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Thread: New arena deal fair for city, on to next steps

  1. #1
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    Default New arena deal fair for city, on to next steps

    Plans to build a new arena in downtown Edmonton have taken a significant step forward with City Councilís approval of an agreement framework between the City and the Katz Group. The framework outlines the principles both parties will use to finalize the terms of a master agreement.

    Council has given City administration the mandate to work with the Katz Group and other stakeholders to make the downtown arena become a reality. The framework agreement addresses the funding, design, building and operation of the arena.

    We believe the agreement is a fair deal for Edmonton and for the Katz Group. It responds to the key points we heard from Edmontonians in our consultation last year:

    • it minimizes the Cityís risk,
    • it ensures no current tax dollars will go to the project and,
    • it keeps the Oilers in Edmonton for 35 years.


    The Cityís $125 million contribution to the construction costs of an arena will be generated in part through a Community Revitalization Levy ($45 million) while the remaining $80 million will come from sources such as new parking revenue, tax revenue from the arena, and redirected City subsidies.

    Edmontonians told us users of the facility should pay for part of the new building so a user-pay Facility Improvement Fee will raise $125 million to put towards design and construction. And the $100 million contribution of the Katz Group is confirmed.

    Having this agreement in place now enables both parties to pursue funding from other levels of government to make up the $100 million shortfall in the $450 million maximum price that has been set for the arena.

    The framework agreement also states clearly that the City will own the land and building and the Katz Group will be responsible for operations including all operating costs and the costs of all capital upgrades, maintenance and improvements. In return they will receive all operating revenues, including naming rights and parking revenues. Thatís a deal that we believe helps mitigate the Cityís risks.

    The design of the new arena is critical to the revitalization of the downtown area. The agreement spells out that any design must be acceptable to both parties. The City will ensure that there is public input into the design. From our perspective, the arena design must support the Capital City Downtown Plan, integrate into the surrounding community and contribute to downtown revitalization.

    The framework also reaffirms that a community benefit agreement will be a key component of the master agreement and includes conditions such as a requirement for access to the building each year to stage large community events such as Capital EX or the Canadian Finals Rodeo. It also references the redevelopment of the entertainment district area around the arena, a critical piece of revitalizing this part of our city.

    We believe that this project, if done right, has tremendous potential to contribute to revitalization of our downtown.

    Much work remains to be done before the first shovel hits the ground, but both partners are committed to working together. Next steps will be to secure the additional $100 million, finalize a master agreement, clearly define the CRL boundary, and define a process to engage Edmontonians in the design of the arena.

    This is another step forward for our community that will complement efforts already underway to enhance the vibrant, dynamic and appealing downtown that Edmontonians want.

    To stay informed as this project progresses visit www.edmonton.ca/downtownarena.

    Guest column submitted by:

    Simon Farbrother - City Manager

    Office of the City Manager
    City of Edmonton
    3rd Floor, City Hall
    1 Sir Winston Churchill Square
    Edmonton, Alberta T5J 2R7

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    All,

    We've had some issues with our column section on the front page, so I will just post this guest column submitted by Simon Farbrother directly here.

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    There are, loosely speaking, two types of arena backers whose views deserve respect:

    (1) Oiler fans who just want the assurance our team will stay.

    (2) Urban visionaries who believe that the arena will promote downtown development and revitalization.

    The first group's goals are obvious, understandable, and unimpeachable. If Katz will move the team otherwise, there is little choice.

    The second group's goals, however, very possibly are not met by the deal as it has been made.

    The Katz group has received so much control over the arena that it will be the major driver in its design. It is not at all certain that urban-revitalization goals will loom large in the arena plans. Indeed, details like the inclusion of a covered pedway over 104 Avenue suggest that the arena is not being planned so as to promote active street life, and that the city's assurances about retaining some control over the design are empty.

    Under the circumstances, therefore, the arena becomes nothing but a sop to Oiler fans, and in view of the control the city has yielded, the probable fiscal destruction of Northlands, and the amount of public money being invested, the arena deal is a catastrophe.

    If, as it now seems the most likely outcome, the arena's design will fail to promote urban revitalization, then Mayor Mandel and the other great backers will deserve utter condemnation and the harshest possible political defeat in the next election.

