Saturday, October 23, 2010

Smells like urena

Even though the election is over, it seems the public may have made a difference in Edmonton. City Council is hosting four public open houses to provide information and a dialogue about the Arena. But let's take a look at the numbers first, shall we?

The estimated cost of renovating Rexall place is $250 million, and the result is that Edmonton has a refurbished arena. A new arena is estimated to be $450 million, with $100 million coming from the Katz group and $250 million coming from ticket taxes and a "revitalization" levy. ($100 million is also pledged from Katz to be put into the surrounding community.) This means that if we can find 100 million, Edmonton can have a new arena. Functionally, we get a new arena for the price of half of Rexall refurbished.

Some people are wondering why Katz would pledge  $100 million to go into the surrounding area, instead of Edmonton simply putting that money towards the arena (since the funding model is short exactly that much) but it's a form of leverage; the investment is likely to come back to the new arena in the form of increased traffic, which is much more sustainable (You know what they say, feed a man and you feed him for a day, teach him to feed himself...)

Another concern is whether we should be spending money in this economic climate (which is really not as bad as people think it is) but as anyone who has taken a 100 level economics course can tell you; spending is not necessarily a bad strategy during times of low interest, just so long as inflation is also low. It's the whole "buy low, sell high" principle at work. During times when people are broke, everything is cheaper, so it is actually a really good time to be investing in our city.

Which is what the arena is. A lot of people are talking about no "public money for private projects", but sometimes if corporations, which we could consider the city to be, and perhaps even should consider it to be, want to prosper they work together to pool money to achieve something awesome. Plus, if we don't put any money in, we won't get any money out, and I don't  believe that the city council is so stupid as to sign away any claim to subsequent revenues from the area

Some people are concerned about the location. But this is the big problem with Rexall, and even Northlands, to an extent. The downtown is spread out, the whole city is bisected rather messily along strange lines. What the airport and the arena and the LRT are aimed at doing is hammering the city into a convenient mould that fits the shape that we know cities work best in. I don't appreciate that the only "case studies" presented to us are all covering American cities, or that one of them draws the incredibly tenuous link between an Ohio brain drain (much like Edmonton has) that was halted by a new arena (plus some housing, but the drain was caused by lack of jobs, not homes), since their public response to sports might be more elastic, but they do make the point. 

The final concern that bothers me, is what we are going to do with Rexall place. Is it just going to stay in service as an arena, or will it be re purposed into something else? Personally I think we should fill it with water and hold naval battles, but I'm also pretty sure we'd have environmentalists up in our face for it. Plus, we can't afford the subsequent "duck fee", should any wayward waterfowl find their way  under a ship's bow.

But the most exciting aspect of this forum is that it means city council gets it. People were loud and worried that the Katz group was going to wave some money in council's face (or theaten to take their toys [oh, excuse me, the Oilers] and leave, which is preposterous) and Edmonton was going to run after them, tripping over whatever we had to, blindly arriving at a shiny new arena that we had no say in. This is council saying "that flies like tailing pond duckies" (i.e. it won't). If we're fronting the lion's share of the cash, we're setting the ground rules. And you know what? I like that.
We need to spend money to make money.

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