Friday, January 04, 2008

 

Dan Mason outdoes himself

From John Mackinnon's sensible piece today:
"The city is at a (historical) turning point where it has to decide whether it wants to be a player or not," said Dan Mason, a University of Alberta professor who specializes in the business of sport. "I honestly think these next couple of years will determine where Edmonton ends up in the global urban food chain.

"This is the time where Edmonton needs to decide whether it's a city that worries about potholes or a city that worries about the vitality of its downtown and the way it's perceived on the global stage."



He seems to be posing that last statement rhetorically. If he took an actual poll of residents over whether they are more concerned about the pothole on their street or where Edmonton ends up in the global urban food chain (I'm not the only one laughing at this, right?), I think he might be surprised at the results, and needless to say, disappointed.

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Comments:

I think his comments speak to more than merely the perceived consequences of a new arena. If you were to ask individuals working in City Hall or the Legislature, you'd find that an overwhelming number of people would share his sentiment. Edmonton is at a crossroad, and it needs a fundamental shift in philosophy if it ever wants to be more than a backwater town that happens to have a population of 1 million.

In a similar manner, Calgary is already on it's way. By the end of our lifetime it could be the economic centre of Canada, not Toronto. Hell, some more optimistic individuals are placing it within 20 years.
 


I believe I understand quite clearly what his comments speak to, but enough snark: I would suggest to Prof. Mason (or anyone) that they look into examples of million-plus "backwaters" that Edmonton ought not become (or is it remain?), and survey whether they got that way because they paid too much attention to fixing potholes, or too little. (Fixing potholes, plowing snow, keeping taxes down, maintaining a functional sewer system, etc.). The horse pulls the cart, not the other way around.
 


Matt...I work in a municipal engineering department and you would not believe the ratio of calls I get regarding potholes, snow clearing, storm ponds, lot grades, garbage collection, etc to those regarding new arena finacing....it's almost like people care more that their tax dollars are spent wisely on the former not the latter - and they don't even like it when they go up just to maintain or improve the former.....but then, they're not university profs.
 


jon....not sure about the Leg - they can be kinda loopy, but I'm sure if you asked most people that work in City Hall (at least the planners and engineers), they'd say give me enough money to repair the roads, sewers, and sidewalks and let developers pay for their own developments.
 


and it needs a fundamental shift in philosophy if it ever wants to be more than a backwater town that happens to have a population of 1 million.

Give me a break. This is just a rhetorical device that really means, "if you don't do it my way, you suck." This town has never been backwater, and I'm tired of people saying that just to advance their own agenda. Oh, and Calgary will never replace Toronto as the economic centre of Canada. I dislike TO as much as the next guy, but this is a pipe dream.

Anyway, I was glad to see MacKinnon confirm there is no current Location Agreement between the EIG and the City, which is what we thought a day ago. That is the important part of his article, to my mind.
 


Hey, did you guys know that Cal Nichols saved the Oilers? Me, either! Thank goodness for Terry Jones!
 


"be more than a backwater town that happens to have a population of 1 million."

MikeW! and I were talking about this recently. Living in Toronto, I miss Edmonton's cow-hosers, and I hope that it maintains its backwater edge.

I walked through a mall here recently, and I didn't see a single cow-hoser or a single belt-buckle. That just ain't right.
 


said Dan Mason, a University of Alberta professor who specializes in the business of sport.

Well, there's your problem right there! Does the UofA really need a Professor who specializes in the business of Sport? If UofA is still trying to finance a new athletic something or other, a good place to start the fund-raising is to remove the 'expert' on sport-business.
 


And since we cannot stress this enough, Dan Mason does not have a degree or diploma in any business or economics related field.
 


I could buy the "new arena turns backwater into international superpower" argument . . . if it weren't for the fact that Edmonton already has an arena and the professional sports team to go along with it.

Andy, you've got it right: Calgary will never be the economic center of Canada. We're lacking in the oceanfront property department. Planes, trains, and automobiles just aren't enough to handle international trade. I can see western Canada taking over from Eastern Canada, mostly because Vancouver has access to Asian markets, but that will depend heavily on all three big cities (Calgary, Edmonton, Vancouver) showing improvement. Calgary isn't going to do it on it's own.
 


I could buy the "new arena turns backwater into international superpower" argument . . . if it weren't for the fact that Edmonton already has an arena and the professional sports team to go along with it.

I know the first thing that pops in my mind whenever I think about London, Tokyo, New York, Rome, and Paris is, "they have the best arena downtown!"

The "either/or" argument is absolute bullshit. The fact that they keep going back to Mason for this stuff is just sad.
 


Kudos to Andy, and to Mackinnon, for beating back the location agreement red herring that Butler & co. lobbed at us. Unfortunately, Butler did succeed in exploiting Edmonton’s civic insecurity about not being world class enough without an Oiler franchise. Obviously he didn’t say that, but you could read between the lines when he invoked the specter of Katz not committing to a location agreement.

And just when you’re ready to congratulate Mackinnon for neatly summarizing this location agreement matter, he decides to play the insecurity card himself. The Prof Mason quote is an insinuation that we’re still world-class schmucks if we don't get on board with downtown revitalization, which in the context of this entire ownership discussion is code speak for “must-have-new-rink-in-downtown-Edmonton.”

I am not opposed to the concept of a new rink, but the constant propaganda in this town of a new downtown rink being such a gosh darn wonderful it's-all-about-community facility - that a golden age of homeless-free prosperity will emerge in Downtown Edmonton - is vile.

You'd never know it from the Edmonton media or the professor, but not everyone (including the odd economist) believes that
a pro sports stadium will bolster the local economy.
 


the solution is clear - plant pretty trees and flowers in the downtown potholes.
 


Dan Mason does not have a degree or diploma in any business or economics related field.
So why quote him at all? Aren't there any credible voices the media could turn to?
If anybody from the city is reading, I want my taxes to pay to clear snow off roads, to fix potholes, to make sure the municipal water system doesn't leak millions of gallons of treated water. I do not, under any circumstance, want my taxes to pay for the capital improvements of a private business.
Let whoever owns the Oilers pay to build their next "factory" and try to recover the costs from the people who wants to pay for it - the game-attending fans.
 


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For the record, Dan Mason has over 30+ publishes reports regarding the business side of the NHL.

He's part of the arena committee I believe - he's studied these things.

He told me he's against a public subsidy for a stand-alone arena - but part of the bigger development, he's in favour of it. He's obviously studied these things to form an opinion on them.

Great guy, he is.
 


For the record, Dan Mason has over 30+ publishes reports regarding the business side of the NHL.

We know, PJO. You've told us. Doesn't change the fact he's got three Phys. Ed degrees. There's a whole department of economists at that University, as well as an entire Faculty of Business. They can't get a quote from anyone else? Hey, they could even ask the president of the University Mason works at. She's an engineer, but she's got lots of ideas about what is required to build a city. I'm gonna guess an arena isn't one of them. And please quite saying "development" and "world-class facility." The goal is to build an arena for the hockey team, using our money. Putting a bunch of buildings up along with it isn't part of some sound economic policy. It's a disguise.
 


I remember reading an article interviewing some world-renowned architect about what he would do to turn Calgary into a world-class city.

His idea was to dam the Bow River, flood downtown, and build million dollar houses on the brand new lake front.

Makes a downtown arena sound pretty good.
 


I'm inclined to be skeptical too. I just read something that the guy wrote and it doesn't seem particularly rigorous to me. I'm not quite ready to throw my Zimbalist writings off the balcony at my place yet.
 


Andy,

Obviously I agree - it is a larger case of making the rich richer. However, it's not as simple as you're making it to be IMO.

Questions must be researched - how long is Rexall Place viable to produce strong NHL revenues? Is the NHL moving away from gate receipts to more corporate sponsorship and premium seating/luxury boxes? How much will the total project cost to the taxpayers? What are methods to reduce public risk and subsidy [i.e. hotel & Casino tax]? Is there a way of generating spin-off revenue via a development site [i.e. Columbus - Arena district] ? And if Edmonton can do so without hurting taxpayers, why shouldn't they?

I don't know these answers - but they were studied in the arena committee report. I'm trying to be a little more open minded about this than I was say, 6 months ago.

Everyone's quick to point out that arena business does not make economic sense [and by itself, it doesn't] - but conveniently, Jubilee, Winspear, Art Gallary get their funding under the label of culture. However, isn't the game of hockey the fabric of Canadian culture? Basically, my point is that you have to be consistent across the board.