    Even if you are as I am an Oiler fan.

    There were better ways of doing this, surely.
    Last edited by alex69; 02-06-2011 at 11:02 AM.

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    Quote Originally Posted by alex69 View Post
    The Katz group has received so much control over the arena that it will be the major driver in its design. It is not at all certain that urban-revitalization goals will loom large in the arena plans. Indeed, details like the inclusion of a covered pedway over 104 Avenue suggest that the arena is not being planned so as to promote active street life.

    ......................

    Mayor Mandel and the other great backers deserve utter condemnation and the harshest possible political defeat in the next election.
    the arena will generate tax revenue over many many years to come. i know it must be hard to think of the city's future in the long term.

    Mandel has been a leader in city revitalization and development and overall vision (city centre airport lands, expo, LRT and TOD, and the new arena.) I think the overpass would create a safe zone for people crossing 104 in massive numbers and will generate other pockets of activity once outside it.

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    ^I did qualify my condemnation, to make it work in case all the high hopes come to naught. (To be fair, after you quoted it.)

    The city's hopes for the arena's positive consequences remind me, to mix sports metaphors very badly, of a Hail Mary pass.

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    Thanks for your hard work Simon. I know that more details have to be agreed upon, but I am confident that an agreement can be reached.
    "Talk minus action equals zero." - Joe Keithley, D. O. A.

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    Yes, Thanks Simon!
    Quote Originally Posted by The_Cat View Post
    Thanks for your hard work Simon. I know that more details have to be agreed upon, but I am confident that an agreement can be reached.

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    So this site won't let some guy promote his little painting company, but it'll allow front page space to go to Mandel & Katz's arena scheme?

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    I'd be more than a little concerned about the "if conditions warrant" for the extra $100 mil in ancilliary development.

    Without that, all you are doing is transplanting the dead space around current rexall for dead space downtown

    This deal gets worse and worse all the time
    Last edited by 240GLT; 02-06-2011 at 02:30 PM.
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    ... That entertainment district is going have huge demand... Towers might take some time.
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    Quote Originally Posted by armin View Post
    So this site won't let some guy promote his little painting company, but it'll allow front page space to go to Mandel & Katz's arena scheme?
    Ya I don't get it. Why would c2e want to debate a civic building. We should just let this place turn into kijiji!

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    i say, let's forget about the new arena. let's just keep rexall.

    but it still has to be renovated. so, us taxpayers should just write a cheque for 250 million now (the amount taken from northlands own report on rexall renovations)

    sure, northlands will go to the province and the feds, but tax dollars are tax dollars.

    so, in the end, taxpayers will be paying; we'll end up with a renovated arena (still looking all 'sexy concrete bunker' 1970's) with still no real chance of street level activity because of the underpass. we'll still have a vacant gravel lot/ parking area north edge of downtown that will remain that way for a long time. i like that fact outside investors/ vistors will see that and continue to think of us soley as industrial red necks. and i also like that born and raised edmontonians will go to our fine post secondary schools, but ultimately leave for greener pastures for places that aren't afraid of change.

    oh, yeah, and we lose katz's 100 million.

    yeah, let's just drop this whole new dt arena thing right now, because the mayor and katz want to hose the taxpayers and laugh all the way into the sunset.

    Last edited by thatguy; 03-06-2011 at 12:03 AM.

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    ^Frankly there is a portion of the population that would not be satisfied unless the new arena was built completely with private money and compete with Rexall.
    Did my dog just fall into a pothole???

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    Let's not go to extremes like "all public" or "all private". That's not the point.

    The point is that the public side is not getting enough control based on its investment. And our mayor Mandel is just fine with that. Why?

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    Not enough control???? The city will own the land and the building. The city will have to approve the design before the complex is built. Katz will be responsible for all the upkeep to the facility. How much more control should you expect the city to have???

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    Quote Originally Posted by alex69 View Post
    Let's not go to extremes like "all public" or "all private". That's not the point.

    The point is that the public side is not getting enough control based on its investment. And our mayor Mandel is just fine with that. Why?
    Why just point out Mandel? Majority of councilors, the city administration, and the city Manager all are backing the arena as a good for the city type of project..

