Thursday, July 22, 2010

 

Cost certainty

The chatter continues about Ilya Kovalchuk, cap circumvention, and lifetime contracts with phony-baloney years tacked on to the end, but amazingly, that’s not the biggest CBA failure that was exposed this week. That happened yesterday, when Oilers owner Daryl Katz stood up in front of Edmonton city council and informed them that hockey-related revenues are not sufficient to operate an NHL team sustainably.

The NHL and its owners locked the players out for a full season because of the critical, non-negotiable imperative that player salaries needed to be indexed to league revenues. This isn’t just something I read into Gary Bettman’s public comments, or something that I assumed but was never stated. This was drilled into the fans over and over by Bettman and Daly, by numerous owners, and by sympathetic media. Cost certainty. Salaries would track revenues, down to the dollar.

Lots of other teams may receive concert revenues or operate non-hockey businesses, but the success or failure of those ventures do not impact player salary expenses – which are contractually determined by hockey-related revenue only – nor other hockey expenses like executive salaries, scouting, travel, etc. which clearly have no relationship to (e.g.) concert revenues.

It's just so bloody galling. I never for a second believed the lockout fairy tales about more affordable tickets, nor did (do) I think the 2005 CBA was good for the league as a whole, on balance. I thought I had a healthy amount of skepticism towards the motives of the very wealthy & successful people who own and run the NHL. But in 2005, I never would have anticipated an owner coming out and saying, Hey, sure we had a year-long lockout to limit player costs to a fixed percentage of hockey revenue, but that doesn’t mean hockey revenue is sufficient to run a team.
**********
Katz Group chief financial officer Paul Marcaccio said owner Daryl Katz has subsidized the Oilers by several million dollars in each of the last two years because revenues are too low.

Unlike other NHL clubs, they don't receive concert and other non-hockey revenue from their home at Rexall Place, he said.

"If professional hockey in Edmonton is going to be sustainable, something has to change, regardless of who owns the team," he said.

"Many factors, such as the size of our market, cannot be helped ... Others can only be addressed by a new arena and having the same operating model as the Calgary Flames and all other NHL teams."

Round and round the mulberry bush. In conclusion, if you went to bat for the owners during the lockout, now would be a good time to hang your head in shame. Also, if you picture the "several million dollars" in the first quoted sentence above as "exactly 3.75 million dollars", it's good for a laugh.

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Wednesday, July 21, 2010

 

Why Downtown?

For any who are interested, I will now be writing about the downtown arena project at Why Downtown? This way, I can stick to talking about hockey here, just like so many of you asked...

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Tuesday, December 15, 2009

 

Survey Says!

These are interesting. I don't know who sponsored the survey, and who else it has been sent to, but these three questions were sent to me by someone who had taken the survey. The survey was administered by a company named e-Rewards, a company out of Texas. The only information provided was as follows:

"Topic: Study About Consumers
Research Sponsor: A Valued e-Rewards Partner"

That's it. I'd be interested in hearing what others think of the questions. I think a large number of them are pretty leading, but I also haven't seen the entire survey. Maybe it balances out.


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Thursday, December 10, 2009

 

The More You Know

"We're still far from having a hockey team," Charest warned.

"We would need a multi-purpose centre and I believe in that project because a city of Quebec's size needs a multi-purpose building."

But one prominent sports economist suggests that if the project were truly smart economics, private investors would already be lining up to build the arena with their own money.

Michel Poitevin, head of the University of Montreal's economics department, notes that the Montreal Canadiens were purchased, and their Bell Centre was built, without public funds. So was the city's Saputo stadium for the Montreal Impact soccer team."
--"Quebec premier says NHL commissioner keen on team in Quebec City," Canadian Press


Bold mine.