Here's an event you may be interested in going to:

http://www.edmontonchamber.com/pdfs/Special_Events/2008%20Events/SportConference2008-PromoForm-2.pdf

As for Dan Mason, he's an extremely intelligent guy. I know this from attending his Business of Hockey class, and reading multiple published reports. The fact that he doesn't have an economics degree is irrelevant in my opinion - he's in the know and has strong understanding of these concepts. I'd post his reports on here to show you what I mean, but I'm not sure if I got permission to do so.

For the record, I'm interested you didn't raise up the point that Epcor, largely a city owned company, will be constructing an office tower out of the pockets of Edmontonians?
 


We're lacking in the oceanfront property department. Planes, trains, and automobiles just aren't enough to handle international trade. I can see western Canada taking over from Eastern Canada, mostly because Vancouver has access to Asian markets, but that will depend heavily on all three big cities (Calgary, Edmonton, Vancouver) showing improvement.

Dude, you cannot be from Calgary. Asian trade? Are you fucking kidding me? Go to Google Earth, find Edmonton, and then slowly scroll to the Northeast.

See that big fucking hole? That hole is 100 times more important than a bunch of freight ships from China carrying lingerie and lego.

Asian trade....thanks for the laugh.
 


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mc79hockey@gmail.com

Email 'em over PJO.
 


to me, the point that Edmonton has no real long term vision seems to be quite self evident. I grew up here, love the city but, really, does this even need debating? this has become really clear to me since I moved away from E-Town in 2001 and actually lived in cities with viable plans ad vision (Melbourne, Australia, Vancouver, Toronto to some extent, Montreal).

Edmonton's examples range from out of control housing developments to out of control big box developments (is South Edmonton Common the mark of a city with a plan??) and the city's unyielding and relentless devotion to building a city whic is impossible for people to actually walk in. And so on. The city needs VISION.

The real question then becomes whether a downtown arena s part of this vision or just the plaything and legacy project for Stephen Mandel, the EIG, Daryl Katz, Selmach and whoeve else. Shoudl public mone fund the thing? - that's another very good question.

In the end, I'm for the project as what this city needs is a continuing reorientation towards its centre, although taxes probably shouldn't pay for it. The New Arena isn't going to fix everything but it's part of the process.
 


PJO,

Epcor is a cash cow that regularly contributes net surplus into City of Edmonton general revenue. It is a profitable business with the capital investment fund to make acquisitions and co-invest in its new office tower. Sole shareholder is the City of Edmonton.

Northlands -- on the other hand is the cash sucking City organization. 2.2M shortfall annually.

Oh -- and the rich get richer. Never a truer phrase mentioned in all the blogs and all the comments on this topic.
 


One of the arguments has been that an arena development site with say, a casino, hotel, large movie complex, restaurants, etc. would provide downtown with a key tangible feature site.

What is the feature point of downtown Edmonton today? City Center Mall? The Bank Nightclub?

I don't fault anyone for generating ideas to make the city better and then researching them

The way I see it, Dan Mason isn't thinking it from the Oiler's POV, but in Edmonton's POV.

Of course with guys like LaForge and Nichols subtly promoting a new arena under the label of "best for the community" - well, for those that are smart enough to realize that they just want your tax dollars for their private venture - you just don't want to side with them, regardless of the benefits.
 


Questions must be researched - how long is Rexall Place viable to produce strong NHL revenues? Is the NHL moving away from gate receipts to more corporate sponsorship and premium seating/luxury boxes?

What do I care? That's an owner's problem, not mine. And just for the record, the trend is away from premium seating and luxury boxes. I posted a WSJ story on that months ago.

How much will the total project cost to the taxpayers? What are methods to reduce public risk and subsidy [i.e. hotel & Casino tax]? Is there a way of generating spin-off revenue via a development site [i.e. Columbus - Arena district] ? And if Edmonton can do so without hurting taxpayers, why shouldn't they?

I'm not interested in the "either/or" proposition. There are other things that could be done with that area other than building an arena there, things that will be beneficial to the city without costing the taxpayer. Why aren't we imagining any of those? Um, because they want an arena, so they'll just build around that original plan without paying any heed to alternative visions.

And just for the record, the arena in Columbus was built through private money. I think it's kind of funny that downtown advocates keep using this as an example. Public funds were not used to build that arena. Nationwide financed that building. Taxpayers refused do so. In fact, I believe Nationwide financed the entire Arena District.


For the record, I'm interested you didn't raise up the point that Epcor, largely a city owned company, will be constructing an office tower out of the pockets of Edmontonians?

It will? This is news to me. I'd be interested in seeing anything on that. Are they getting any more benefits than the EIG already gets under current agreements with Northlands and the City? Let's not forget that taxpayers already subsidize this team. I certainly don't get to rent facilities and land like that for $1 a year.
 


Edmonton's examples range from out of control housing developments to out of control big box developments (is South Edmonton Common the mark of a city with a plan??) and the city's unyielding and relentless devotion to building a city whic is impossible for people to actually walk in. And so on. The city needs VISION.

Funny, I could've sworn you were talking about Calgary. What a coincidence that we seem to have the same issues. Does Edmonton also build the roads to accommodate the traffic five or ten years after building the original development?
 


One of the arguments has been that an arena development site with say, a casino, hotel, large movie complex, restaurants, etc. would provide downtown with a key tangible feature site.

What is the feature point of downtown Edmonton today? City Center Mall? The Bank Nightclub?


Another casino and more movie theatres? That's the genius plan? WOW. Brilliant. That will really escalate us up the " global urban food chain."

I've seen more housing, more restaurants, more bars, a new art gallery, a GMCC campus, and a new UofA campus go up in the past ten, fifteen years, PJO. Downtown is revitalizing, and there's no reason to think it will stop just because an arena isn't built. I don't think suggesting putting VLT's in the area really helps yours and Mason's cause.
 


PJO,

Epcor is a cash cow that regularly contributes net surplus into City of Edmonton general revenue. It is a profitable business with the capital investment fund to make acquisitions and co-invest in its new office tower. Sole shareholder is the City of Edmonton.


I realize this - but then the question begs - what was wrong with EPCOR's current rent/lease arrangement, that required them investing 100M+ for a new office tower? Just the same way many argue the Oilers don't need a new arena until say 2020 - Did EPCOR really need their own building?

As for the Oilers, EEDC did a study during the lockout and found the Oilers economic impact to be 50M/year. Whether that is accurate or not, and if it takes into account of the substitution effect - I'm not sure - but it is something to look at. I think many would be surprised at how many fans in attendance are out of towners - the Oilers even own Southern Alberta [Lethbridge and Medicine Hat]. Then there's central and Northern Alberta, NWT, Saskatchewan, and Manitoba.

Obviously, I don't think a new arena will bring in much marginal out of town spending after the out-of-towners initially come to witness a new state-of-art arena - but the bigger question is, how much life does Rexall place have in an NHL that is moving away from gate receipts revenues? And if Edmonton can build a new arena and development site while minimizing public investment - why not take a shot at it?

RE: Making the rich men richer - absolutely. It was LaForge back in 2005 exclaiming a new arena would generate an additional 10M in revenues. That's what it's all about from the Oilers POV. At the same time, I'm not completely ready to discount the fact that Edmonton as a whole can benefit from a development site
 


What do I care? That's an owner's problem, not mine. And just for the record, the trend is away from premium seating and luxury boxes. I posted a WSJ story on that months ago.

Well Andy - I'd be more interested in the NHL's numbers. According to those [and verified by Mason], the NHL is moving away from gate receipts revenues to premium seating [i.e Gold in Rexall] and luxury boxes. Why you think the Oilers downsized from 17,410 capacity to 16,839? According to Bryn Griffiths - the Oilers want the new arena to be no more than 17,500 - with triple the luxury boxes. That's the reality of the trend of the NHL.

And the "You-can-go-Fuck-yourself" attitude is what will turn Edmonton into Winnipeg [losing the only major league sports team], or repeat a Pittsburgh situation all over again.

Do you honestly believe the EIG, a group of small time players that had trouble raising 65M back in 1998 to save the Oilers, have enough money to fund a 250-400M arena?

Rarely do private investors fund the entire arena themselves. In America, there were 70+ stadiums/arenas built via tax money.

It's it what it is.
 


^ It is what it is
 


We interrupt this blogger pissing contest to bring you this amusing news from Toronto.

Wonder if there are any parallels beyond the superficial "single billionaire tries to buy hockey team from faceless corporate conglomerate" angle?
 