    But you know, its easy to take potshots at the mayor.

    Maybe you can identify what control based on its investment you would like to see? What's missing?

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    I'd definitely like to see what will take place at the council meeting on June 22.
    "Talk minus action equals zero." - Joe Keithley, D. O. A.

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    Quote Originally Posted by Doug View Post
    Not enough control???? The city will own the land and the building. The city will have to approve the design before the complex is built. Katz will be responsible for all the upkeep to the facility. How much more control should you expect the city to have???
    I'm just curious, what benefit is there to the city to own the new arena? They'll get no revenue from it for 35 years (other than the 4 weeks a year) and when the 35 years is up, will just end up with another outdated building like the coliseum that may need to be demolished or extensively renovated (ie full circle).

    Do you think we could get more private $$$ if we didn't insist on owning the land and building?

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    Katz should have increase his offer from $ 100 m to $ 200 m by now, then it should start digging in less than 3 months. Problem solved.
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    very easy to solve problems like that.

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    Quote Originally Posted by bolo View Post
    Quote Originally Posted by Doug View Post
    Not enough control???? The city will own the land and the building. The city will have to approve the design before the complex is built. Katz will be responsible for all the upkeep to the facility. How much more control should you expect the city to have???
    I'm just curious, what benefit is there to the city to own the new arena? They'll get no revenue from it for 35 years (other than the 4 weeks a year) and when the 35 years is up, will just end up with another outdated building like the coliseum that may need to be demolished or extensively renovated (ie full circle).

    Do you think we could get more private $$$ if we didn't insist on owning the land and building?
    I believe they currently subsidize property tax of the current building. the arena will pay tax as will the development of the entertainment district. the swing from subsidizing to earning is benefit enough. The city will also own the land. Even if the building is POS in 35 years, the city can still sell the land. it is a low-risk proposition.

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    Quote Originally Posted by grish View Post
    Quote Originally Posted by bolo View Post
    Quote Originally Posted by Doug View Post
    Not enough control???? The city will own the land and the building. The city will have to approve the design before the complex is built. Katz will be responsible for all the upkeep to the facility. How much more control should you expect the city to have???
    I'm just curious, what benefit is there to the city to own the new arena? They'll get no revenue from it for 35 years (other than the 4 weeks a year) and when the 35 years is up, will just end up with another outdated building like the coliseum that may need to be demolished or extensively renovated (ie full circle).

    Do you think we could get more private $$$ if we didn't insist on owning the land and building?
    I believe they currently subsidize property tax of the current building. the arena will pay tax as will the development of the entertainment district. the swing from subsidizing to earning is benefit enough. The city will also own the land. Even if the building is POS in 35 years, the city can still sell the land. it is a low-risk proposition.
    If the city owns the new arena, doesn't it end up paying property tax to itself? Or is the Katz group suppose to do that? Yes, we will own the land in 35 years, but that's only after buying it for $20M from the Katz group now.

    Other development generating more property taxes will happen whether or not the city owns the arena, so that's kind of a moot point.

    What is the drawback of having the land and arena owned privately, if that position could help generate more private funding for the project?

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    It's not really a moot point, how long has that land been vacant around the new proposed arena site? Do you think a new arena will speed up development and bring in tax dollars years ahead of it's current pace? If Katz and friends build $400 million in ancillary developments, won't that bring in new revenue?

    Public ownership opens the door for other levels of government to help fund the arena as it isn't a private facility.

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    Quote Originally Posted by Hilman View Post
    It's not really a moot point, how long has that land been vacant around the new proposed arena site? Do you think a new arena will speed up development and bring in tax dollars years ahead of it's current pace? If Katz and friends build $400 million in ancillary developments, won't that bring in new revenue?
    Did you even read what I wrote?

    Quote Originally Posted by Hilman View Post
    Public ownership opens the door for other levels of government to help fund the arena as it isn't a private facility.
    Let's hope so. But I think both the Feds and Province have other priorities (Feds already rejected funding Quebec arena, Alberta needs to help rebuild Slave Lake and other disaster areas).

    I'm just brainstorming the idea that maybe the project would attract more private dollars if we considered private ownership of the land and building. I don't know if they've seriously considered that approach in the last year or so. It might be a good compromise if it means less upfront tax money and/or if it can help make up the $100M shortfall.

