Another Letter From Daryl Katz to the Mayor: Thanks for the Invite But I Have Other Plans

Daryl Katz sent yet another letter to the Mayor yesterday, this time declining an invitation to appear before Council to discuss the downtown arena project which appears to be heading for the scrapheap.

This afternoon City Council will receive an update on negotiations between the Katz Group and City Administration. This was a meeting that Mr. Katz, or a representative, had been invited to attend after the project seemingly went off the rails a month ago when it was revealed that the Katz Group was looking for an additional $6M annual subsidy to cover costs related to maintenance and operations. Council was not happy and neither was the Mayor and for the first time the project looked to be in doubt. News that the project was on life support was followed by the Oilers Twitter feed implying relocation without a new arena was a possibility and a trip to Seattle by Katz where the threat was made outright. When nobody took that threat seriously Katz quickly issued an apology and then things went silent.

With everything that had happened over the last month and with the Mayor and City Council confused by the requests from Katz Group it would have been a great idea for Katz to show up and talk to Council in person. This project is in real trouble and Daryl Katz is the only person who can save it. The Mayor and the Council have sold this deal - one that I think is terrible for the City of Edmonton - as much as they possibly can there is nothing more that they can do. If the last few weeks have shown us anything it's that there isn't an appetite for this deal to get done at all costs so if the City is going to make an even bigger investment in the project then Katz is going have to be the man to sell it to the people of Edmonton. That he seems reluctant to do so seems like a major red flag to me.

If you listen to the Katz Group, a new arena is the only way to revitalize downtown and it has the added bonus of ensuring that the Oilers are sustainable long-term in Edmonoton. I disagree with their narrows views of downtown but if this is what he thinks then it's time to speak up before the project gets flushed down the toilet like a dead goldfish. As usual though, Daryl Katz is not doing what most see as common sense and instead sent a letter to the Mayor yesterday outlining all that is wrong with the process right now and indicating that with all the outstanding issues, 15 according to the letter, they will not be attending the meeting, thereby missing a chance to clear the air, get the project back on track, and score some public relations points at the same time.

Beyond the we're not coming part, which was the most important part, the letter offers little in the way of new details but does include a couple of statements that caught my attention. For starters:

I fear the City has approached this negotiation based on narrow political considerations rather than a genuine desire to strike a deal that is fair and makes economic sense for both sides. I base this, in part, on your repeated insistence to the press that we somehow have a "deal" based on the New York framework. As you know, it was not a deal, but a framework that we each thought we could support, subject to actually proving it out and ensuring it would achieve our mutually recognized goal of ensuring the long-­term sustainability for the Oilers. In plain terms, we all understood the devil would be in the details, and indeed it was.

There is a couple of things here. First there's the indication that Katz doesn't see the agreement reaching New York last October as a deal but rather a framework. That might be how Katz understood what was agreed to in New York, I can't say either way because I wasn't in the room. But what I can say is that isn't how the majority of Edmontonians, and it appears Council as well, interpreted it. In which case waiting nearly a year to clear the air isn't exactly a smart idea and would be a major reason why everyone is so confused right now.

And there's the long-term sustainability of the Oilers popping up again. I've said repeatedly that I have my doubt that the Oilers are losing any money right now as has been asserted by the Katz Group and other franchise mouthpieces but I obviously can't predict the future. Any number of things could happen that might affect the Oilers long-term viability in Edmonton and if ensuring the "long-term sustainability of the Oilers" is a goal of both Katz and Council (I don't know that it should eb a concern of Council but let's assume it is) then that conversation has to start by looking at the books today and the projections for the next 35 years as well. Indeed, the devil is in the details and this is one area where I think Katz has likely been less than forthcoming.

Up next Katz' investment in the project:

To achieve these goals, I have been prepared to invest upwards of $250 million to help build an arena that the City of Edmonton would own, and to sign a 35-­‐year commitment to keep the Oilers in Edmonton, where they belong. By any objective measure, this far exceeds what NHL owners in comparable cities have done.

Katz and I are clearly working from a different dictionaries because we seem to differ significantly on the definition of help. The $250 million Katz is talking about is broken down as follows: $100 million in a City secured loan, $125 million from the ticket tax, and $25 million for the winter garden. Only one of those three items is a direct investment from Katz that helps the City construct this project. If you're not sure which one it's the smallest one and I'm sure other NHL owners have invested slightly more than that into arena projects.

And then in closing:

My door is open if City Administration wishes to continue our discussions.

I also want to remind you of Commissioner Bettman’s offer to come to Edmonton to help forge a deal that will enable us to move forward and that we can all be proud of. I hope you will consider taking him up on his offer.

Thankfully this is the end of the letter because Katz losses me a little here. To recap: he's asking for hundreds of millions worth of taxpayer funding and his door is open if we want to discuss the project further with him. That statement is all kinds of backwards and if I was in charge from the City that door would be open a very long time until he chooses to walk through it and comes to see me. It seems to me that the Katz Group honestly believes that they're doing the City of Edmonton a favour with this project. That just isn't true and it would be in Mr. Katz' best interest to realize that sooner than later.

Oh and don't even get me started on the "How about I get my employee to come talk to you." Why don't we just get Bob Stauffer in there too.

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