Did the OEG con the City of Edmonton?

[CantHaveTkachev]

Nenshi in Calgary is playing hardball for many of the reasons expressed in the original post.

http://www.660news.com/2017/06/07/brian-burke-slams-city-calgarynext-nenshi-calls-part-script/



Edmonton didn't really negotiate. No upfront contribution from Katz, separate marketing agreement, bait and switch on community rink, development on Katz real estate properties, side deal for new City of Edmonton tower.

Basically took all the risk and no financial reward.

tough to compare the situation in Calgary to Edmonton

Calgary doesn't need a downtown revitalization

 

[Crusty Quinn]

I think, from an economic perspective, the hope is that a nicer downtown with better offices, residences, and amenities will eventually attract real, external investment (i.e. jobs)

What we've seen so far:
- Commercially: Consolidation (Stantec), and lateral movement for companies that want/can afford space in the new buildings. But their old spaces aren't necessarily getting filled (high vacancy rate).
- Retail: Some new restaurants, bars etc. popping up. But the people filling up the new places used to go somewhere else so the net impact is nil.
- Residential: This one is still panning out, but there's a lot of new inventory coming to downtown. Eventually, vacancy rates will rise and average rent prices will drop. Not necessarily a bad thing as tenants will be able to rent more affordably.

From the above, I don't see much economic growth for the city as a whole as a result of the arena. But if you ask me whether I want more offices, restaurants, and condos downtown instead of in some random suburb on 256 St and 176 Ave, then I'll take that every day of the week and I'm sure the City would too.

 

[BoldNewLettuce]

I didn't read the entire thread but I find development is always shady.

Just looking at Katz you can tell he is a weasel.

But I find there is probably some validity in how. They are spinning it as a model for public private partnership in building a "district" and how the NHL arenas can be development "boosters" to larger projects.

Personally I like the fact that in the face of all the "they don't deserve McDavid" and "relocate the franchise" sentiments you get from ******** Internet fans and legit media sources....that you can say the City of Edmonton built the greatest arena on the planet. It seems more legitimate somehow with the taxpayers involved.

Plus it's a small amount of insurance that the public funds somehwat guarantee the Oilers won't be moved or Gary will threaten future arena deals in other cities. Not that the Oilers would ever be likely to move given the history there.

 

[Speed220DChalavan]

I'd wonder what goes into that revenue that Vegas was talking about. If it is just season tickets as of now, then that could be a sliver of the total picture. I know a Forbes valuation of franchises in 2016, we were 14th in valuations, and our team's income was a fraction of the big boys at the top.

Forbes doesn't have access to the private financial statements of the OEG, or any other team. They are estimates and should be taken with great caution.

The Oilers being a top 5 revenue team is entirely plausible. High ticket prices, increased and sold out luxury boxes and premium tickets, strong corporate partnerships, strong TV ratings, etc.

They'll be making bank when the CAD currency recovers.

I don't doubt the OEG could have contributed significantly more towards the new arena project. Why they didn't?

They didn't have to. Your elected officials gave them every concession they asked for and more.

 

[joestevens29]

Katz got a good deal, but at the same time him been successful business man has been what's helped make things look real good for him. If Northlands was running this, we'd be talking about why did we build something that is losing money.

 

[ThePhoenixx]

This is the logic every owner in North America uses to pry out every last dollar from taxpayers.

So you have already picked a side, have an agenda per se. Here to trash Katz and call everyone from the city stupid,


Slow day I guess. Perhaps you could try a phone app game instead?

 

[ThePhoenixx]

I would say if you sincerely believe, like truly sincerely believe, that the OEG conned the city, might be best to withhold dollars from the OEG and boycott OEG related things.

I agree, but it will be very hard as OEG seems to have a piece of almost everything now.

The posters best plan to accomplish this is to leave the city. Move out East.

 

[Cawz]

Forbes doesn't have access to the private financial statements of the OEG, or any other team. They are estimates and should be taken with great caution.