If only Edmontonians hadn't chickened out 40 years ago ... we coulda had the Omniplex ... we coulda been world class contenders. And they woulda come from far and wide to worship our fair city's world class essence.
---

In a previous post, someone thought that Mason was on the arena committee. Dan Mason is not listed as part of the original 9-member 'blue ribbon' arena committee that was struck last April. Has the committee membership changed since then?

It drives me absolutely nuts that he is the Journal's favourite quotable academic on all things new arena. I guess that's what we're supposed to swallow as authoritative analysis in this town. And with the ECC 2008 arena conference coming up, which sounds like a complete arena love-in by the way, I have zero expectations of any media outlet in this town asking the hard questions when said conference occurs.

---

What? The new EPCOR tower is not going to be funded by ticket sales from Calgary's EPCOR Centre for Performing Arts?
 


Another casino and more movie theatres? That's the genius plan? WOW. Brilliant. That will really escalate us up the " global urban food chain."

I've seen more housing, more restaurants, more bars, a new art gallery, a GMCC campus, and a new UofA campus go up in the past ten, fifteen years, PJO. Downtown is revitalizing, and there's no reason to think it will stop just because an arena isn't built. I don't think suggesting putting VLT's in the area really helps yours and Mason's cause.


Well, it's not like another Casino or movie theater is set in stone there. The larger point is, it can be a feature point where there is increased activity - a place where downtown is more vibrant. How is that really a bad thing?

A new arena in Edmonton will happen sooner or later - why not work with them instead of against them? Why not create a development site if it minimizes public investment?

Mandell has already gone on the record stating little to no public money will be used for this project - they will just have to get creative financing this thing. READ [San Diego Model]

At the same time, I can understand how a piece of you dies everytime you recall LaForge's "Literally, crush" propaganda, and Gary Lampier's, "Hell, the guy just apologized" as a point to support a new arena.

At the same time, I think you should be a little more open minded - you're preaching on the other end of the extreme, in my humble opinion, of course.
 


Would you say it's a fair point that a state-of-art downtown arena enhances the community's image?

Is it not fair to say that Rexall Place's current location reflects poor to an out-of-towner? Just as the fucking airport built in the middle of nowhere does?

I mean sure, the next arena in Edmonton should follow the Ottawa Senators "Kanata" model. Any free cheap land available close to Leduc International Airport? That way, the visiting team won't even have to come to Edmonton to play the Oilers - they'll get a hotel in Nisku, practice at the arena, play the game at 7:00 and then connect to Calgary/Vancouver towards their destination after the game is over. Viola!
 


Rarely do private investors fund the entire arena themselves. In America, there were 70+ stadiums/arenas built via tax money.


Forgot to add the point of:

Since 1995
 


Fuck, I've been to Detroit recently. Comerica right next to Ford Field, a small oasis in an otherwise terrifying area.

One of the arguments has been that an arena development site with say, a casino, hotel, large movie complex, restaurants, etc. would provide downtown with a key tangible feature site.

Why can't this be done without an arena? I mean, I'm listening to this, and what I'm hearing are a bunch of people who are trying to justify this. I've said it before - I'm a proponent of a new arena and I hope that you guys cut your social services to the bone to pay for it. I don't fucking live there or pay taxes there, so it's no hair off my ass. That said, there should be an honest debate. The question with this casino/theatre thing should be this: could a better return on public money be acehived? Could it be achieved without an arena? If not, I don't see how it justifies building a rink.

Rarely do private investors fund the entire arena themselves. In America, there were 70+ stadiums/arenas built via tax money.

In Canada, there have been four arenas built with private money. Which do you think is a more relevant comparison?
 


I've seen more housing, more restaurants, more bars, a new art gallery, a GMCC campus, and a new UofA campus go up in the past ten, fifteen years, PJO. Downtown is revitalizing, and there's no reason to think it will stop just because an arena isn't built...

Minus the Sidetrack Cafe.

Sure, downtown is revitalizing, but it'll take 50 years at this pace to approach a really vibrant city core.
 


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That said, there should be an honest debate. The question with this casino/theatre thing should be this: could a better return on public money be acehived? Could it be achieved without an arena? If not, I don't see how it justifies building a rink.

It's more in the sense that:

1) Edmonton will get a new arena
2) Vacant Downtown land provides an opportunity for a key tangible feature site. LRT is nearby. Lots of parking space.
3) So why not build an arena, in a combination with the restaurants/casino's/hotels/real estate/bars/theaters/etc, especially if it generates spin-off revenue that it pays itself off & minimizes public investment?

I'm not willing to throw a cheque - I'm suggesting these questions [Such as: How much longer is Rexall's life for NHL hockey] be researched and analyzed properly.

Basically, I'm arguing if it's a foregone conclusion that a new arena is going to be developed, the ideal spot is downtown.

As for the ''better return on it'' - as I said, you have to be consistent. By that, you'd be totally against the public funds directed towards and escaped under the label of "culture" and those didn't generate the highest possible economic returns. They include Jubilee Auditorium, Winspear Centre, Shaw Conference Centre, and the 88M Art Gallery renovation [which received contribution from Ottawa, and effectively is paid from your tax dollars Tyler].

Economically speaking, the Eskimos as a "community owned" franchise, made the right decision to take the quick 10M in the sale of the Trappers. Culturally, Edmonton lost high caliber baseball [Half the 2002 Championship team is playing in the Majors] and has now resorted to shit-class independent leagues filled with has-beens or never-were's. Sometimes, you just have to ignore the economic side of it. That's why, even though the EIG were throwing a 5M sum at the Prince Albert's, Moose Jaw's, and Swift Current's in the early 2000's - they were rejected every instance by those largely community owned teams.

Now I've sidetracked the argument...but point stands.


In Canada, there have been four arenas built with private money. Which do you think is a more relevant comparison?


How would the numbers swing if we factor in stadiums like CW, BC Place, Taylor Field, etc.? And keep in mind, stadiums are empty 350 out of 365 days a year - at least so in Edmonton.

Edmonton is not Vancouver, Toronto, or Montreal. There are enough deep pockets in those cities to finance the costs, and the marginal revenues [parking, luxury boxes revenues, larger scale concerts, etc] generated from those arenas makes it reasonable to privately invest in them.

Another point that should be mentioned: For Toronto and Vancouver, it should be pointed out there were significant economies of scale with 2 major tenants [Raptors & Grizzles].

Now in Edmonton - honestly, you expect the EIG/Katz to privately finance it in its entirety? If the EIG had the means to finance it, it would have long been done.

As for Ottawa being privately financed - I'm not positive it was 100% privately financed. I'll check on that later on. However, what's conveniently left out is:


For several years after the Senators' franchise was granted, the team had trouble securing financing for the construction of an arena. The team received no financial help from the provincial government, including a refusal to pay for a new highway interchange to serve the proposed arena site. Despite the lack of financing, a ground-breaking ceremony was held in June 1992. On August 17, 1993, Bruce Firestone, the Senators owner, resigned after missing mortgage and development payments and was replaced by Rod Bryden, a former high tech tycoon. A year later, Bryden managed to borrow enough to pay for the $188 million arena [2]. Unfortunately this debt proved too much for the Senators' organization to handle when the mortgage holder Covanta Energy (formerly Ogden Entertainment) went into receivership and the Club was expected to pay off the whole debt. This eventually lead to the club itself declaring bankruptcy in 2003.


The world isn't black and white. Like, Fuck man ;)
 


I realize this - but then the question begs - what was wrong with EPCOR's current rent/lease arrangement, that required them investing 100M+ for a new office tower? Just the same way many argue the Oilers don't need a new arena until say 2020 - Did EPCOR really need their own building?

Just to be clear here, EPCOR doesn't own that building. They are renting space in it, just like they do with their current space. Qualico owns that building, and paid for it. Read the press release. Also,the company is run at arm's length and is self-financed -- it does not use tax dollars. 70% of its revenues also come from outside of Edmonton.

Would you say it's a fair point that a state-of-art downtown arena enhances the community's image?

No, I wouldn't actually. I don't ever dream of visiting Columbus, Ohio, regardless of their supposed arena paradise.

And the "You-can-go-Fuck-yourself" attitude is what will turn Edmonton into Winnipeg [losing the only major league sports team], or repeat a Pittsburgh situation all over again.

Here we go, trotting out the old "we'll lose the team" argument. Thanks, Peter Pocklington.

