Did the OEG con the City of Edmonton?

[JariCurry]

Conned no ... out negotiated yes! The trip to Seattle by Katz, Lowe, LaForge and Co was smart if not slimy and has always left a sour taste in my mouth.

Looking back it's hard to believe the city(taxpayers) got bent over so bad... could of told Katz to pound sand and we (taxpayers) would have gotten a much better deal...

If Katz pulled out of Edmonton, another team or expansion franchise deal along with a better arena deal would of been in place within a year.

Everybody knows Edm is one of the top 5 markets in the league.

 

[Speed220DChalavan]

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

Common sense.

We should be seeing an influx of companies migrating to the downtown core by now. Instead, we're seeing negative absorption for 9 straight quarters.

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

http://v1.theglobeandmail.com/v5/content/pdf/NHLweb.pdf

8th in revenues a decade ago. Laforge on record remarked the Oilers paid into revenue sharing every year (indicative of top 10). Very plausible to be top 5, given ticket prices in revenues have only increased exponentially since that time and the new area emphasizes on premium tickets and luxury boxes.

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

When taxpayer funds are to be used, the onus is on the party requesting funds to demonstrate there will be public benefit.

You can make an argument for intangible benefits (although the large majority of the public cannot afford Oilers tickets - hence access is an issue), but not a case for an economic one.

The better viable option would to be continue to call Katz' empty threats as a bluff, negotiate hard for capital infusion, avoid unnecessary concessions (2M/year marketing agreement). Much like Calgary is doing right now.

I think those with superior financial backgrounds/education would agree it's a deal heavily lopsided to the OEG. And i don't think too many people would disagree with that.

 

[trick91]

i have owned a condo on jasper ave for almost 10 years now, and not once has my value decreased.

 

[Cawz]

Common sense.

We should be seeing an influx of companies migrating to the downtown core by now. Instead, we're seeing negative absorption for 9 straight quarters.




http://www.theglobeandmail.com/servl...nhl19/BNStory/

8th in revenues a decade ago. Laforge on record remarked the Oilers paid into revenue sharing every year (indicative of top 10). Very plausible to be top 5, given ticket prices in revenues have only increased exponentially since that time and the new area emphasizes on premium tickets and luxury boxes.




When taxpayer funds are to be used, the onus is on the party requesting funds to demonstrate there will be public benefit.

You can make an argument for intangible benefits (although the large majority of the public cannot afford Oilers tickets - hence access is an issue), but not a case for an economic one.

The better viable option would to be continue to call Katz' empty threats as a bluff, negotiate hard for capital infusion, avoid unnecessary concessions (2M/year marketing agreement). Much like Calgary is doing right now.

I think those with superior financial backgrounds/education would agree it's a deal heavily lopsided to the OEG. And i don't think too many people would disagree with that.

#1, I gave you a link earlier. And if you compare to Calgary, Edmonton is weathering the economic storm much better.

#2, your link doesn’t work, the dollar was much higher 8 years ago and you’re using assumptions. Not a good thing to base your argument on.

#3, Yeah, they used their leverage and the city got DT revitalization out of it. The leverage was the hockey team and the fact that nothing else was going to spur the DT revit because you need an anchor to start it off (ask someone with superior real estate backgrounds/education if you need it explained how that works, but in real estate negotiations, you sometimes need to make concessions to your anchor tenant in order to spur the rest of the dev).

 

[CantHaveTkachev]

Conned no ... out negotiated yes! The trip to Seattle by Katz, Lowe, LaForge and Co was smart if not slimy and has always left a sour taste in my mouth.

Looking back it's hard to believe the city(taxpayers) got bent over so bad... could of told Katz to pound sand and we (taxpayers) would have gotten a much better deal...

If Katz pulled out of Edmonton, another team or expansion franchise deal along with a better arena deal would of been in place within a year.

Everybody knows Edm is one of the top 5 markets in the league.

and play where? no owner is coming to Edmonton and playing in an old arena where the owner only gets hockey-related revenue

owners aren't stupid

and how much have your taxes increased since the Arena began construction?