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Tuesday, November 10, 2009

 

Don't know, but if, then totally

"And while it's far too early to know whether Darryl Katz's dream-arena plan will go ahead, if it does come to pass, it will be vital to have an LRT line running straight from West Edmonton Mall to the new arena site."
--Paula Simons, Edmonton Journal


Um, okay, I have a question. Why? Why is a straight line from WEM to The Katz & LaForge World-Class Wonder Emporium™ "vital?" I mean, vital is a pretty serious word. Synonyms include "essential," "paramount," and "imperative." So when I see a journalist suggesting that level of importance to a public transit line running from a mall to a hockey rink-- a hockey rink that doesn't even exist, and if it does, with all its apparent city-healing powers, will likely cost taxpayers so much money that it will prevent some of those very same public transit lines from being built--I have to ask, really? It's that important? That crucial? So important that to think otherwise is unfathomable? Why? Because we'll need to get people from one big casino to another? Because people will be pissed if they can't get from Bootlegger to box seat in under twenty minutes? Oh! Oh! Is it because doing so will rejuvenate, rehab, renew, restore, refresh, refurbish, regenerate, reinvigorate, revitalize, and revivify the downtown core, transforming Edmonton into a shiny, shimmering, utopian metropolis ? Is this the case? It is, right? Okay, then. If you say so.

I'm agnostic about a line going to WEM. If it's the best place to end or anchor the line, so be it. But I'm pretty certain that building a straight line from there to a new arena isn't the best course of action. And it's definitely not vital. For one, the arena doesn't exist. Second, it never should, if it means taxpayers have to foot the bill. Third, as Patrick LaForge has noted, there will only be 90 hockey events there every year. Even if you scatter in another 75-100 events throughout the year (and I am being generous), the reality is that the "anchor tenant" (I'm assuming the full-blown Wonder Emporium™ will be the course of action, because it's the best way to trick people into supporting the public funding model) will be full less than half a year, every year, and even then only for a few hours at a time. Why would you build a straight line to a destination that, in the grand scheme of things, no one goes to? Because there'll also (supposedly) be a casino, some shops and some housing around it? There's lots of places like that (shockingly, they didn't need an adjacent arena and public funding to get built). Are we going to say it's vitally important to build straight lines to all those places, too?

Listen, I'm all for more public transit. And I'm all for public transit that takes people where they actually need to go. As with most cities, getting people in and out of our downtown core in an efficient, expedient and environmentally-friendly manner makes sense. Heck, it's important. What isn't important, however, especially not vitally important, is getting that public transit line to go straight from a mall to a proposed hockey arena, particularly when it's motivated by the unsubstantiated and therefore misguided belief that doing so will revitalize or save a section of our city. This simply will not happen. An LRT line will move people from place A to place B. You want each place to be an optimal destination. A new, publicly funded hockey arena will make Daryl Katz even more wealthy than he already is. You'll probably think it's cool. If those are your points, or your goals, then great. But let's just leave it at that, and save the vitally important words for the vitally important matters.

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Wednesday, October 07, 2009

 

Thought for the Day

From a piece by Chicagoan Steve Chapman, Chicago Wins By Losing: Why losing the Olympics is a blessing in disguise for the Windy City:
Here, as elsewhere, public opinion does not always matter. When the mayor and assorted corporations and interest groups line up behind something, even a grandiose vanity project, it's a good bet they will prevail over petty malcontents.

Insightful? Not particularly. True, and well said? Yep-per.

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Friday, September 04, 2009

 

Stuff we can agree on

Northlands showed it is Edmonton's "sports and entertainment complex experts" after Rexall Place was ranked 10th in the world for concert and event ticket sales, an official with the non-profit group says.

What conclusions are reasonable to draw from this? I think there's a couple:
  1. Rexall Place is, at the least, a good concert/event venue
  2. Northlands is, at the least, a competent venue manager
Based on such a high standing, it would seem awfully hard to argue that Northlands is enjoying tremendous success despite a lousy facility (making chicken salad out of chicken shit); likewise, it would be hard to argue that people are packing the place despite barely competent management by an out-of-touch quasi-government agency.

Which brings us to Pat Laforge on Monday... when asked about the future of Rexall Place, he said:
"Our lease expires in the spring of 2014. ... We're a tenant here and we don't own the building so I can't offer speculation on what might happen to it. But it's been a great building and it still is."

David Staples translated this to mean (and Jonathan Willis seems to agree), "Not our problem".

But whether Staples and Willis are misinterpreting, or Laforge is being disingenous (No!), it clearly is an issue. Whatever scenarios exist for a new downtown arena being successful and profitable (or, self-supporting) involve the migration of all the concerts and a bunch of the other stuff from the old place to the new place.

There's a non-zero chance that, in the event of a taxpayer revolt (and a credible election threat to the mayor), the Oilers press on with the project through private financing. But this non-zero chance drops to zero-point-zero-zero if it's premised on competing with Northlands and the existing building for concerts and other non-hockey events. The abandonment (/demolition) of Rexall Place isn't a side effect of a downtown arena plan; it's a necessary element.

Which brings us back to the Are We Sure This Is Necessary question... I think the proponents and fans of a new downtown arena have done a pretty poor job of explaining why it's necessary, or alternatively, worth it, to abandon Rexall Place.

**I don't think there's any question that a new place would have dozens of features to recommend it over Rexall Place, but if you agree that money talks, customers aren't dissatisfied with Rexall (see top).

**I got the impression before I moved here that it might as well be out in Kanata, but jeez, it's 2 LRT stops (5 minutes) from the east end of downtown, and maybe 10 minutes from the west end/legislature. It's about as handy to downtown as you could want without being within walking distance.

**The CFR -- Rexall's 2nd most important tenant and a genuine boon to the city's economy -- is very likely to bolt for the Stampede grounds if "shuttling cattle back and forth downtown proves to be too complicated and costly". I'm not a logistics guy, but I sense that this would be a major challenge.

**And, I mentioned that I'm not a logistics guy, but even maintaining the existing level of concerts and events at a new downtown location won't be easy. There are no arterial roads to speak of near downtown Edmonton. Just given the price and availabilty of land, blacktop for parking and access around the new place will presumably be limited. But of course it's not "just given" that; the whole idea is to have lots of development around the arena, not lots of development around a 200m strip of asphalt around the arena.

Here's a couple of pics I snapped from the window of the Coliseum Inn, at about 9AM on the morning of a Rascall Flatts concert (after an Oilers game the night before).



Approximately 20 tractor-trailers and 10 Maddencruisers, all told. The difficulties in organizing something like this downtown are not at all insurmountable. That said, every square foot of space surrounding the building that's used for accommodating major concert acts and the like is a square foot that's not being used for the vitality (re-vitality?) of the surrounding development of retail, housing, etc. And as such, it must be acknowledged that the new plan has what everyone besides politicians call "tradeoffs".

Or, we could just pretend that the new place will be fairytale perfect, featuring everything you like about the old place, plus a reasonably-priced restaurant you like a few steps out the front door, and plenty of open urinals at intermission.

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Tuesday, September 01, 2009

 

Sound and Fury

"We found that the mainstream media in most of these cities is noticeably biased toward supporting publicly financed stadiums, which has a significant impact on the initiatives' success.

This bias usually takes the form of uncritically parroting stadium proponents' economic and social promises, quoting stadium supporters far more frequently than stadium opponents, overlooking the numerous objective academic studies on the topic, and failing to independently examine the multitude of failed stadium-centered promises throughout the country, especially those in oft-cited "success cities" such as Denver and Cleveland."

--Rick Eckstein, Philadelphia Enquirer


"Tremendously reassuring was LaForge's return, time and time again, to the rhetoric of making Edmonton great, emphasizing downtown revitalization, going on about improving the city. Which means that the development will strive to fit in and complement downtown, that the esthetics (or the "look") of the arena and surroundings won't be sacrificed on the altar of cost-cutting.

I'm convinced that lifelong Edmontonian Katz wants to leave a lasting legacy."

--Graham Hicks, Edmonton Sun

Ahem.

Some links from the past few days.

New Oilers Arena Underway--Gordon Kent, Edmonton Journal
Much Ado About Nothing--John MacKinnon, Edmonton Journal
Progress on Arena--Unsigned Editorial, Edmonton Journal
City in Dark on Arena--Frank Landry, Edmonton Sun
Patience is Key to Worthwhile Arena--Graham Hicks, Edmonton Sun
Despite Funding Questions, Edmonton Oilers Proceed With New Downtown Arena--Canadian Press
Arena Could Leave Poor Our in Cold, Advocates Say--Richard Warnica, Edmonton Journal
Edmonton Arena Developments--Brad Humphreys, International Journal of Sports Finance
Columbus a Model for Edmonton?--Scott Hennig, Canadian Taxpayers Federation
Katz Plan Should Go Ahead, But With Strict Conditions--Scott McKeen, Edmonton Journal

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Monday, August 31, 2009

 

Downtown Arena Primer

I'm going to place a link to this post in the left sidebar, and will continue to update it as time goes on. That way, people can come to the site, click on the link to the left, and get their hands on everything we have posted here.

This is, to my mind, the most comprehensive gathering of information and opinion around on the proposed downtown arena. Most of the opinion is mine, and therefore reflects my viewpoint (which is in opposition), but there are invaluable contributions, from both sides of the argument, within the comment sections of each post. There are also a large number of links to newspaper articles, academic articles, and other items within those posts. I encourage all to read through what is provided here, and to share it with others. I also encourage everyone to look for other sources of information on this issue. Like I said, these opinions are mine. I make no qualms about having them, believing them to be clear and rational, but I do encourage everyone to seek out other voices and opinions in making a determination on where they stand on the issue.


Arena Powerpoint



Downloadable Documents
These two documents were created to supplement the powerpoint presentation above, and have been updated to include the most recent announcements. They will continue to be updated as events transpire.

21 Key Arena Posts

Complete List of Arena Posts

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Sunday, August 30, 2009

 

Arena Press Conference

The Edmonton Oilers and the Katz Group will hold a press conference Monday morning at Rexall Place with an update about the proposed downtown arena development.
--Edmonton Journal


This should be interesting.

***Update*** Nope. Not interesting at all. It was a press conference about nothing.

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Thursday, August 27, 2009

 

Will Anyone Say No?

"We would not use current city taxes to build the arena.”
--Mayor Stephen Mandel


Emphasis mine.

Two new articles on the proposed downtown arena appeared today, one by Graham Hicks of the Edmonton Sun, the other by Gordon Kent of the Edmonton Journal. Both emphasize the fact that the mayor and his arena "feasibility" committee would still like taxpayers to foot the bill, despite consistent and overwhelming evidence that it's not in the best interests of taxpayers to do so, as well as recent polling that shows that 76% of Edmontonians do not wish to have their tax dollars used in this fashion. The fact that the mayor and his committee continue to ignore the evidence and the will of the electorate on this issue isn't terribly surprising. They've been doing so for almost three years now. What is so baffling is the fact that no one else on City Council has stood up and loudly proclaimed their opposition to the idea. The idea makes no sense economically or, as the polling suggests, politically. It's an idea disliked by people on both the left and the right of the political spectrum. So where are the champions of both common sense and the people? Is anyone on council going to have the courage to make this their issue, and say this is a bad idea? As one of those 76%, I certainly hope so.



p.s. For those who have asked, yes I coming back, and yes, I will be writing hockey-related Oilers content again, and soon.

p.p.s. Confirmation that the Katz Group has indeed purchased the land around the Baccarat Casino.

p.p.p.s Another story in today's (Friday's) Journal. Uses a lot of the stuff from the Kent article above.

***Saturday update***
Another story, focusing on the Community Revitalization Levy (CRL).

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Sunday, August 23, 2009

 

Good News and Bad News

Good news:

Three quarters (76%) of Edmontonians ‘disagree’ (46% strongly/31% somewhat) that ‘The City should provide taxpayer’s money for a new Hockey Arena. With nearly one half strongly disagreeing with this notion, it is unlikely that further debate on the issue would make them more receptive of the idea.

Very interesting breakdown here.

The bad news? Oilers fans have to watch this lineup starting October 3rd.


***Update*** Professor Brad Humphreys has posted some quick thoughts on the International Journal of Sports Finance blog.

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Wednesday, August 06, 2008

 

Hockey draft?

This is good stuff.


The good people at the Canadian Taxpayers Federation have done us a great service, and obtained (via FOIP requests) some early drafts, c/w edits, of City Shaping (the report from Edmonton's poorly named Arena Feasibility Committee). Pictured above is a hand edit from Northlands volunteer Lyle Best, deleting an unwanted reminder that the last four NHL arenas constructed in Canada were all 100% privately financed.

I don't think anything that the CTF found (release and wonderfully illustrative pdf links here) will come as a huge surprise to readers of this site. However, it's always good to be reminded just how narrowly the plan's proponents want to frame the debate, such as it is.

At left we have part of an early draft that attempted a higher level of intellectual honesty: telling us that the last 4 rinks were built with private dough, and then explaining why Edmonton, in 2008 and beyond, is different (what with modern creative financing models, among other things). The final report scrubbed the whole discussion of Canadian comparables, preferring to focus on U.S. cities (or to use the report's phrase, "U.S.-based cities") and facilities whose funding and development models more closely match the Mandel/Best/etc. vision. Surprising, no; disappointing, sí.

A filet mignon on a flaming sword goes out to Scott Hennig and the CTF for their instructive research here; you can support this and other similarly fine work by going here. Lastly, you should check out their blog; today Hennig introduces all this stuff, and also has links to the unreleased HOK Sport report ("heavily redacted") and the Convention, Sports, and Leisure International report, neither of which I've checked out yet.

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Tuesday, July 22, 2008

 

Horse Race Reporting

It's been a while since I ragged on David Staples here, so I don't feel bad pointing out how irritating the opening paragraphs to his Sunday post on Edmonton's downtown arena debate are:
The big stick used by opponents of the downtown Edmonton arena project to bash the proposed project is the notion that taxpayers are going to have to foot the bill for this rich man's dream.

The anti-rink faction argues that no public money should be used to build a money-making machine for a billionaire owner and his multi-millionaire players, not to mention fancy and exclusive seating arrangements for the wealthiest fans.

It is a popular argument, and if the debate over the downtown rink gets framed mainly on those terms, it will also be a winning argument. So it will certainly be a reasonable tactic of opponents of the arena to press this message.

This is so... backwards. Perhaps Staples is overly influenced by his experience covering criminal trials, where the defense lawyer's interest in proving his client "didn't do it" -- even if legitimately innocent -- is quite secondary, or peripheral, to the imperative of getting him acquitted.

I'm confident that I'm not putting words in Andy's mouth when I say that his position does not boil down to Nay Now, Nay Tomorrow, Nay Forever (not in a box, not with a fox, etc.). He doesn't rail against tax money for millionaires because he's against a downtown arena; he's against a downtown arena because it's tax money for millionaires. He's against decommissioning and demolishing a perfectly good facility that taxpayers already paid for.

As far as I know, Andy isn't trying to get elected to local office; nor are Lord Bob, Art Vandelay, or the many many others in Staples' "anti-rink faction" who comment here. In other words, they're not staking out a politically popular position, then bolstering it with whatever "tactics" poll most favourably. They're actually against using taxpayer's money to build a downtown arena.

If Darryl Katz announced tomorrow that he was going to finance the development privately, and that the only thing he expected from the City was the same concessions & accommodations in terms of infrastructure that all commercial developments get, credible opposition would pretty much evaporate. You'd have no one left complaining but the usual gang of idiots who are annoyed when a Rich Man spends his own money on what the Rich Man wants to spend it on rather than what they want him to spend it on.

"...no public money should be used to build a money-making machine for a billionaire owner and his multi-millionaire players, not to mention fancy and exclusive seating arrangements for the wealthiest fans." -- that's not an argument to advance a position; that is the position.

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Friday, May 30, 2008

 

Canadian teams, including Oilers, doing just fine

"At $1.2 million in ticket revenue per game, the Oilers and Senators garnered the least amount of ticket money among Canadian clubs."
--Rick Westhead, Toronto Star


Don't let any Arena Truther out there tell you otherwise. This, and only this, is why the Edmonton Oilers want a new hockey facility. Which is cool, as long as they pay for it all themselves.

PDF of the NHL's 07'-08' Ticket Revenue list here. Mirtle has more on the Westhead story here, and there is some good stuff in the comments. I find the stance of the new NHLPA head to be especially interesting.

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Wednesday, May 28, 2008

 

It's Tradition!

"It's not too often you come to a historic place like this. I think everyone enjoys being here, and we grew up watching some of the teams that have won here," said Sidney Crosby, who was 9 when the Wings won their first Cup at Joe Louis. "There's not too many older buildings left. And to be here and at the Mellon it's pretty unusual."
--Associated Press


You had to know I'd return with an arena story, right? Of course I would! I couldn't help it, really, as the story touched on some of the points I've made before.

Interestingly, if the Wings or Penguins win the Stanley Cup in Pittsburgh, it will be the first time the Cup has been awarded in Mellon Arena. The Penguins won their two previous Stanley Cups in arenas that no longer exist (Chicago Stadium and the Met Center). If the Cup is awarded in Joe Louis, it will be the third time that has happened (same as Nassau Coliseum). The Stanley Cup has only been awarded more in one other existing and in-use stadium. That's Rexall Place.



**Because you never see them bunched together, you never do get a complete sense of how ridiculous the names of sports arenas have become. They are just brutal. Jobing.com Arena has to be the worst arena name in professional sports, right, along with maybe Quicken Loans Arena in Cleveland? We aren't exactly talking "The Polo Grounds" or "Boston Gardens" here.

Source: Wikipedia

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Wednesday, April 02, 2008

 

Arena Stories

Here's some recent stories/editorials on the arena issue. I'm still mourning the Oilers elimination, so I don't have much to add in terms of comment. I just wanted to throw these up before they became dated. I will say that the Diotte April 1st story is pretty damn funny, and the Libin article is pretty damn damning. If anyone has seen/read other stories, pro or con, that I might have missed over the past week, feel free to drop a link into the comments.

"Edmontonians being sold a vision" --Kerry Diotte, Edmonton Sun

"Put arena to referendum" --Andrew Hanon, Edmonton Sun

"April 2nd Letters Section" --Edmonton Journal

"River valley sites touted for new arena" -- Kerry Diotte, Edmonton Sun

"Detractors of new Edmonton arena wasting their breath" --Kevin Libin, National Post

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Thursday, March 27, 2008

 

An Arena Response: Letter #3

"If we do (build a new structure), we need to be creative and not burden the taxpayers."
--Mayor Stephen Mandel, December 22nd, 2006


"We're not going to burden our taxpayers with a $400-million or $300-million debt to have a new facility. That just won't happen."
--Mayor Stephen Mandel, February 22nd, 2007


As for who is paying for this new arena, Best, Bouma and Mandel all indicated that taxpayers will have to chip in for at least part of the cost. "But I don't want it digging into taxpayers' pockets all the time," Mandel said.
--Mayor Stephen Mandel, April 24th, 2007


"As I've said hundreds and hundreds of times before, we just can't afford to take our municipal tax dollars and put it into an arena."
--Mayor Stephen Mandel, December 15th, 2007


"I've said it a hundred times and I'll say it another hundred times, we're not going to raise taxes to pay for this."
--Mayor Stephen Mandel, March 26th, 2008





Dear Mayor Mandel,

In the future, sir, please don't advocate for a downtown arena, and then deny that you've advocated for a downtown arena. Please don't set up a "feasibility" committee, and then send us back a empty document as a report. Please don't load up that committee with a bunch of people who are tied to the team and ownership, and then pretend like the outcome isn't pre-determined. And please don't expect, sir, that I'm going to be pleased with the idea of using public funds to build your legacy project.

You may have said it a hundred times, Mr. Mayor, but I haven't believed you once. Can you see why?

Sincerely,

Andy Grabia

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An Arena Response: Letter #2

"Make it a shrine" -Kevin Lowe


Dear Mr. Lowe,

We already have a hockey shrine in Edmonton. It's called the Northlands Coliseum. You might remember it. You won five Stanley Cups there.

An arena without a history of accomplishment is not a shrine. It's a mall with seats.

Sincerely,

Andy Grabia

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Wednesday, March 26, 2008

 

An Arena Response: Letter #1

Dear Mr. Katz,

If you would like to build a new facility for your private enterprise, more power to you. Just don't ask me to subsidize it through public funding, because:

a) you've got the money to pay for it yourself;
b) there's little to no economic benefit to me as a citizen to support your venture;
c) my quality of life as a hockey fan will not be lessened by the team's continued presence in the current Rexall Place. In fact, as I have stated before, it will only be enhanced.

Thank you for your time and consideration. I hope your hockey team kicks the shit out of the Wild tonight.

Sincerely,

Andy Grabia





Required readings

"Arena Feasibility Committee releases its brochure" --Covered In Oil

"If you build it, they will come. Or at least Mayor Mandel will" --Colby Cosh

"And another thing!" --Colby Cosh

"Wednesday Baseball Standings" --Matt Fenwick

"Shell game hides taxpayer contributions to new arena"--Scott Hennig

"Did Alberta Taxpayers fund the Oilers Dressing Room Renovations?"--Punjabi Oil

"In Alberta arena debate, the AY story gets mangled" --Atlantic Yards Report

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