As for the Oilers, EEDC did a study during the lockout and found the Oilers economic impact to be 50M/year. Whether that is accurate or not, and if it takes into account of the substitution effect - I'm not sure - but it is something to look at.

Whether it is accurate or not? What the hell? Now it doesn't matter whether the EEDC would inflate or exaggerate the team's impact on the city?

Rarely do private investors fund the entire arena themselves. In America, there were 70+ stadiums/arenas built via tax money.

And they are all idiots for doing so. Thing is, taxpayers aren't falling for it anymore. Unfortunately, the Mayor here hasn't even indicated that he'll put the question to referendum.

The larger point is, it can be a feature point where there is increased activity - a place where downtown is more vibrant. How is that really a bad thing?

It's not. Just let some developers buy the land from the federal government, put some nice condos and boutique stores down, and leave me the hell out of it.

I mean sure, the next arena in Edmonton should follow the Ottawa Senators "Kanata" model. Any free cheap land available close to Leduc International Airport? That way, the visiting team won't even have to come to Edmonton to play the Oilers - they'll get a hotel in Nisku, practice at the arena, play the game at 7:00 and then connect to Calgary/Vancouver towards their destination after the game is over. Viola!

You are totally correct. There isn't a site four minutes away from downtown where the team is playing right now. Let's go out even further, PJO. Let's just build it in Grande Prairie. Does that help your case even more?

Lots of parking space.

Downtown has lots of parking space? Where? Please share.


Edmonton is not Vancouver, Toronto, or Montreal. There are enough deep pockets in those cities to finance the costs, and the marginal revenues [parking, luxury boxes revenues, larger scale concerts, etc] generated from those arenas makes it reasonable to privately invest in them.

So now you are telling me that Katz can't afford to build an arena? Or that the Calgary-Edmonton corridor isn't one of the wealthiest places in the world? Huh. That's news to me.

Basically, I'm arguing if it's a foregone conclusion that a new arena is going to be developed, the ideal spot is downtown.

You haven't been arguing that at all. And it isn't a foregone conclusion. Your side's just pretending it is. In fact, they created this idea and this argument out of thin air a year ago, and then just started acting like it was Manifest Destiny.

Now in Edmonton - honestly, you expect the EIG/Katz to privately finance it in its entirety? If the EIG had the means to finance it, it would have long been done.

This is also b.s. These guys are smart businessmen. They went to the public trough first. Why spend your own money when you can spend someone else's?
 


At the same time, I think you should be a little more open minded - you're preaching on the other end of the extreme, in my humble opinion, of course.

I think I'm being entirely level-headed. I just haven't heard a single substantial argument from any of the stakeholders. All I hear is, "it will be awesome, no really," "it will chase homeless people and drug dealers away," "it will be close to my house," and "if we don't do it, we'll be a terrible city without an NHL team forever."
 


PJO, can you tell me why there isn't vibrant economic activity around Rexall Place right now? There's an arena, a hotel, a couple restaurants, and a place where people can gamble. I know, I know, a racetrack isn't as ideal as a giant casino, but still. There's lots of parking, and it's only two train stops from Churchill Square. Aren't all those the prerequisites for booming economic activity? Why hasn't that area helped move us up the global urban food chain? Or the area around Commonwealth Stadium, for that matter, which is only minutes from the proposed new arena site?
 


Also, by your own admission, and Dan Mason's own admission, building the arena by itself doesn't make any economic sense. That is to say, you have admitted that its costs outweigh its rewards. So why include the arena at all? Why not just build more of the things that apparently do make economic sense? Isn't this a more sensible, and prudent thing to do? If the arena provides no economic benefit by itself, doesn't it stand to reason that it won't provide any economic benefit when surrounded by other enterprises? If this is not the case, could you explain why, using hard solid, factual examples, and avoid terms like "synergies?"
 


Seriously, I was absolutely unaware of this global urban food chain thing. Does this mean we're all going to wake up one morning and find ourselves devoured by Vladivostok or Ougadougou?
 


Hey, I'm going to Vladivostok for the first time this summer. I'll let you know if we should fear it.
 


Does this mean we're all going to wake up one morning and find ourselves devoured by Vladivostok or Ougadougou?

I'll let you know if we should fear it.


Awesome. An image of the GUFC is now up.
 


Jubilee, Winspear, Art Gallary get their funding under the label of culture. However, isn't the game of hockey the fabric of Canadian culture? Basically, my point is that you have to be consistent across the board.

At the risk of sounding like a free-marketer, why is my tax money wasted on that stuff too?

I've got a proposition for you, PJO: I'll pay for what I want. You pay for what you want. If you can convince enough of your like-minded pals to pay enough per ticket to attend Oilers games, perhaps an NHL team, complete with brand new building, will be viable in Edmonton. If not, nice knowin' ya. Thanks for the five Cups.
 


Questions must be researched - how long is Rexall Place viable to produce strong NHL revenues? Is the NHL moving away from gate receipts to more corporate sponsorship and premium seating/luxury boxes?

Are they? If so, that would be the most unfortunate move -- its the exact opposite of every other league:

The Wall Street Journal reported over the weekend that the Seattle Mariners ripped out eight skyboxes from Safeco Field a few weeks ago, a symbol of the souring of the luxury suite as the sure shot revenue source for pro teams.
 


PJO, can you tell me why there isn't vibrant economic activity around Rexall Place right now? There's an arena, a hotel, a couple restaurants, and a place where people can gamble. I know, I know, a racetrack isn't as ideal as a giant casino, but still.

Don't forget too Andy that there is already a "real" casino one LRT stop away (and a 5 minute drive).
 


No, I wouldn't actually. I don't ever dream of visiting Columbus, Ohio, regardless of their supposed arena paradise.

Nobody is arguing a new arena will continue drawing out of towner's at higher rates indefinitely - but you honestly think a downtown arena wouldn't enhance Edmonton's image? You think it wouldn't contribute towards a changing opinion on Edmonton? Face it, downtown is the core of cities.

No one is arguing a large number of folks from Dallas are going to come to Edmonton to see a new arena - the argument is that it can enhance the overall opinion on Edmonton.

Here we go, trotting out the old "we'll lose the team" argument. Thanks, Peter Pocklington.

Well Winnipeg and Quebec City are 2 real life examples of cities that lost franchises, and arena was a big part of it. Pittsburgh, had the y not got lucky with Crosby, may very well have been on the same path.

Rexall can produce top 10 league revenues today. However, that can easily change in the future, when larger markets such Chicago, LA, and St. Louis get their shit together. A new arena would pretty much guarantee the long term viability of the franchise in Edmonton - should the city continue to wait until it reaches the point of Pittsburgh? Or does it make sense to plan it in advance? You can't just with the snap of your fingers decide in say 10 years from now, "Ooops, we miscalculated. Let's just build a new arena up." The sports market is volatile with tons of variables involved - nobody expected 5 years ago, the Oilers would be financially successful as they are today.

The Fact that Rexall is the NHL's 3rd oldest arena is indeed a legitimate concern - most NHL arena's have been constructed post 1995. At what point are you willing to admit so?

Whether it is accurate or not? What the hell? Now it doesn't matter whether the EEDC would inflate or exaggerate the team's impact on the city?

Well, the fact is economic impact studies RE: Sports teams, are difficult to calculate. That's what I meant by ''whether it's acccurate or not.'' Also difficult to measure is the substitution effect. If they use research methods such as surveys to find the substitution effect, it's difficult to measure accuracy - a consumer's stated intention doesn't necessarily equal consumer's behavior.

As for the EEDC inflating the impact - well, the onus is on you to provide proof that they're not an objective party. I believe they found the impact in a study during the NHL lockout. As recently as the 2006, Stanley Cup Playoffs, when asked for an economic impact figure for the playoffs, they admitted themselves that it was difficult to calculate it

It's not. Just let some developers buy the land from the federal government, put some nice condos and boutique stores down, and leave me the hell out of it.

You honestly think that would create a more vibrant site than this proposed development site?


Downtown has lots of parking space? Where? Please share.


I don't have the quote on me right now [I'm not on my desktop], but I'll get it. However, keep in mind that games usually begin at 7 - there will be enough vacant parking spaces downtown at that time.

Or that the Calgary-Edmonton corridor isn't one of the wealthiest places in the world? Huh. That's news to me.

Re-read my point. Edmonton is not Vancouver, Toronto, Montreal. Surely you don't deny Toronto and Vancouver benefited from economies of scale with NBA teams in those markets.

