shame in this could be that Boyle Street Coop was banking on shame landing on Katz, and while skirting their own responsibilities. Not saying its the case. But its a possibility.

I won't wade to deep into this topic as it's hard to get a feel of what exactly is happening without knowing all the details, but I will make a comment on how a $1 lease could be financially unviable for an organization.

While the lease for occupying the premises may only be $1, typically these type of agreements come with substantially different terms for operating, repair, and maintenance costs than your standard market lease agreement which can place the entire burden on the tenant and absolves the landlord from such costs. So while the lease may only cost $1/annually, the cost of repair, maintenance, and operating costs could easily exceed $100K/annually, especially when considering the state of the building (this is not some new modern building designed for life in 2024). There are other non-standard terms that can be tacked onto these type of agreements that can also place financial burden on the tenant even after surrender of the premises back to the landlord.

On the surface it sounds absurd that a $1 lease is financially unviable, but the reality is usually very different, as the other costs can be very hard to manage that are not quantified in the lease.

 

[alanschu]

While the lease for occupying the premises may only be $1, typically these type of agreements come with substantially different terms for operating, repair, and maintenance costs than your standard market lease agreement which can place the entire burden on the tenant and absolves the landlord from such costs. So while the lease may only cost $1/annually, the cost of repair, maintenance, and operating costs could easily exceed $100K/annually, especially when considering the state of the building (this is not some new modern building designed for life in 2024). There are other non-standard terms that can be tacked onto these type of agreements that can also place financial burden on the tenant even after surrender of the premises back to the landlord.

There's also no guarantee that extending the lease does not come with a change in the terms of the lease. I have extended several rental leases in my day. Every single time the cost to me went up. I couldn't say if the OEG wasn't disinclined to maintain a $1/yr lease to Boyle Street because there are development plans that they want to be put in motion and having a homeless shelter set up interferes with that.

 

[Ol' Jase]

It's almost as if Katz isn't profiting millions off of a publicly funded arena

Publically owned arena.

The City of Edmonton owns Rogers Place and the land that it was built on.

 

[Sra1974]

This gets into a rabbit hole that I really prefer not to get into too much here whereby theres intersectionality between belief systems of potential donors and ongoing changing belief systems of the hands on the ground orgs. To the point where would be philanthropists no longer feel enthralled making the same donations for that which they do not believe in as pursuits.

This is the biggest crisis faced and the community orgs caught up in their own hubris about what they service and why. In the end you end up with some Community orgs providing specific service that is no longer supported by the general public either in dollar or in mind.

The rising demand in services is a whole other bowl. One that wasn't helped by 2K/mth free money per month being doled out in this country during pandemic as if this was a welfare state. The calamity from that persists as it does in such states where able bodied people are just handed money to sit on their ass. Thats the easiest way to create dependence and free hand out mindsets. its the death of concepts like earning a living, being useful, industrious.

Your response may have some truth to it in terms of aligning belief systems but I don’t think it’s a major factor here in the uphill climb places like Boyle street face to fundraiser for something like this in this climate.

First of all giving is often counter cyclical. When the need is the greatest for things like support for this in poverty is also when people feel less secure to give. With rising interest rates, increased cost of living and a feeling of economic stability people are not inclined to increase their donations, which is what you need to fundraiser for capital - more on that in a bit. Those same economic factors are also a massive reason for why the demand for support for those living below the poverty line is the greatest.

So with the above taken into account I can also tell you that fundraising for poverty support is hard, super, super hard. I know it firsthand from some work I do as a board member. Fundraising is hard in general, but places like the Stollery or the Cancer Society have a leg up. Everyone knows someone, everyone feels the randomness of those illnesses striking, watches the stories and buys the lotto ticket or writes the cheque. They don’t question if the newest gamma knife is the best purchase(just using that as an example) they just give. Poverty is different, depending on your life circumstances you may never ever actually have a relationship with someone who is unhoused, although you almost certainly do with someone who lives in poverty - you just may not know it. Judgement also gets passed by many - they made bad choices, they are welfare bums, would never happen to me, just a druggie, and judgement gets passed in the support needed - just get a job, mandatory addiction treatment, etc. Every dollar is hard fought for.

Now onto fundraising for capital, it is also a tricky dance, regardless of the sector. If you go to an existing donor and say I need money for a new building you need new money from them. If they give you $500 today which funds your operations and say that’s great here’s $300 for your new building and here’s $200 for the rest of what I normally donate you have an immediate problem. So Boyle Street went big game hunting, they looked for deep pockets and big organizations who didn’t normally fund them to kick in. They were super persistent, I know it for a fact and were using some very credible names in the community. They didn’t do a massive community drive for I think the reasons I have stated - they may not have believed they could motivate the community at large and just feared they would steal dollars they need to keep the lights on and pay their staff.

Did they always bank in the $5 million? Maybe so and they have not been perfect here. The Katz group may even have a legal argument here, I don’t really know. I just know it’s a bad situation no matter how we look at this, and a black eye for Katz as the billionaire never comes out of his well, but I suspect it’s not all that helpful for Boyle either.

TLDR - fundraising is hard, even harder for poverty based organizations and it’s a bad situation.

 

[9GWG9]

A bad look. They claim there wasn’t enough effort to raise funds. More likely people are not donating as much these days.

 

[Bobieque]

Your response may have some truth to it in terms of aligning belief systems but I don’t think it’s a major factor here in the uphill climb places like Boyle street face to fundraiser for something like this in this climate.