The Oilers being a top 5 revenue team is entirely plausible.

If Forbes estimates of #14 should be taken with great caution, your estimate of #5 should be taken with a sprint to a nuclear fallout shelter, and hunkering in the bunker for a few decades.

 

[Soundwave]

Good for the Oilers and I'm glad they got a great deal, good for Katz but the OP's point is misleading.

They are a top ticket revenue team *now* with Connor McDavid and a new arena and a playoff caliber team. No ****. Why wouldn't they be? But they didn't know at the time that McLottery was going to happen.

And the Vegas owner is only using ticket revenue as his barometer for that as well.

 

[Ol' Jase]

Opportunity cost. The dollars the City allocated towards this new arena could for example, been allocated towards construction projects that would benefit the public on a larger scale (LRT, Rec Centres, Yellowhead, etc.) and created the same indirect jobs you speak of.

I don't disagree Edmonton needed a new arena, and downtown was an ideal place for it. The City officials however brokered a deal that is undoubtedly one sided for the private investor. The taxpayers got taken to the cleaners.

In many ways, the responses in this thread from many are what I expected. Unsophisticated fanboys. Especially when the Oilers have developed goodwill after a couple of good weeks in the spring. You can sense how powerful the Oilers are in Edmonton. How dare does one question them and the way they conduct business?

You're not remotely providing anything, not a damn word, to back up your assertions that EDMONTON is going through everything you say it is. You have quoted studies that have no relation to Edmonton at all, quoted old and outdated articles that do not encompass the context of the arena and it's affect on the downtown revitalization, use comparisons like Calgary's arena outlook (which if you understood the first thing about the differences in the two situations, you would know the is complete folly), and are completely ignoring the extreme adverse economic effects of urban sprawl.

Then, after all this, you accuse everyone of being unsophisticated fanboys.

Here's the truth. You want to discuss a topic you have limited knowledge of. Acting surprised that you are being called out on all of this doesn't exactly scream objectivity on the subject.

 

[Speed220DChalavan]

You're not remotely providing anything, not a damn word, to back up your assertions that EDMONTON is going through everything you say it is. You have quoted studies that have no relation to Edmonton at all, quoted old and outdated articles that do not encompass the context of the arena and it's affect on the downtown revitalization, use comparisons like Calgary's arena outlook (which if you understood the first thing about the differences in the two situations, you would know the is complete folly), and are completely ignoring the extreme adverse economic effects of urban sprawl.

Where is any of your evidence that:

a. Edmonton is somehow different from other cities in terms of arena's leading to economic development?

b. There has been new investment in the city because of the new arena that has lead to job creation?

c. CRL leads to new property tax revenues versus re-distribution.

Also, explain why Edmonton has a near 18% commercial office vacancy right now? I thought a new arena was going to spur economic development?

Don't kid yourself.

We were told some fantastic lies.

And the public bought it up while distributing a large cheque to the OEG.

 

[doulos]

The Oilers are not in Edmonton because it makes any kind of financial sense.

They are in Edmonton because it's one of the long term pieces of history in town and something that people of the City are proud of and enjoy.

You don't buy an RV because it makes financial sense. You do it because it's fun and, depending on it's size, as a sort of status symbol.

A professional sports team is basically the same thing for a city.

 

[Paralyzer]

Where is any of your evidence that:

a. Edmonton is somehow different from other cities in terms of arena's leading to economic development?

b. There has been new investment in the city because of the new arena that has lead to job creation?

c. CRL leads to new property tax revenues versus re-distribution.

Also, explain why Edmonton has a near 18% commercial office vacancy right now? I thought a new arena was going to spur economic development?

Don't kid yourself.

We were told some fantastic lies.

And the public bought it up while distributing a large cheque to the OEG.

At this point you are digging a hole deep enough to reach to China with the amount of 'so called' info. People already gave you why it wasn't and instead of giving a better solution to the problem you are just rehashing the same stuff over and over again. This is going no where. Mods, lock it up please...