This is also b.s. These guys are smart businessmen. They went to the public trough first. Why spend your own money when you can spend someone else's

I agree they are smart businessmen and are going through the public first - at the same time, didn't they have trouble raising 65M collectively to purchase the Oilers? Then, they borrowed another 35M.

I honestly don't believe the EIG can't afford to fund an arena themselves. These guys are rich, but hardly a major player in the group - to fund a 350M project by themselves is a bit too much to ask. I'm not arguing that they they should be left off the hook for any private investment.

If they were to finance it themselves, it would require major debt financing, and Edmonton is simply not capable of delivering the revenues to the extent that GM Place, ACC, etc. can. You'd see an Ottawa situation all over again.

PJO, can you tell me why there isn't vibrant economic activity around Rexall Place right now? There's an arena, a hotel, a couple restaurants, and a place where people can gamble. I know, I know, a racetrack isn't as ideal as a giant casino, but still. There's lots of parking, and it's only two train stops from Churchill Square. Aren't all those the prerequisites for booming economic activity? Why hasn't that area helped move us up the global urban food chain? Or the area around Commonwealth Stadium, for that matter, which is only minutes from the proposed new arena site?

It's on 118 avenue. Drug dealers and prostitutes in large numbers - in a economically poor neighborhood. Not to mention the class of the hotels and restaurants in that area are...poor.

As argued, an arena in COMNBINATION with other developments can provide downtown Edmonton with a key tangible feature point. Obviously, it will have to be done right - if the developments are similar in nature to the ones on 118 avenue, it's unlikely to deliver much of an impact.

Also, by your own admission, and Dan Mason's own admission, building the arena by itself doesn't make any economic sense. That is to say, you have admitted that its costs outweigh its rewards. So why include the arena at all? Why not just build more of the things that apparently do make economic sense? Isn't this a more sensible, and prudent thing to do? If the arena provides no economic benefit by itself, doesn't it stand to reason that it won't provide any economic benefit when surrounded by other enterprises?

...economic sense or not, a new arena will be needed sooner or later [whether it's 2014 or 2024]. In that sense, why not place in downtown that can improve downtown at a quicker pace then presently? Why not create a tangible feature point [that is properly done] in the heart of the city?

If all decisions were based on economics, no amount of money would be directed towards projects such as Jubilee Auditorium, Winspear, Shaw Conference Centre, and the 88M Art Gallery. Nor would taxpayers be partially funding the 600M long term River Valley improvements. Nor would other private companies such as Dell get massive tax breaks for opening a call center near South Edmonton Common. And the Fine Arts faculty at the Univeristy of Alberta wouldn't exist.

So I'm making a bold assumption that you've actively raised some massive hell for the above - perhaps on another forum.
 


That way, the visiting team won't even have to come to Edmonton to play the Oilers - they'll get a hotel in Nisku, practice at the arena, play the game at 7:00 and then connect to Calgary/Vancouver towards their destination after the game is over. Viola!

So the new arena...has to go downtown...so take advantage...of the economic benefits...of the visiting team going to restaurants? (Or are they supposed to go out and give $1000 bills to the homeless?)
 


Are they? If so, that would be the most unfortunate move -- its the exact opposite of every other league:

Well, you think all the new arena's being built are for shits and giggles? Why do you think teams are limiting capacity? Ken King was on the radio earlier this year, stating the ideal capacity is in the 16-17K range.

How do you think the Oilers revenues have increased over the years? You don't think raising the Gold ticket prices by $75 over the past few years has anything to do with it? Or the luxury box prices that nearly doubled in 2006?

The NHL has primarily been a gate-driven league in the past.

Things are changing.
 


At the risk of sounding like a free-marketer, why is my tax money wasted on that stuff too?

Well, that is the sense of community. Not everyone derives the same utility for each public good.

It is what it is.


I've got a proposition for you, PJO: I'll pay for what I want. You pay for what you want. If you can convince enough of your like-minded pals to pay enough per ticket to attend Oilers games, perhaps an NHL team, complete with brand new building, will be viable in Edmonton.

If not, nice knowin' ya. Thanks for the five Cups.


The problem is, under that type mentality, Rexall place would never have been built. Hence, you wouldn't be able to derive any sense of utility from the five cups that would never have been.
 


There was a venture where the government gave a private company millions of dollars of cash and land grants. Economic development ensued and the results were beneficial for the community, the province, and the country.

I'm scratching my head trying to remember more details.

Oh yeah.

The Canadian Pacific Railway.
 


...economic sense or not, a new arena will be needed sooner or later

One thing I don't get: how does thirty years suddenly make a rink unuseable?

How does the mere fact of the building being old make any difference? It's a rink, right? With NHL capacity (this was the knock on Winnipeg and Quebec City, btw)?

Early on the debate shifted from whether a new building is needed at all to a feasibility committee sniffing around Churchill Square asking where the thing should be built.

I still haven't heard much debate about whether Rexall is just truly run down and decrepit or just in need of a new ice plant or something. Northlands financial statements lead me to believe it's the latter.
 


One thing I don't get: how does thirty years suddenly make a rink unuseable?

How does the mere fact of the building being old make any difference? It's a rink, right? With NHL capacity (this was the knock on Winnipeg and Quebec City, btw)?


I think both the Winnipeg and Quebec City rinks were aiming for more luxury boxes, not more capacity.

-and that is what the EIG/Katz are going after. It's what largely generates revenues, and perhaps it will be a concern in say 5 years from now.

By the way, Rexall will be around 40 when the Oilers lease expires in 2013 or so.
 


The question was whether there's actually anything wrong with Rexall to begin with.

From a civic perspective (one that sets aside an owner making $10 million more each year of off 30-40 more luxury boxes), I want to know whether Rexall actually is run down or not. There are baseball stadiums almost a hundred years old.

Simply replacing the aged mechanical equipment, a cheaper alternative, has been dropped entirely as a solution.

Upon until now EIG has been all PR and no details. One question stands out and fails to get answered, even though it's just sitting there the whole time, press conference after: WHO THE FUCK IS PAYING FOR THIS?

In the meantime, the city of Edmonton has a decent arena, basically given to the team for free. If they want more: build it.
 


mike w: It's probably more the seating than anything else. Yeah, seats were replaced in the renovations a few years ago, but that didn't really address knee room/leg room/whatever you want to call it. The rows didn't change, just the seats. As it is, things are pretty tight for anyone over 5'6". Unless you're sitting next to a kid.

From that standpoint, it can feel cramped at a game. I can see why people going to Oiler games would want a bit more space. After all, with the on-ice product these days, there's not much reason to stand...

Climate control might be another factor. They didn't build Rexall with air conditioning/dehumidiers. The combination can make a difference to ice conditions...particularly if we ever play in June again.

Obviously the dressing room is top notch, so the whole place isn't falling apart.

Anyway, back on topic...

To me, taxpayer involvement has to be minimized. It doesn't have to be completely zero, but if it's significant, and contributes to the value of the team, the taxpayers deserve something in return. Some creative portion of the team (i.e. should it be sold, the City gets a piece). Some rent might be nice.

With an eye on minimizing things, Katz is prepared to write a cheque for $100 million. There's every chance he could finance an additional amount. Whatever schemes Butler and the EIG are alluding to would have to be available to Katz. Add in the $100 million, and obviously Katz ownership should mean lower taxpayer involvement.

Continuing on that front, construction costs tend to increase as time goes on. Assuming that sometime in the next 10-20 years Rexall needs to be replaced, the combination of getting started now, with Katz involved, seems the best way to keep costs down...and therefore keep the taxpayer tab to a minimum. The alternative is waiting, while construction costs go up some more.

(and no, I didn't read through the whole comment thread...so if someone already mentioned all this...my bad. Gotta get back to the game. GOIL)

- word verification: gnomo :-) Not sure why, but I find that funny.
 


It's on 118 avenue. Drug dealers and prostitutes in large numbers - in a economically poor neighborhood. Not to mention the class of the hotels and restaurants in that area are...poor.

Awesome. That's what I wanted to here. The area around the current arena is an economically poor area. Exactly. Thanks for playing.

As argued, an arena in COMNBINATION with other developments can provide downtown Edmonton with a key tangible feature point.

Oh, a key tangible feature point! Why didn't you say so? Where's do I sign up?

...economic sense or not, a new arena will be needed sooner or later

Again. Awesome. You've now completely abandoned your own argument. We don't need a "tangible feature point." We just need a hockey arena because the owners don't like the old one.
 


That's a weak rebuttle and completely missing the point Andy.