First of all giving is often counter cyclical. When the need is the greatest for things like support for this in poverty is also when people feel less secure to give. With rising interest rates, increased cost of living and a feeling of economic stability people are not inclined to increase their donations, which is what you need to fundraiser for capital - more on that in a bit. Those same economic factors are also a massive reason for why the demand for support for those living below the poverty line is the greatest.

So with the above taken into account I can also tell you that fundraising for poverty support is hard, super, super hard. I know it firsthand from some work I do as a board member. Fundraising is hard in general, but places like the Stollery or the Cancer Society have a leg up. Everyone knows someone, everyone feels the randomness of those illnesses striking, watches the stories and buys the lotto ticket or writes the cheque. They don’t question if the newest gamma knife is the best purchase(just using that as an example) they just give. Poverty is different, depending on your life circumstances you may never ever actually have a relationship with someone who is unhoused, although you almost certainly do with someone who lives in poverty - you just may not know it. Judgement also gets passed by many - they made bad choices, they are welfare bums, would never happen to me, just a druggie, and judgement gets passed in the support needed - just get a job, mandatory addiction treatment, etc. Every dollar is hard fought for.

Now onto fundraising for capital, it is also a tricky dance, regardless of the sector. If you go to an existing donor and say I need money for a new building you need new money from them. If they give you $500 today which funds your operations and say that’s great here’s $300 for your new building and here’s $200 for the rest of what I normally donate you have an immediate problem. So Boyle Street went big game hunting, they looked for deep pockets and big organizations who didn’t normally fund them to kick in. They were super persistent, I know it for a fact and were using some very credible names in the community. They didn’t do a massive community drive for I think the reasons I have stated - they may not have believed they could motivate the community at large and just feared they would steal dollars they need to keep the lights on and pay their staff.

Did they always bank in the $5 million? Maybe so and they have not been perfect here. The Katz group may even have a legal argument here, I don’t really know. I just know it’s a bad situation no matter how we look at this, and a black eye for Katz as the billionaire never comes out of his well, but I suspect it’s not all that helpful for Boyle either.

TLDR - fundraising is hard, even harder for poverty based organizations and it’s a bad situation.

Great, informative, and well thought out post. Very much appreciate the effort that went into that. A ’like’ was not enough for this. Thanks.

 

[Hockeylife2018]

A bad look. They claim there wasn’t enough effort to raise funds. More likely people are not donating as much these days.

Should be a slam dunk case either way, either Katz has the proof they redirected resources away from the fundraiser when they realized Katz would step up, or I don't think Katz group would be even taking this to court...only time will tell I guess

 

[Heavy Dee]

Conditional charity is not charity. Katz group made this offer because they wanted the land and relocation of a social service stream they desired undesirable. It's been there for 25 years. They "donated" a relocation

Everything Katz does in Edmonton is about land, and it always has been. People need to wake up.

Nobody raises 7.3 million to address homelessness without a herculean level of trying, and the goal was 8.5. Katz group is going to argue in court Boyle didn't try hard enough

When Boyle asked for an extension on the lease, Katz group made the extension conditional on the 5 million. They were already looking for an out because they got what they wanted, the land, and control of relocation

Boyle can't win the legal battle, but Katz can spend 4 million on lawyers and still profit

Yah he is certainly a bit greasy.

Anyone remember when he promised to build the Golden Bears and Pandas a new rink if he was able to buy the Oilers? I do.

 

[AM]

Interesting. Not unlike the world class hockey rink that was built yet had major basic operational issues after opening like upper level access and not enough washrooms. A design that included a big corporate branded gathering space to help sell beer and capture more bucks. But a city's most vulnerable population shouldn't have or don't deserve nice things. In both cases, I would imagine the building life cycle is likely 30 years+ but we know the tendency for pro sports this call for new builds can often be significantly shorter while community infrastructure must hold out longer.

The charity would have a board of directors who set the organization's strategic direction and provide oversight to its CEO.

Yes they deserve the nicest thing possible. Which is one of the best levels of opportunity in the world. Now if you mean other peoples labour, why nobody deserves that because all nice people don’t believe in slavery.

 

[AM]

I was told about this situation brewing last fall. Unfortunate and embarrassing that it has become public especially with the hard reality it relates to an arena build and gentrification strategy which was massively publicly subsidized all with a primary objective to maximum profitability.

Capital fundraising for charitable organizations is difficult at the best of times. Doing so through covid and post covid recovery amplifies the challenge exponentially with even more competition for philanthropic dollars. It is exceedingly difficult if you can't secure federal and provincial funding support which is noted in the media report. This fundraising work specifically requires significant resources in both time and financial cost cultivated over years. Personally I can't see how the charity won't be able to defend its conditional requirements being met.

Exceedingly poor judgement by a private led Gatsby who successfully sold off his core business for multiple billions to pivot into a sports and entertainment conglomerate all predicated upon a stalking horse bid to buy the Oilers; leverage public sentiment and emotion to get a new profit centre NHL and concert venue built on massive public subsidy that extended so deeply it included a long-term civic ad buy requirement. Katz has ridden the team valuation into a billion dollar asset; part of a billion dollar dividend from two lucrative NHL consortia expansions; and as one of the prime developer of an urban regentrification play. All over $5 million for a deeply established community organization dedicated to helping Edmonton's most vulnerable populations try to endure and survive. Bad faith.

Yes, we get it that the charity thinks they deserves to cash cheques they haven’t earned. It’s a top up clause and funny enough the amount to be topped up is the maximum.