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    Sorry, I misread what you wrote but the comment about the $100 million shortfall still applies. The government said they would not support a "privately owned building", sounds kind of cryptic to me.
    Last edited by Hilman; 04-06-2011 at 07:47 AM.

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    Quote Originally Posted by Medwards View Post
    Quote Originally Posted by alex69 View Post
    Let's not go to extremes like "all public" or "all private". That's not the point.

    The point is that the public side is not getting enough control based on its investment. And our mayor Mandel is just fine with that. Why?
    Why just point out Mandel? Majority of councilors, the city administration, and the city Manager all are backing the arena as a good for the city type of project..

    But you know, its easy to take potshots at the mayor.

    Maybe you can identify what control based on its investment you would like to see? What's missing?
    a. Mandel's the main cheerleader.

    b. Here's what "control" I would have liked: -- full control of design, not "input" to be coordinated with the Katz group; -- extras going up simultaneously, liable by the Katz group; -- no land buyout (and no tax breaks after, either); -- no non-compete clause.

    Yes, I realize the word control doesn't quite describe it. Pick another word, then. I still think it's a raw deal.

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    Can you tell me why Katz would still want to be a part of this after your "control"

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    Quote Originally Posted by 240GLT View Post
    This deal gets worse and worse all the time
    Major props on the Lando quote.

    The question is, like Lando, do we have no choice?

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    Quote Originally Posted by alex69 View Post
    Quote Originally Posted by Medwards View Post
    Quote Originally Posted by alex69 View Post
    Let's not go to extremes like "all public" or "all private". That's not the point.

    The point is that the public side is not getting enough control based on its investment. And our mayor Mandel is just fine with that. Why?
    Why just point out Mandel? Majority of councilors, the city administration, and the city Manager all are backing the arena as a good for the city type of project..

    But you know, its easy to take potshots at the mayor.

    Maybe you can identify what control based on its investment you would like to see? What's missing?
    a. Mandel's the main cheerleader.

    b. Here's what "control" I would have liked: -- full control of design, not "input" to be coordinated with the Katz group; -- extras going up simultaneously, liable by the Katz group; -- no land buyout (and no tax breaks after, either); -- no non-compete clause.

    Yes, I realize the word control doesn't quite describe it. Pick another word, then. I still think it's a raw deal.
    Look who's talking.

    Diotte, Caterina, and Sloan are the main cheerleaders on the opposite side.

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    ^Nemic, you have so much passion to draw up enemy lists, and yet such a poor grasp of the language. Stop drawing up lists of people to tar and feather and crush, and break open a dictionary.

    Cheerleading is positive. (And types like you who like to call people "haters" should know that.) So you can't cheer against something, only for it.

    Mandel and a few others are campaigning for. There's no organized campaign against, your thirties-German-style name lists notwithstanding. But even if there were, Catarina and the others would not be cheerleading. They are skeptics.

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    Some Edmontonians gathered in front of City Hall Sunday, protesting a controversial proposal allowing the use of public funds to partially pay for an arena in downtown Edmonton.
    Approximately 75 people turned out for the rally, carrying signs and speaking out on the issue.
    The protestors are against an agreement between the city and the Katz Group – which could put money from a community revitalization levy, towards a new arena and home for the Edmonton Oilers.
    The city is looking to fill a $100 million gap in funding.
    Some think the billionaire owner of the team should simply pay more money towards the arena.
    "Katz can dig up more money, I'm sure." Norman Wilson said Sunday at the rally. "If he can't, we'll find someone else.

    http://edmonton.ctv.ca/servlet/an/lo...5?hub=Edmonton
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    "Katz can dig up more money, I'm sure." Norman Wilson said Sunday at the rally. "If he can't, we'll find someone else."
    75 people showed up and the gap is $100 million. So, $100,000,000/75 =$1333333.33 per person.

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    Quote Originally Posted by grish View Post
    "Katz can dig up more money, I'm sure." Norman Wilson said Sunday at the rally. "If he can't, we'll find someone else."
    75 people showed up and the gap is $100 million. So, $100,000,000/75 =$1333333.33 per person.



    There is no way, Norman will not find someone else because katz is the owner of Oilers and this guy forgot one thing that this deal shows that the city owns the land and arena.
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    Quote Originally Posted by jagators63 View Post
    Some Edmontonians gathered in front of City Hall Sunday, protesting a controversial proposal allowing the use of public funds to partially pay for an arena in downtown Edmonton.
    Approximately 75 people turned out for the rally, carrying signs and speaking out on the issue.
    The protestors are against an agreement between the city and the Katz Group – which could put money from a community revitalization levy, towards a new arena and home for the Edmonton Oilers.
    The city is looking to fill a $100 million gap in funding.
    Some think the billionaire owner of the team should simply pay more money towards the arena.
    "Katz can dig up more money, I'm sure." Norman Wilson said Sunday at the rally. "If he can't, we'll find someone else.

    http://edmonton.ctv.ca/servlet/an/lo...5?hub=Edmonton
    WOW, a whole 75!! i'm sure they'll have a lot of stroke with Katz and the boys at city hall.
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    Honestly the Arena will be a huge step in revilatizing downtown, The city spends millions of dollars a year on projects that do nothing. The city's previous attempts at revitalizing downtown have been good but essentially a waste of money so what's the issue with getting something for your money finally?
    Levko

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    Quote Originally Posted by OilTastic/BigCityDude View Post
    WOW, a whole 75!! i'm sure they'll have a lot of stroke with Katz and the boys at city hall.

    How many people came forward on the Katz side with announcements of funding? ZERO
    Advocating a better Edmonton through effective, efficient and economical transit.

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    Quote Originally Posted by alex69 View Post
    Quote Originally Posted by Medwards View Post
    Quote Originally Posted by alex69 View Post
    Let's not go to extremes like "all public" or "all private". That's not the point.

    The point is that the public side is not getting enough control based on its investment. And our mayor Mandel is just fine with that. Why?
    Why just point out Mandel? Majority of councilors, the city administration, and the city Manager all are backing the arena as a good for the city type of project..

    But you know, its easy to take potshots at the mayor.

    Maybe you can identify what control based on its investment you would like to see? What's missing?
    a. Mandel's the main cheerleader.

    b. Here's what "control" I would have liked: -- full control of design, not "input" to be coordinated with the Katz group; -- extras going up simultaneously, liable by the Katz group; -- no land buyout (and no tax breaks after, either); -- no non-compete clause.

    Yes, I realize the word control doesn't quite describe it. Pick another word, then. I still think it's a raw deal.
    Regarding your comment on having "full control of the design", couldn't have captured your ignorance of the process any better. The Architects and the Project Management Professionals, who the City has allocated to this project have had direct "input" into the design of this facility. As with any project a consultant is hired for their expertise and the City provides "input". There hasn't been a line drawn that hasn't been scrutinized. How many designations do you have? I'm sure the Architect, who has his Masters, is capable of providing "input"........

  38. #38

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    Arena debate postponed two weeks

    City staff need more time to match design with budget

    A major city council decision on the downtown arena planned for next week has been postponed while staff find ways to cut costs to keep the facility on budget.
    The price of constructing the oil-drop shaped arena shown in schematic designs this spring is now more than the $450-million maximum price, project executive director Rick Daviss said Wednesday.
    http://www.edmontonjournal.com/news/...743/story.html


    Edmontonians like the idea of a new downtown arena, but are cool to the proposed funding formula, according to an online survey conducted by Coun. Kerry Diotte.
    Of 1,339 people who took part in Diotteís website survey, 68 per cent were in favour of building a new arena. However, there were concerns about the proposed financial framework for the deal, which would see the money for the $450 million project come from Oiler owner Daryl Katz and a combination of a community revitalization levy and redirecting current support for Rexall Place. The project is still $100 million short.
    Only 46 per cent want the deal to go ahead based on the current deal, 28 per cent want it build but with a different framework, and 22 per cent donít want it built at all.
    http://metronews.ca/news/edmonton/27...hate-the-deal/
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    City trying to wrestle control of the project away from the tenant perhaps ?
    Still waiting for the Arlington site to be reborn .......