But please continue on with your rants RE: The new arena debate. They make me laugh.

Out loud

Everytime.
 


Are any of you cats watching tonight's game? What about Stoll's knuckler? I am currently trying to live with my new sad reality that it is 11:45pm here and we are starting the 3rd. Midnight Oil.

On the rink note, just be thankful it isn't and not in the plans to be 40 minutes from downtown in the middle of freaking suburbia like the Scotia Bank Centre here. What the heck is that?

hall-z
 


The people advocating replacing the Superdome in New Orleans had similar arguments. I'm sure that the city would have looked much better on the world stage as Katrina refugees trashed a state-of-the-art stadium.
 


Listening to Butler et al, the arena should apparently pay for itself. Great.

This shouldn't be a civic debate then should it?
 


Man do I love Rexall. I remember. the first four or five seasons, after the implementation of the smoking ban, I'd arrive at that building with a simple pack of markers, and attend any game I wanted, for free.

I also used to sneak a twelve pack into the building. When that became more difficultl, we'd jet to the liquor store beside the
INN between periods. Then I discovered that you could drink your 8 dollar beer, break the cup, and pour a little water on your sleave, and get a brand new one from a retailer by claiming you'd been crashed into in the stairwell.

I knew I found true love when a broad I took to game never questioned the entry means and got so into the free beer scheme that she could return with 2 refills, as opposed to the one I was able to muster. The one I let get away...

I also used to use the stairwell, no matter where I was seated, to enter the gold club. Sometimes I exited betweem periods through the boiler room, and other times out in the main level concourse where the opposing team made their way to their locker room. Jauque Lemaire has a soul crushing stare, BTW.

Either way, I'm sorta like Mudcrutch, in that I want a new building and don't care the means in which it's built. Except I live here in Stabmonton.

To conclude the most useless and uninformed response in this blogroll; haven't the majority of multi-use, hockey facilities across North America been erected through public funds?

Why must we suck so much?
 


That's a weak rebuttle and completely missing the point Andy.

What point? You haven't consistently made one other than, "an arena is coming, so we might as well just pay for one." Everything else you abandon. You came on here talking about how awesome Mason is, and how he knows all this stuff about the economic benefits of the "tangible feature point," and then did two things: a) admitted that the area around the current "tangible feature point" is piss-poor; b) decided it wasn't really about economics at all. No wonder you don't care about Mason's lack of degrees in economics and business. You don't have an economic benefit argument to this at all. You just want an arena because we are getting an arena. Don't lash out at me because you can't defend your arguments.
 


The Fact that Rexall is the NHL's 3rd oldest arena is indeed a legitimate concern - most NHL arena's have been constructed post 1995.

Ooh, it's a fact with a capital F.

It's also a Fact, or perhaps even a Phact, that no one at any stage of this debate has really cited anything wrong with the existing building. Aside from the seats being a little small for the 21st century's fat arses--but then, if you've ridden in an airplane since 1950, you can't possibly be naive enough to think the punters are going to be made more comfortable in a new facility with skyboxes stacked to the rafters. As for the idea that the old building's envelope won't allow for the construction of an ice surface that's competitive with glorious facilities like the one in Dallas... well, less said the better.

And here's another Fact: having a classic facility is often considered a selling point in other sports. This is just my opinion, but anybody who thinks that the building where Gretzky and Messier played should be blown up, and replaced with a facility indistinguishable from those in 27 other towns in order to attract tourism, is ineligible for any discussion that concerns marketing.

What did Sidney Crosby say when he came to Edmonton for the first time a couple months ago? Was it "God, this is a fucking awful place to play hockey, the fans must hate it"? Or was it "I'm filled with humility and excitement to be playing in this arena"? You could look it up.

You want to know what I consider a "legitimate concern"? The idea that sports facilities have a practical lifetime of 30 years and that the taxpaying fan, as a consumer of architecture, is just supposed to accept this. Anybody who thinks Edmonton "needs" a new hockey arena probably likes the Reebok uniforms too.
 


Well said, Cosh. An old building acquires the emotions of the people who used it, and I'm not even normally a granola-Berkeley-hippie. But something about Rexall makes me shiver when I go in there.

Edmonton (and Calgary, really) will always be backwaters. Location, location, location, and Alberta has none of it. If I wanted to live in a happenin' town, I'd move to Palo Alto or NYC. You put up a $500 million stadium, and we'll still be a backwater but with a $500 million stadium.

haven't the majority of multi-use, hockey facilities across North America been erected through public funds?

This is what sucks about Canadians. The arena building boom ended in the States five frickin' years ago, and now people are looking at catching the bug here. Reminds me of the junior high school kid that follows his big brother around to be cool.
 


http://www.edmontonchamber.com/pdfs/Special_Events/2008%20Events/SportConference2008-PromoForm-2.pdf
 


Wow. That looks like quite the conference. Learn to use words like 'synechdochic'! Use 'entrepreneurial' to describe something that presumably entails public expenditure! Thrill to the excitement of nonsense wrapped in magical verbiage!
Just reading the brochure reminded me how much I've been yearning to go to Indianapolis to see, uh, the city with the image that was overhauled with sport.
At least I'm not an Edmonton taxpa... I mean stakeholder.
 


And here's another Fact: having a classic facility is often considered a selling point in other sports.

I am traveling to New York this summer. I know of at least 5 other Edmonton-area residents who are doing the same (independently of each other, I may add).

The reason? A classic sports facility is being torn down, and we all want to watch baseball in the house made famous by Ruth and Berra and Mantle and DiMaggio and Gehrig. (At least two of us will also go see baseball in the place where the Beatles first played west of Crim Rocks and where OJ Simpson broke a rushing record not related to Ford Motor Company). Most strikingly, large numbers of people are very upset that they even have to make this pilgrimage, noting Yankee Stadium was rated to be good at least until 2025. If a building from 1923 is able to survive until 2008 (and projected to have been viable into its second century), surely by 1974 we could have made something at least able to hold games into its fifth decade.
 


A note from your “Gym Teacher”

Greetings everyone,

I have found this to be an interesting debate, and thought I would weigh in given that it appears that I have taken a position that many disagree with. I feel that there are a number of issues/views that have been associated with me that I want to clarify – then I imagine you will continue as usual! . I guess my greatest concern, and reason for writing, is I feel that my “position” has not been represented accurately at all here.

This is the first time I have ever posted on a blog, so I apologize in advance if this comes across as long-winded or seems out of place. I must admit that I am uncomfortable posting here as I am not used to hashing out ideas and arguments in this type of forum, and feel that many of you have developed an opinion of me and my work that has been gleaned from sound bites in the media and your varying values of my training. If any of you are interested in chatting with me further about this or anything else, feel free to call me at my office 492-6822, and we can arrange a time to speak or meet in person. Feel free to leave a message, as I may be in the gymnasium pumping up volleyballs, or supervising someone’s flexed arm hang or shuttle run times… 

Some of my comments in the media have been misinterpreted or taken out of context (by its readership), and others have been simply poor quotes on my part. I am still fairly new to this, as evidenced by my shock to see that I was the subject of a discussion on a blog like this. I feel that I am getting better at articulating myself in a way that can be extracted and deconstructed in very small portions, but as evidenced by how I am viewed on this board, that is not the case. Clearly I need to get thicker skin, but I also felt that I needed to clarify a few things here.

The quote I gave that was used in John Mckinnon’s column was not related to the arena directly. I hope that John does not mind me discussing this here – I want to make it clear here that John did not misquote me, it has just taken on a life of its own in this blog. We had a long discussion about the Oilers’ ownership issue, that led to talk about world class cities, and some of the research that I have been working on in Melbourne and Manchester. We talked about how great a city Melbourne was, and I was speaking to the fact that perhaps concern over the Oilers’ ownership issue was a reflection of a broader anxiety the city has over where it is headed, given its growth, etc. I would also be happy to chat with you about this.

The quote then led to its posting on Battle of Alberta, along with a slew of comments. To comment or clarify a few themes:

When first posted, Matt stated: “He seems to be posing that last statement rhetorically. If he took an actual poll of residents over whether they are more concerned about the pothole on their street or where Edmonton ends up in the global urban food chain (I'm not the only one laughing at this, right?), I think he might be surprised at the results, and needless to say, disappointed.”
For starters, I do apologize if that quote seemed over the top, but poor John had to speak to me for about 40 minutes before anything useful came out of my mouth, and I am sure he was doing what he could to at least salvage something from our chat. As I mentioned above, this quote was given in the context of growth and change in the city of Edmonton more generally.

Secondly, I have taken a poll of Edmonton residents addressing this issue specifically. It is part of a study that I have been working on examining sports facilities and other combinations of urban infrastructure and the public’s willingness to pay for it. Data collection has been completed (a phone survey using contingent valuation method), and we are currently in the process of data analysis. For those of you that are worried that my whistle or exercise ball might get in the way of the quality of this work, it is co-authored by the two economists who happen to be the leading experts on this as it relates to sports and CVM, Bruce Johnson and John Whitehead.

I don’t feel that it is appropriate for me to go through each comment to respond (however, my offer to chat about it over the phone or in person stands). For the purposes of disclosure, I have been involved in the process of considering a new or renovated arena for the past 18 months, in several different capacities. First, here are some points re: my position on a new arena for the Oilers in Edmonton:

1) To be leveraged by those outside of the team and the owners/operators, it needs to be part of a broader integrated project that generates both economic and intangible benefits to the community. It can be financed in a way that minimizes public $$$ and/or risk. The broader development can generate tax revenues to service any public debt. Feel free to look at the example of Columbus, San Diego, or the new Atlantic Yards project in Brooklyn. Again, feel free to call if you want to chat if you want more details. If you think I am making this up, contact Dr. Mark Rosentraub, who is a leading expert on this, or Dr. Andy Zimbalist, who prepared the report estimating the economic benefits of the Atlantic Yards project. Both of those professors aren’t gym teachers (one has expertise in urban affairs, the other is an economist). Both have been outspoken opponents of the use of public money to pay for sports facilities. Both will also tell you that, if done as part of a broader integrated project, economic and other benefits can be generated that justify a subsidy. I am not, and have never, speculated as to what that amount should be in Edmonton. I have only illustrated how it has been done elsewhere. Like you, I feel that anything that keeps my tax bill and ticket prices lower is a good thing.

2) It can be developed in a way that provides value to people who could care less about the Oilers. For example, half of the condo rental units in Atlantic Yards are earmarked for low and middle income residents. The developer is building an elementary school and daycare centre (out of pocket) as part of the project. Do you think that the users are going to watch Brooklyn Nets basketball games? No, they are going to be happy that the city helped Forest City Ratner acquire the land to put the development deal together. The state of New York is helping to subsidize the rental units as part of a broader low income housing initiatives. Does this mean that this project should not go forward because it is putting money into the pockets of the owner (who is the developer)? Could you now argue that this is a public subsidy of a billionaire pro team sport owner? Yes, but it would fail to acknowledge the complexity of the arrangement. The City and State have each also chipped in $100 million apiece. Does this seem to be a waste of taxpayer money? Does it provide more context when I say that the overall project is going to be $4 billion plus? That there will be 6000+ condos? I am not trying to persuade anyone that something is good or not. There will be those that think that this is worst thing to ever happen to Brooklyn. Others the greatest. You can substitute Edmonton here. You can say this blog has become a forum for this debate. However, I have never said what should or shouldn’t be done here, or who should pay. It is not my role to decide what should or shouldn’t work in Edmonton – that is up to taxpayers and city leaders, and others involved in the process. However, given my line of research, I do feel that it is my role to provide context.

3) In virtually every case where I have been quoted I have been discussing facility development in terms of how other cities have financed arenas or the context in which they have been integrated into larger infrastructure development projects. Again, I apologize if in the context that I have been quoted you received a different message. If you are concerned about my capacity to weigh in on this, I would be happy to explain what I feel my academic credentials are. However, I do not feel that this is the forum to do so.

4) Great cities have both potholes that are filled AND vibrant downtowns. I am not saying that this is an either/or issue; rather, I am saying that the discourse on the arena in Edmonton seems to be framed in terms of money that could be used to provide essential services (potholes) being taken away to pad team owners’ pockets. I am saying that if the project is conceived on a larger scale, essential services can be integrated into the project that benefit Edmontonians over and above team owners and hockey fans. Taxes can be generated from surrounding development that can service any public debt and also remove any burden from Edmontonians who do not support the project (for example, using a TIF).

To address some of the themes from the comments:

1) The backwater debate

Edmonton has clearly grown to become more than what many of its citizens and essential services are used to. That was the point of my Journal quote. The decisions that Edmontonians and its citizens make in the coming years are going to determine the direction the city takes. If Edmonton does not want to fill potholes, that is fine. If it doesn’t care about its image, that is fine, too. One of the issues that is swirling around Edmonton is the notion of revitalizing (or is it vitalizing?) its downtown. That may or may not involve an arena-anchored urban development project. If it does not, that is fine. I was only articulating that I felt that, given its growth and economic situation, this was likely to be a turning point for such decisions.

2) My credentials

I do not feel that it is appropriate to address this here. Clearly, that is an issue for many here, but I can live with my achievements and involvement in this line of research. I have had interactions with at least one person here, and he seems to be reasonably confident in my abilities (thanks for the support to this point, PJO!).

3) Feelings about the EIG

It seems that there are a lot of opinions about the EIG that are spilling over into the arena debate. People here seem to be fed up with the message EIG has given of community stewardship that conflicts with the profit potential of a new arena (and demands for any public subsidy). I have been lumped into a category of an arena supporter, but hopefully my discussion here has clarified things more. I am an arena supporter, under the conditions described here.

Another theme that is undergirding a lot of the debate here relates to infrastructure and world-class cities. The Londons, Tokyos, New Yorks, etc. do not need these types of projects (although most have them). However, aspirational and/or second-tier cities seem to, especially those that have relied on industries that are in decline (see US Rust Belt cities, for example). What makes Edmonton an interesting case is that, due to its current economic prowess, it can make these types of decisions not out of desperation like many post-industrial cities like Cleveland and Baltimore were forced to. To this point, this theme has been limited here to debates over economic impacts and tourism; I think it needs to be put into the context of what resources cities possess that make them places people want to live, work in, and visit (and companies to locate to, or remain in). No person or company will ever move to Edmonton instead of Winnipeg because there is an NHL team there. However, if you consider the presence of an NHL team as one of a bundle of resources that make a city desirable, the accumulation of amenities does make a difference. For Edmonton it would be the river valley, Fort Edmonton Park, the University. This may or may not include an arena. The issue becomes more important to a city that lacks resources that other cities possess, like a mild climate, etc. The survey I mentioned above addresses the value that individual taxpayers place on elements. I will be happy to share the results with you as they become available. However, I can assure you that I won’t be disappointed with any results that emanate from it.

A final theme:

The Conference

A quote:

“It drives me absolutely nuts that he is the Journal's favourite quotable academic on all things new arena. I guess that's what we're supposed to swallow as authoritative analysis in this town. And with the ECC 2008 arena conference coming up, which sounds like a complete arena love-in by the way, I have zero expectations of any media outlet in this town asking the hard questions when said conference occurs”

This comment was the one that compelled me to write. Anyone is welcome to form their own opinion regarding my competency, but to imply that I have an “arena love-in” agenda is untrue. The same person who posted that comment earlier provided a link to an article featuring Dr. Brad Humphreys. Dr. Humphreys is an outspoken opponent of stadium subsidies and has a world-class reputation (and is an economist!). He is also presenting at the conference!! The keynote is Dr. Mark Rosentraub, author of Major League Losers: The Real Cost of Sports and Who it paying for it. Why would people come who are opposed to public subsidies to a conference about this issue? Because the goal is to provide a forum for debate about this issue. I have been scheduled as the last presenter, so you can leave before then. The conference is not going to address issues in Edmonton – people here have a better sense of the context here and the presenters are not going to try to persuade anyone anything. The speakers have experience in other cities about what works and what doesn’t, and/or are top researchers with an understanding of how to evaluate these projects. The conference is open to anyone. We are working to try to make it available to those who can’t come. Please come to the conference. Feel free to make up your own mind. Ask the tough questions. That is what the conference was designed to do.

I really should proof-read this train-of-thought ramble, but I am taking my daughter to the Oil Kings game, and I feel guilty about taking an hour out her day to write this. If you've managed to make it through to this point, thanks for letting me rant…

Dan
 


To Andy's point of view, where he's rightly concerned about being tax-raped to make rich guys richer - I would again mention that Mandel has repeatedly said that public funding was off the table. So maybe we should start with the assumption that Mandel is on the level. If that's so, then I don't see what the problem is. And if Katz is successful in his bid to buy the team, then certainly he has the financial wherewithal to finance the entire thing privately. If he does, who would begrudge him for seeing the arena complex as a profit centre? If he takes the risk, then he should get the rewards.