 

[Speed220DChalavan]

#1, I gave you a link earlier. And if you compare to Calgary, Edmonton is weathering the economic storm much better.

1. There is an increase in long term jobs in downtown Edmonton
2. These people need places to work in downtown
3. The downtown office vacancy rate will decrease

since this has clearly not happened-->there is no substantial increase of long term downtown jobs.

Or to be specific, the rate that additional office space has been added downtown has far exceeded the rate that jobs are added to downtown.

Hence 9 straight quarters of negative absorption and a vacancy rate now touching an ungodly 18%.

#2, your link doesn’t work, the dollar was much higher 8 years ago and you’re using assumptions. Not a good thing to base your argument on.

It works now.

CAD dollar is lower now, but the source of revenues has increased. No doubt about it - top 5 is very plausible.

#3, Yeah, they used their leverage and the city got DT revitalization out of it. The leverage was the hockey team and the fact that nothing else was going to spur the DT revit because you need an anchor to start it off .

This is nonsense. There were many many projects in progress well before the arena district. Downtown Edmonton was growing - then the price of oil collapsed and here we are. An influx of inventory on the market that cannot be absorbed or will be absorbed anytime soon.

The arena was never going to be a catalyst or bring economic benefits. It's a nice luxury, one that primarily financially benefits the OEG, but arenas don't spur economic development.

They just don't.

 

[Speed220DChalavan]

and how much have your taxes increased since the Arena began construction?

Someone teach this guy something about opportunity cost.

 

[CantHaveTkachev]

Someone teach this guy something about opportunity cost.

since your the smartest guy in the thread, I thought I'd let you do that

btw, ever find that article denouncing the Arena since it's been open?

 

[BoldNewLettuce]

Someone teach this guy something about opportunity cost.

what would you rather spend money on? hospitals? schools?

 

[Cawz]

1. There is an increase in long term jobs in downtown Edmonton
2. These people need places to work in downtown
3. The downtown office vacancy rate will decrease

since this has clearly not happened-->there is no substantial increase of long term downtown jobs.

Or to be specific, the rate that additional office space has been added downtown has far exceeded the rate that jobs are added to downtown.

Hence 9 straight quarters of negative absorption and a vacancy rate now touching an ungodly 18%.



It works now.

CAD dollar is lower now, but the source of revenues has increased. No doubt about it - top 5 is very plausible.



This is nonsense. There were many many projects in progress well before the arena district. Downtown Edmonton was growing - then the price of oil collapsed and here we are. An influx of inventory on the market that cannot be absorbed or will be absorbed anytime soon.

The arena was never going to be a catalyst or bring economic benefits. It's a nice luxury, one that primarily financially benefits the OEG, but arenas don't spur economic development.

They just don't.

I've already said that, if you compare to Calgary, Edmonton is weathering the storm better. So compared to Calgary, Edmonton is doing much better. So the whole "18%" is bs since you should compare it to 25% here in Calgary. You are using the fact of the recession to justify your numbers and comparing it to a fantasy situation of no recession, when you should compare it to the other similar city which is going through the same recession.

Your link only shows gate revenue. No doubt 14 is more plausible that top 5. At least 14 has some backup to it.

Did you read my link about the development close to the Ice District?

 

[Aceboogie]

On a whole it was a con. However I am happy my tax money went to this. But I know thousands of families are worse off for it

 

[awesomo]

im not gonna lie this is a debate better gone through with connect2edmonton forum.

you will find replacement on there, im sure he'll have a good debate with you.

they have threads dedicated to business/real estate

 

[Speed220DChalavan]

I've already said that, if you compare to Calgary, Edmonton is weathering the storm better. So compared to Calgary, Edmonton is doing much better. So the whole "18%" is bs since you should compare it to 25% here in Calgary. You are using the fact of the recession to justify your numbers and comparing it to a fantasy situation of no recession, when you should compare it to the other similar city which is going through the same recession.