  40. #40

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    Quote Originally Posted by Edmonton PRT View Post
    Arena debate postponed two weeks

    City staff need more time to match design with budget

    A major city council decision on the downtown arena planned for next week has been postponed while staff find ways to cut costs to keep the facility on budget.
    The price of constructing the oil-drop shaped arena shown in schematic designs this spring is now more than the $450-million maximum price, project executive director Rick Daviss said Wednesday.
    http://www.edmontonjournal.com/news/...743/story.html


    Edmontonians like the idea of a new downtown arena, but are cool to the proposed funding formula, according to an online survey conducted by Coun. Kerry Diotte.
    Of 1,339 people who took part in Diotteís website survey, 68 per cent were in favour of building a new arena. However, there were concerns about the proposed financial framework for the deal, which would see the money for the $450 million project come from Oiler owner Daryl Katz and a combination of a community revitalization levy and redirecting current support for Rexall Place. The project is still $100 million short.
    Only 46 per cent want the deal to go ahead based on the current deal, 28 per cent want it build but with a different framework, and 22 per cent donít want it built at all.
    http://metronews.ca/news/edmonton/27...hate-the-deal/
    I am really upset at Kerry's communication on this subject... i will post the email from his office.
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  41. #41

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    Hello all,

    Thank-you very much for taking the time to complete Coun. Kerry Diotte's downtown arena survey. As requested here are the results of that survey.

    We found that 68% of respondents want a new arena built in Edmonton.

    However, a significant number tell us they either want a new financial framework than the one currently proposed, or don't want a new arena built at all.

    The majority of respondents also indicated the City should not consider using provincial MSI money to fund the remaining $100 million.

    For more detail, I've attached the results breakdown for your information.

    We also recieved nearly 1,000 comments on this issue. Those are available for viewing at www.kerrydiotte.com

    If you'd like to stay updated on key civic issues (including the arena), we invite you to sign up for Kerry's monthly e-newsletter at http://bit.ly/xdjB2r

    Thanks again for taking the time to share your views.

    Enjoy the rest of your day,

    Barbara


    Barbara Mendez
    Executive Assistant to Councillor Kerry Diotte
    "Do you give people who already use transit a better service, or do you build it where they don't use it in the hopes they might start to use it?" Nenshi

  42. #42

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    Kerri and the media have sent out this message that the public heavily disaproves of the funding... when it is split almost 50/50 based on his non scientific opinion poll of 1300 people.

    1) Would you like to see a new NHL arena in Edmonton? Yes: 68%; No 24%; Don’t know/undecided: 8%.
    2) Which statement to you most agree with? Build the arena now with the current proposed deal: 46%; Build the arena but with a new financial framework: 28%; Don’t build a new arena: 22%; Don’t know/undecided: 4%.
    3) Should the City use Municipal Sustainability Initiative (MSI) money provided by the province for infrastructure to make up the last (or missing) $100 million to build the $450 million arena? Yes: 46%; No: 49%; Don’t know: 5%.
    Last edited by edmonton daily photo; 28-06-2012 at 02:03 PM.
    "Do you give people who already use transit a better service, or do you build it where they don't use it in the hopes they might start to use it?" Nenshi

  43. #43

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    typical Diotte. Anything to further his 'fiscally responsible' image. Playing the media game still...

  44. #44

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    All this tells me is there is pretty clear support to build, a pretty clear majority want it to go ahead regardless of the existing framework and the opinion to use MSI funds is split almost done the middle.
    "Do you give people who already use transit a better service, or do you build it where they don't use it in the hopes they might start to use it?" Nenshi

  45. #45

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    Lord help me/us if he tries to go for Mayor..
    "Do you give people who already use transit a better service, or do you build it where they don't use it in the hopes they might start to use it?" Nenshi

  46. #46

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    City's annual budget is.....$1.5 - 2.0 Billion(??) multiplied by 30 years, so what's another $100 Million really(missing money). 1% of the overall expenditures over 30 years?. Good thing I'm not an accountant City turned down $18.0M from the province to put a roof over commonwealth.

    Over 30 years, the City will blow more than $100M on funicular things anyways! That's only $3.3M a year on mistakes and dumb ideas. Use the money now, on a concrete idea, taking away too many options for mistakes. It's for their own good!

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