Hey! Remember when the narrative of "Katz wants to do something nice for the city", was popular? Yea, me too; those were good times. The belief he was going out of his way to do something beneficial for the city was comforting, and the early promises of upfront investment were appealing. Edmonton was roped in to the opportunity of a lifetime.
Slowly though, this narrative has eroded and the true vision is revealed, a risk-free-heavily padded bottom line. Nothing else will do.
Today in the council meeting, finally some real proper questions were being asked and as they should. It's perfectly reasonable to ask how someone who doesn't bother to show up to negotiate and engages in backroom on the fly deals could ever be committed to a 35year deal. Of course, along this line, the one question I still don't hear being asked is what we're going to do with this arena in 35 years.
I once again feel the need to bring up the fact Rexall is only 40 years old. In 35 years when this arena is supposedly paid off, will we need another one? Are we saying the lifespan of an arena - one of the most energy intensive complexes to build - is really only 30-40 years? I know people say well "this one will be done right", and "this one will be state-of-the-art". If we thought Rexall was done "wrong", why did we build it? why is it still in operation? What came first: Rexall? Or the bad neighborhood of 118ave? I'm pretty sure Rexall did, 118ave used to be nice, hell it's called "Alberta Ave" for a reason.
I'm going to be incredibly honest here and say exactly what I think: Edmonton is spoiled. We are the poster-child of the disposable society, to the point we view an entire arena as disposable because we just don't like it that much anymore. The surroundings of Rexall fit the culture that attends the functions there. As an example: Do you believe that painted up oiler fans, sweaty and smelly after a game are going to hop on over to the upper-class Lux Steakhouse afterward for a bite? Think they would even be let in? We have two stadiums and both are the center of the two worst neighborhoods in the city, I don't think that's coincidence.
I'm not trying to be insulting to hockey fans, all I'm trying to say is "sports culture" and "night on the town culture", are very different beasts. I assume most think about a revitalized downtown (the original selling point of the arena if you remember) as a "night on the town" environment. A sports complex isn't going to create that, and neither is another office tower with the city as it's main tenant. We have tons of office towers, with plenty of existing space for lease. I don't think Telus would have kept their HQ in Edmonton if we had had a new arena.
Over the last years the city has been debating this arena, the global economy has continued to worsen, yet the city projects growth and revenue as though none of these things are happening. A recent Bank of Canada survey found much of corporate Canada has a negative outlook on the Canadian economy for the reasons I've been laying out on this blog. These reasons are becoming quite apparent now as more and more of the power structure admits a domino like effect of collapsing economies is probable. The Canadian housing bubble is admitted to be collapsing.
Edmonton, I really must insist you re-evaluate the long-term needs and goals of this city. Daryl Katz tried to pull a fast one on us with a massive information-less propaganda campaign, but now that the euphoria has worn off and the real questions are starting to be asked we see exactly how far along this deal really is. It's nowhere, and was never anywhere. Everything up until now has been rhetoric and hype meant to secure a commitment before anyone read the small text.
One final note I have, is that when it comes to Katz's request for an additional $6M dollar subsidy on the basis that he will be losing money, he may not be wrong necessarily. In my very first post on the arena back on my other blog, I stated essentially that Katz had to get this deal through before the true state of the economy became apparent. As things continue to collapse, food prices continue to go up, and outlooks continue to darken - profit projections based on pre-2008 growth are going to be a lot harder to pass off as realistic. Because of this, I have no doubt that in maybe 5-10 years the arena will be hemorrhaging money - and we'll be paying for it. Looking at past finances doesn't give any clues as to the future when that future is relying on so many circumstances and events outside of our control. This is not to say I would support such a subsidy, I don't, to me what it says is "maybe Katz (and apparently other NHL heads) needs to find a business model that works - being a businessman and all". We might really like what it is a business does, but a failed model is a failed model, unsustainable and prone to collapse sooner or later - when the handouts stop coming.
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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading.