EDMONTON – With a deadline looming to complete a deal to build the Edmonton Oilers a new arena, the team’s brass turned up the heat on city councillors by paying a visit to Seattle.
Oilers owner Daryl Katz, team president Patrick LaForge and president of hockey operations Kevin Lowe were in Seattle on Monday for meetings about a possible relocation to the city, the Oilers said in a statement.
“The Katz Group has been listening to proposals from a number of potential NHL markets for some time,” the statement read.
“After more than four years of trying to secure an arena deal and with less than 24 months remaining on the Oilers’ lease at Rexall Place, this is only prudent and should come as no surprise.”
The team added it would not comment on discussions with other potential markets.
Katz’s visit came the same day that Seattle city council approved hedge-fund manager Chris Hansen’s plan for a US$490-million arena that both sides hope will be home to an NBA and NHL team. Seattle lost its NBA team, the Sonics, to Oklahoma City in 2008.
Seattle’s hockey market is limited to the Western Hockey League’s Thunderbirds. The city hasn’t had a professional team since the Metropolitans, who won a Stanley Cup in 1917, were disbanded in 1924.
The news came as Edmonton Mayor Stephen Mandel set Oct. 17 as the drop-dead date to complete a deal for a new downtown arena.
The deal was thought to have been done last October, when council and the Oilers agreed on a cost-shared deal to build a $450-million rink with construction slated to begin in early 2013. The cost has since escalated to $475 million.
That deal was thrown into doubt earlier this month when the city councillors were told at a closed door meeting that Katz wanted millions of dollars in new concessions from taxpayers for the proposed 18,400-seat arena.
That prompted Mandel to ask Katz to appear before council in a public session to explain the new demands, but the Oilers’ owner declined.
Under the deal, the proposed rink was to be funded mostly by taxpayers and ticket buyers.
The city was to pay $125 million, although councillors have since been told that land sales and interest will boost that figure to more than $300 million. That number also doesn’t include millions more in transportation infrastructure, including a light rapid transit stop.
The Oilers were to pay operating costs for the facility along with $5.5 million a year for 35 years to help fund construction. In return, the team was to get all profits from Oilers games, trade shows and concerts for 11 months out of the year, along with naming rights worth an estimated $1 million or more annually.
The team would have also received $20 million over 10 years from the city for advertising.
At the closed door meeting earlier this month, councillors were told that, among other concessions, Katz wants $6 million per year from taxpayers to offset the cost of running the building.
The Katz Group, in a letter to council, said they had had a second look at the numbers and that there needed to be changes in funding to keep the team viable in what Katz says is a “small market.”
When details of the meeting were leaked to the public, the two sides began sniping at one another. Katz said the $6 million was always part of the deal, while councillors said it was not.
“To suggest I tried to change the deal at the last minute is really unfortunate,” Katz told a sports radio show.
This is not the first time Katz and the Oilers have had talks with other potential suitors. Team officials have been in Hamilton before and there were even talks at one time to relocate the arena to First Nations territory outside Edmonton.
The arena debate has been long and heated in the Alberta capital.
Katz has made it clear he wants a public subsidy deal similar to the one given to NHL teams in Winnipeg and Pittsburgh.
Forbes ranks the Oilers in the middle of NHL teams with a worth of $212 million.
Katz, who bought the Oilers for $200 million, says he has been losing money every year due mainly to the poor arena deal. The Oilers, unlike other NHL teams, receive very little non-hockey money such as concession revenues.
Monday’s manoeuvrings were worrisome deja vu for Oilers fans. Former owner Peter Pocklington wooed Hamilton in order to get a better arena deal from the city back in the early 1990s. And in 1997 a lease clause that mandated a new local buyer get first crack at purchasing the team was all that saved the Oilers from relocating to Houston.