It’s important, vital, for a municipal council to have a vision for the future of the municipality under their care. It’s also equally important that they don’t take a header off the financial cliff chasing it. Today City Council was the adult in a room, absent Daryl Katz, as it sensibly voted to cease negotiations with the Katz Group.
About this time last year, Council expended a significant amount of political capital agreeing to a generous financial framework which included a Community Revitalization Levy + $80 million from other sources, an ask to the Provincial Gov for $100 million, up to $25 million for a pedway across 104 ave, an estimated $7 million for a community rink, $20 million for a marketing agreement, $20+ million for land purchases, with the City borrowing to construct the arena with the Katz Group making their contribution at $5.5 million per year over 35 years.
Council and the Mayor agreed to this without verifying the financial claims of the Katz Group. Without analysing, or as Seattle is doing, auditing the books of their prospective business partner. Without verifying, themselves or through City Admin, their partner’s financial claims.
A process conducted largely in camera and with private verbal reports, without due diligence providing all the facts and figures to city negotiators and civic decision makers, it’s well open for abuse or manipulation. Which indeed happened with the Katz Group playing down the importance of the tentative financial framework, the agreement reached in New York, while advancing claims of a struggling business model which not only required the naming rights but the entire revenue stream of the facility to be sustainable, while continually refusing to reveal it’s finances to the City; The majority investor in the project. And of course there may have a childish trip to Seattle somewhere in between.
The front door was open, the public, the media, and a Council which has been more than generous in moving this forward was there today waiting. Instead, rather than appear and move the agreement forward, the Katz Group offered a rhetoric filled letter offering no specifics or concessions as it’s response.
Motion approved by Council this afternoon.
1. As a result of Mr. Katz letter and unwillingness to have an open discussion with Council and the frustration of the Interim Design Agreement, all negotiations, and ongoing City work related to the October 26, 2011, framework be ceased immediately.
2. That administration provide a report, as soon as possible, to City Council to report on the completion of the cessation of negotiations, and the status of the City’s current, transferable investments in a potential downtown arena project.
3. That Administration provide a report outlining a framework for Council to explore potential avenues to achieve the long term goals of sustainable NHL Hockey in Edmonton.
Last year’s financial framework, or for that matter, any further negotiations, and spending on the arena design and process, should never have occurred without verifying the Katz Group’ finances and financial claims. Whether the Oilers are a profitable venture, or a failing business model in need of external and public subsidy to carry on, civic decision makers absolutely should have been provided the information to know one way or the other.
Today’s decision, ceasing further negotiations is the responsible course. Yes, it might well have been avoided with a dose of sunlight and due diligence some time ago and along the way, but Council can’t roll back the clock. It’s something for future Councillors and candidates to learn from. The next step, it’s Katz’, and it starts with transparency on the front steps of City Hall. Anything less is probably just a letter to the editor that’s bad for the blood pressure and Katz’ remaining support on Council.