It's absurd to compare Edmonton and Calgary downtown vacancy situations given the volume of head offices in Calgary. Layoffs have been aggressively hitting the office/professional jobs, so of course you would expect a higher proportion of downtown negative absorption in Calgary.

Your link only shows gate revenue. No doubt 14 is more plausible that top 5. At least 14 has some backup to it.

What backup? Forbes, who have no access to internal financials?

Just on a plausibility analysis, what's so ridiculous about Edmonton being a top 5 revenue team?

Did you read my link about the development close to the Ice District?

No. Send it again.

 

[Samus44]

Of course OEG conned Edmonton it's why Katz sold Rexall so he can sit on the golden goose that is OEG forever with essentially no risk and a ridiculously valuable amount of real estate. Edmonton would have been better off buying surrounding lands and building the arena itself (this was what i always wanted) and giving the Oilers free rent (hell even concession sales) while profiting from all non hockey related revenue, ice district rent and so on. Instead they basically did build the arena itself and have gotten none of the revenue generated. It's likely brought in some capital from new sources that does create more revenue for the city, but part of the increase in property value and the subsequent tax revenue will always come at the expense of other areas in the city becoming less valuable.

It's not a boondoggle but it's certainly a ridiculous deal and essentially charity for a Billionaire. It should flat out be illegal to build infrastructure for pro sport teams without charging rent or creating a profitable, non tax based, revenue source for the city. If NHL teams can afford to pay players an average of 65 or so million dollars, which is half of revenues, then i have no idea how the league can't afford to put away cash every year to build and maintain necessary infrastructure like any other business has to. It's a joke but it's the world we live in, it's why the rich get richer and the poor get poorer in our faux-capitalist society. Ever think it's ironic how great capitalism and the free market and non interventionist policies are according to the Katz's of the world when it comes to taxing and business practices but how often they ask for free money? Bailing out banks and corporations, building arenas, these are all anti-capitalist ventures done for the segment of society that benefits most from capitalism and it's incredibly hypocritical.

 

[Cawz]

It's absurd to compare Edmonton and Calgary downtown vacancy situations given the volume of head offices in Calgary. Layoffs have been hitting the office/professional jobs, so of course you would expect a higher proportion of downtown negative absorption in Calgary.



What backup? Forbes, who have no access to internal financials?

Just on a plausibility analysis, what's so ridiculous about Edmonton being a top 5 revenue team?



No. Send it again.

#1 its even more absurd to suggest building an arena will reverse the affects of a huge recession a few months after opening.

#2, its arena is still smaller than almost half the league and Forbes bases its existence on being able to ascertain these types of things. I think they are less far off than you. Their external financial analysis is still more trustworthy than your plausibility analysis.

#3, its last page or the page before or something

 

[Mr Positive]

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.

but what are you basing the Oilers finance on? This little quote from the Vegas official? Well that wouldn't say a lot, considering that Vegas has only existed since this summer, where the league is only taking revenue from season ticket sales anyway, and maybe some merch.

Again, I highly doubt we're top five with the total picture, and we definitely aren't close to the revenue of the guys at the very top, with whom private funding for arenas is a certainty. I would guess that we are a mid tier type team, with good revenue, and that most teams like us also have arena deals with the city that is like what we did. I really don't know though, and I would like to know what is normal for teams in cities like our's, just to have some context about it.

 

[Speed220DChalavan]

#1 its even more absurd to suggest building an arena will reverse the affects of a huge recession a few months after opening.

That's why nobody suggested it.

What people are suggesting is a new arena will not, in the long run, have a material impact on the economic health of the Capital region.

#2, its arena is still smaller than almost half the league and Forbes bases its existence on being able to ascertain these types of things. I think they are less far off than you. Their external financial analysis is still more trustworthy than your plausibility analysis.

The Oilers initially pushed for lower capacity (in the 17K range) because it allows them to increase ticket prices. You don't make too much money having nosebleeds - the incremental revenue for Rogers place is in the form of more box suites and loge level seating, in addition to more lower bowl premium seating.

 

[s7ark]

And this is done. This conversation has been had a million times on this board.