 

[Ol' Jase]

Where is any of your evidence that:

a. Edmonton is somehow different from other cities in terms of arena's leading to economic development?

b. There has been new investment in the city because of the new arena that has lead to job creation?

c. CRL leads to new property tax revenues versus re-distribution.

Also, explain why Edmonton has a near 18% commercial office vacancy right now? I thought a new arena was going to spur economic development?

Don't kid yourself.

We were told some fantastic lies.

And the public bought it up while distributing a large cheque to the OEG.

So, you're going to make the assertions and then instead of actually producing a single digit or letter from raw data yourself to back up your assertions, you're just going to insult others and then make them go to lengths to do your leg work for you.

Exactly as I thought, you don't have the first clue about the subject you are discussing and are just regurgitating others talking points.

Really "sophisticated" stuff.

 

[Fixed to Ruin]

Out of all the infrastructure projects that the City of Edmonton has undertaken in the last decade, this is probably the most successful one.

Are they still trying to figure out the LRT metro line?

This thread is much to do about nothing.

 

[Speed220DChalavan]

So, you're going to make the assertions and then instead of actually producing a single digit or letter from raw data yourself to back up your assertions, you're just going to insult others and then make them go to lengths to do your leg work for you.

Exactly as I thought, you don't have the first clue about the subject you are discussing and are just regurgitating others talking points.

Really "sophisticated" stuff.

I provided the data:

1. Vacancy rates - one of the more important metrics - illustrates a grave area of concern. Likewise, condo prices have been falling in Edmonton. The increase in supply are both factors that contributed to this.

2. No major companies (public or private) that have moved to the City since the arrival of the new arena. It's almost as if O&G, not new arenas, directly tie into the economic vibrancy?

This has now become a secondary discussion point.

The original premise is the OEG exhausted taxpayer funds for their private benefits. The taxpayer is left with intangible benefits.

 

[Ol' Jase]

I provided the data:

1. Vacancy rates - one of the more important metrics - illustrates a grave area of concern. Likewise, condo prices have been falling in Edmonton. The increase in supply are both factors that contributed to this.

2. No major companies (public or private) that have moved to the City since the arrival of the new arena. It's almost as if O&G, not new arenas, directly tie into the economic vibrancy?

This has now become a secondary discussion point.

The original premise is the OEG exhausted taxpayer funds for their private benefits. The taxpayer is left with intangible benefits.

If you are actually suggesting that current commercial vacancy rates and condo pricing fluctuation (which you couldn't be more wrong about on this point, by the way) are primarily due to the construction and subsequent "deal" that is Rogers, you know less about this subject than a first year economic student.

Oil and gas are economic drivers in Edmonton? Really? Wow! What news!!

 

[Paralyzer]

If you are actually suggesting that current commercial vacancy rates and condo pricing fluctuation (which you couldn't be more wrong about on this point, by the way) are primarily due to the construction and subsequent "deal" that is Rogers, you know less about this subject than a first year economic student.

Oil and gas are economic drivers in Edmonton? Really? Wow! What news!!

What? We have Oil? Color me shocked.

 

[Speed220DChalavan]

If you are actually suggesting that current commercial vacancy rates and condo pricing fluctuation (which you couldn't be more wrong about on this point, by the way) are primarily due to the construction and subsequent "deal" that is Rogers, you know less about this subject than a first year economic student.

Commercial and residential vacancy rates and prices are fluctuating in the wrong direction due to the following:

a. Influx of supply into the market - a large number of commercial office towers (Enbridge Centre, Stantec Tower, City of Edmonton Tower) and residential (Greyhound site, Encore, Ultima, JW Marriott condos, Stantec residential).

A lot of inventory that isn't absorbed or just transferred from one part of the city to another.

b. Health of the economy - O&G industry decline. We were lead to believe the new arena would spur economic development, would be a catalyst, etc. Nothing has come to fruition to suggest this was the case.

