Edmonton Oilers owner Daryl Katz is attempting to set the record straight in a letter published in an Edmonton newspaper this weekend in which he writes recent suggestions that he has broken his pledge to build a downtown arena are "untrue."
In a detailed letter in the Edmonton Journal Katz writes, "Back at the time of my efforts to acquire the Edmonton Oilers, I made a commitment to help build a new downtown arena. Here is what I said in a Katz Group news release issued on March 25, 2008: ‘Daryl Katz, founder and chairman of Rexall Sports, has pledged to contribute his time, energy and on the order of $100 million toward the development of a new downtown arena following his acquisition of the Edmonton Oilers.'"
Many had thought Katz' $100 million investment would have gone directly towards the arena, but on Tuesday the Katz Group announced their investment would be put towards the surrounding arena district.
The news has many Edmontonians split.
"I don't think the taxpayers should have to pay for it," said Edmonton resident Dale Mahovsky.
"They city's going to enjoy extra taxes from all the development downt he road which will cover their cost outlet at the beginning of the deal," said Edmontonian Ken Smoley who likes Katz' idea.
Katz begins the letter by writing that "a lot has been said and written over the past few days" and "I thought it might be helped if I were to share some of my thoughts on the matter."
He continues by saying what the Katz Group has in mind is a $1.5 billion to $2 billion development in the heart of the city which he believes will make Edmonton "an even better place to live, work and play."
"Now, some will say we should just fix the potholes and call it a day. Well, I drive here, too, and I'm all for fixing potholes," wrote Katz. "But we need to aim higher than that if we want to keep Edmonton moving forward and be able to compete for talent and jobs in the future."
Katz goes on to commend Mayor Stephen Mandel's recent comments "urging Edmontonians to reserve judgment until they have more information about the project."
In the last week there has been a lot of speculation about the Katz Groups' $100 million downtown arena investment promise, especially after Katz himself went on the record with 630 CHED, the Oilers official broadcaster, and said "Precisely how and in what context the $100 million is to be contributed depends on a variety of issues, the most important of which is who owns the arena."
In the letter published in the Edmonton Journal Katz says suggestions that he has somehow broken his promise are untrue, because he says he never made commitments on what the funding model would look like.
Katz adds, "It was impossible then to know what the funding model might look like and who might own the arena, which is why I left the specific nature of the funding open."
Katz's comments come after Katz Group Executive Vice President Bob Black told reporters Feb 9 that the $100-million arena pledge would go into the surrounding arena district development and not the arena itself. According to the Katz plan, the city would borrow $400 million to build the arena, which it would own.
However, Katz admits that his lack of direct communication on the matter left a lot up for speculation.
"In hindsight, I understand how some people may have read the comment differently, and I'm sure my preference not to discuss these things publicly hasn't helped," he wrote.
Katz says he believes this model, which sees the city borrow money for and own the arena, is a much better way to finance the project instead of his group simply paying construction costs.
"That's because in the model we have proposed -- which was designed for a scenario in which the city would own the arena ---you can't separate the private-sector investment from the financing the city would provide to help fund the arena construction costs," writes Katz. "The arena creates the draw for the private-sector investment and the private-sector investment generates the revenues to pay for the arena."
Katz says by leveraging his investment in the project to attract more than $1 billion in additional development the project would create a large amount of tax revenue for the city and would fill the "city's bank account for decades to come."
Katz concludes the letter by saying his group will continue dialogue with the city and other key stakeholders and "including (and especially) the people of Edmonton."
"For now, please hear us out, consider what we bring forward and let's see if we can work together to build Edmonton into an even greater city than it is today," said Katz.