I would also suggest that Alberta is a unique micro-economy. Both Calgary and Edmonton have waiting lists for private boxes. Alot of firms use them for tax write offs. Given that revenue possibilities have been pretty much maxed out, how else do you suggest meeting the additional cash demands of say a $60 million dollar cap? Raising ticket prices alone will certainly not do the job.

Alot of the fear here is a result of incomplete information. We aren't privy to what the city has planned. (Personally, I think this lack of disclosure is a big mistake.) From what I've heard, there's big development plans for downtown. Problem is, they won't go forward until developers get a sense of where the city is going. Mandel probably sees the arena as a catalyst. Once its a reality, others will commit to their plans and things will really start to happen. Think about it. Would you want to commit to a $100 million condo complex just east of city hall in its current condition? But if you knew the whole place was going to be a vital area 10 years from now, you'd be much more positive about breaking ground.

Lastly, I appreciate Dan's reply and quite frankly, I agree (mostly) with his point of view. However, I disagree with his thought that we should be asking the hard questions. I think its the job of the MSM to ask those questions and post the answers in a public forum where everybody has access to them. Its what they used to call "news". As long as big players have the comfort of not having to be publicly accountable for their words or actions, you'll get clowns like Butler spouting off anything they think we want to hear to cover their tracks.
 


I have to say I appreciate Dan Mason coming here and speaking on this topic with such a detailed post. If what he says is accurate, the following is true:

1) Stand alone arena provide little economic benefit
2) A much broader project including an arena can provide a major economic benefit.

The question becomes, then, as Andy stated, does such a broader project require an arena? Would the cost/benefit ratio of such a project be better with an arena or without one? I think it's possible that an arena would help provide a certain critical mass to get such a project going, and there may be synergistic opportunities that can be exploited. However, I would like to see some evidence that this is actually the case.

I hope this conference will provide some answers and I would think that most people interested in this issue (i.e. those who frequent the oilogosphere) would be excited by the prospect of this conference happening in Edmonton. It's unfortunate that Zimblast couldn't make it as he seems to be one of the leading researchers in the field of sports economics. I don't know if I can afford even the discounted student rate to attend this conference, but I hope that the information presented will be available in some other format.
 


Thanks for the detailed post Dan. I can also vouch for Dan's credibility taking the Business of Hockey class 2 years ago.
 


Nothing like the actual author of a quote coming in to squash a straw man, is there?
 


To clarify: The straw man being the position originally being attributed to Mason, not a new straw man being made by Mason ;)
 


How about that - way to put Andy in his suckhole there Dan!
 


The Canadian Pacific Railway.

Wow. That's got to be one of the biggest, fluffiest straw men I've ever seen. I'd almost feel guilty trying to swat it down.

By the way, Rexall will be around 40 when the Oilers lease expires in 2013 or so.

The Forum was over 70 by the time they turned it into a motherfucking shopping mall, and it was still a viable NHL building. Shit, there's grumblings of replacing the Saddledome here in Calgary (what Edmonton has, Calgary must, too, and vice versa -- like two little kids), and it's nine years younger than the Coliseum, and has received constant upgrades, including a new scoreboard last year, and new boards and lower-bowl seats this year.

Obviously the dressing room is top notch, so the whole place isn't falling apart.

I love how they spent $4M on that dressing room if they just want to blow the place up in seven years' time. How much are ice plants, anyway? More or less than $4M?

I don't know if I can afford even the discounted student rate to attend this conference, but I hope that the information presented will be available in some other format.

I know the proceedings from some conferences wind up getting compiled and published, and can be accessed through a University library or online through a University's subscription to a journal or other full-text service. Both would require University employment or studentship, of course, but I think it'd be possible.

As for Dr. Mason's appearance in the thread, the grumpy references to "gym teacher" were a bit unprofessional, but it was certainly enlightening to have his position laid out like that. I'm interested to see how the debate proceeds from here (hopefully with more than the string of "I told you sos" coming out of the pro-arena crowd's mouth so far).
 


I love how they spent $4M on that dressing room if they just want to blow the place up in seven years' time. How much are ice plants, anyway? More or less than $4M?

The number was closer to 3M according to Lowe himself.

And, it's not like they can't move the TV's, Gym equipment, etc. to the new building.

The Ice Plant is rumoured to cost 10M.
 


And, it's not like they can't move the TV's, Gym equipment, etc. to the new building.

Yeah, but that's not what cost most of the $3M, I suspect.

The Ice Plant is rumoured to cost 10M.

So would it be financially prudent for Katz to look into doing this as a stopgap until he can find an appropriate time/place/method of payment for the seemingly inevitable new arena? I mean, if he's willing to invest $100M in new construction, surely he'd be willing to look at $10M in avoiding groin injuries and extending the life of the building, if he can't find a way to replace Literally Crush by 2013.
 


The Ice Plant is rumoured to cost 10M.

Not even close to that. I guarantee you that system could be done for under $1MM, plus the cost of replacing the ice slab.($200k??)
 


I guarantee you that system could be done for under $1MM, plus the cost of replacing the ice slab.($200k??)

See, I thought $10M was way over the top, too, but I had no data to back me up, so I decided not to bother.

And that anonymous 'tard who compared the new arena to CP Rail still hasn't defended his asinine, superficial comment.
 


Doogie, I think the reference to "tards" is unprofessional. I realize you are probably unconcerned with such matters, but your lack of concern gives me concern.
 


Sheesh!

May as well recant while you are able Doogie. I got caught with this over at CinO. Must be some sort of PC RSS feed/notification out there.
 


See, I thought $10M was way over the top, too, but I had no data to back me up, so I decided not to bother.

I tendered a larger arena ice plant system than the one required at Rexall less than 6 months ago and two of the bidders were based out of Edmonton.

I can say with all confidence that my numbers are close and can't give you anything to back it up.
 


May as well recant while you are able Doogie. I got caught with this over at CinO. Must be some sort of PC RSS feed/notification out there.

The Oilogosphere has a command centre for these kinds of things. You should see our uniforms!
 


Yeah, but just building an ice plant by itself isn't an economically justifiable course of conduct. If you're really going to leverage the ice plant, it needs to be the centrepiece of an entire waterpipe revitalization plan. You get great ice out of it sure, but you put in toilets that never need to be flushed twice because they've got wide pipes. Sure it costs more but the income taxes generated by people no longer having to spend as much time on the crapper, flushing multiple times, is phenomenal. That's how you end up spending $10 million bucks.

Oh, and there's a casino involved.
 


But do we really NEED an ice plant as the centre of the waterpipe revitalization? Or is it a thinly veiled plan to help a few over-paid hockey players skate better at the expense of the greater community?
 


David S: Stop being such a tard, start being a professional, and read the previous comments post Mason.
 


I can say with all confidence that my numbers are close and can't give you anything to back it up.

By no means was that a criticism. I just meant that I literally had no idea what an ice plant cost, so I could neither agree nor call bullshit.

May as well recant while you are able Doogie. I got caught with this over at CinO. Must be some sort of PC RSS feed/notification out there.

I fear no basement dweller with too much time on his hands and no interest in debating a real point in favour of picking on, at worst, a mildly unfortunate choice of insult. (Unless it's actually a chick with too much time on her hands, and the uniform Mike W refers to is...er...yeah.)

Anyway, it's not technically ad hominem, but it's not a real argument, so...still waiting, Anonymouse. (Unfortunately, I don't see a recantation of the straw man coming, as it seems this comment thread has degenerated into inanity. Amusing inanity, but inanity just the same.)
 


Relax. I think the boys get a bonus (or new uniforms) for reaching the century mark in the comments section. Just doin' my part.

More hockey, less connect2edmonton...Attended the game tonight. Man, I tell ya, the boys looked pretty good tonight. Really nice to see. They got a standing O at the final buzzer.
 


and the way it's perceived on the global stage."


If thats really the problem then we shouldn't be building a new hockey rink, we should build a giant indoor Soccer stadium and put a race track around it as those are the two biggest "global" sports.

The only people that care about Ice Hockey are a few Hosers from the Great White North, its certainly not "Global".

I have no problems with building a new stadium if the freaking owners pony up the cash and pay for it themselves.

Why on earth should taxpayers fork over HALF A BILLION DOLLARS so some fatcats can charge us $200 a game to watch bad hockey and not have to pay any rent?

Talk about sticking it to us from both ends...
 

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