 

[CantHaveTkachev]

Where is any of your evidence that:

a. Edmonton is somehow different from other cities in terms of arena's leading to economic development?

b. There has been new investment in the city because of the new arena that has lead to job creation?

c. CRL leads to new property tax revenues versus re-distribution.

Also, explain why Edmonton has a near 18% commercial office vacancy right now? I thought a new arena was going to spur economic development?

Don't kid yourself.

We were told some fantastic lies.

And the public bought it up while distributing a large cheque to the OEG.

But you are here to expose some truths about the projects right?

please show hard evidence with numbers with how much the "taxpayer" is paying for this new arena

 

[Speed220DChalavan]

But you are here to expose some truths about the projects right?

please show hard evidence with numbers with how much the "taxpayer" is paying for this new arena

Of the $613.7M, Katz group contributed $19.7M.

The Katz Group is contributing $112.8M less $20M marketing agreement with the city =$92.8M as rent over 35 years. This works out to be approximately net rent of $2.65M/year. Sweetheart deal. Doesn't even consider present value.

Are there any tangible benefits, for the taxpayer?

This isn't an insignificant amount of money. Could fund a large majority of an LRT leg.

As mentioned countless times, I don't think it was necessarily wrong to contribute with public financing. Just not to the extent the city council did.

The OEG will receive an unproportionate value of financial benefits just because nobody at City Hall challenged them enough.

That's a shame, and your children will be paying for it in the form of opportunity cost.

You can make a case for intangible benefits, but not economic. These are the type of arguments used in every city in North America when taxpayer funds are lobbied for to finance a private venture.

What's next, the 9 game a year stadium in Regina (which directly will increase Regina taxpayers in increased property tax levies) will lead to economic benefits? That's how the project was sold as to the public.

http://leaderpost.com/news/local-news/community-facility-or-football-stadium

 

[Cawz]

I provided the data:

1. Vacancy rates - one of the more important metrics

Well, Calgary has a much higher vacancy rate, so by your logical metric, not building a new arena would be a worse option, right? Because stats etc...

 

[Vanqu1sh]

got a sweet rink

 

[Marc08]

Of the $613.7M, Katz group contributed $19.7M.

The Katz Group is contributing $112.8M less $20M marketing agreement with the city =$92.8M as rent over 35 years. This works out to be approximately net rent of $2.65M/year. Sweetheart deal. Doesn't even consider present value.

Are there any tangible benefits, for the taxpayer?

This isn't an insignificant amount of money. Could fund a large majority of an LRT leg.

As mentioned countless times, I don't think it was necessarily wrong to contribute with public financing. Just not to the extent the city council did.

The OEG will receive an unproportionate value of financial benefits just because nobody at City Hall challenged them enough.

That's a shame, and your children will be paying for it in the form of opportunity cost.

You can make a case for intangible benefits, but not economic. These are the type of arguments used in every city in North America when taxpayer funds are lobbied for to finance a private venture.

What's next, the 9 game a year stadium in Regina (which directly will increase Regina taxpayers in increased property tax levies) will lead to economic benefits? That's how the project was sold as to the public.

http://leaderpost.com/news/local-news/community-facility-or-football-stadium

You sound like the Devil's advocate. Keep going, please.

 

[Cawz]

Where is any of your evidence that:

a. Edmonton is somehow different from other cities in terms of arena's leading to economic development?

b. There has been new investment in the city because of the new arena that has lead to job creation?

c. CRL leads to new property tax revenues versus re-distribution.

Where is your evidence that:

a. The new arena wont directly create long-term permanent jobs (your words). I'm talking about the Edmonton arena, so a random article doesnt work

b. The Oilers are 5th in the league in revenue when Forbes has them at 14

c. There was a better viable option that would work for all parties

You started the thread, so you should be the one to provide your back-up.

Edit: Actually, for your a and b, I already answered with a comparison to Calgary and a link to a new development. For c, what are the tax rates for comparison? Can you quantify that its redistribution? Tax rates for new DT developments are usually higher.