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Report: Oilers not likely to get new rink by 2014 deadline

The Canadian Press

12/3/2010 6:03:03 PM

EDMONTON -- Even if the Edmonton Oilers get taxpayer help to fund a new downtown arena, they likely won't get it built by their 2014 deadline, new documents show.

City officials confirmed Friday that construction timelines and surrounding shops and offices that would go with the rink would make such a deadline "challenging."

"I think it's everybody's target to get something built by 2014," Simon Farbrother told reporters at City Hall after releasing documents detailing answers sought by councillors deciding whether to help fund the $450-million rink.

"(But) I think probably all parties assume if we're able to pull a deal together that works for everybody, an extension of that lease (at Rexall Place) for a year or six months or whatever -- we'd be able to do that."

Steve Hogle, spokesman for the Katz Group, which owns the Oilers, wouldn't say if the Oilers would agree to a lease extension at Rexall or whether the missed deadline could be a deal-breaker.

"We won't even get into that today," Hogle told reporters.

"Those conversations are continuing with the negotiations between the city and Katz Group."

The city is entering the critical stage on whether to proceed with a new arena to replace Rexall Place. The facility, located in the city's industrial north end, was built in 1974 and is now the second-oldest facility in the NHL. The New York Islanders play in Nassau Veterans Memorial Coliseum, which opened in 1972.

Local pharmacy billionaire Daryl Katz, who owns the team, told council in July the franchise is losing millions of dollars a year despite the NHL's salary cap on player salaries. He says the Oilers lease deal with Northlands -- the city-owned non-profit group that runs Rexall Place -- is unsatisfactory.

Katz said the Oilers, unlike other NHL teams, see no revenue from the other events held at the rink. He said the franchise is also hamstrung because it's a small market team, meaning the money it can get from advertising and other revenue streams is comparatively limited.

He has been trying for years to kickstart the new rink. He has bought land downtown that would house the arena and a surrounding complex of shops, restaurants, housing and a hotel.

Katz has promised $100 million toward the new 18,000-seat rink and another $100 million for the other amenities.

That would leave the city on the hook for $350 million. Officials say the extra tax revenues from the arena and shops would create about $140 million that could be used to help fund it. The rest could be paid for by a ticket surcharge or other scheme. Nothing has been decided.

Little help is expected from the other levels of government.

Alberta Premier Ed Stelmach, whose government is forecasting a $5-billion budget deficit this year due to slumping oil and natural gas prices, has said they want no part of direct funding. Prime Minister Stephen Harper's government is also hedging, given that it, too, is trying to slay its budget deficit and is now being lobbied by Quebec City to help fund a rink there.

The Edmonton project is far from even getting spades in the ground.

The city has just finished gathering opinion from residents in a series of public forums. Council is scheduled to review the funding options on Jan. 17 and a rezoning hearing to determine whether the land should even be used for an arena is set for Jan. 18.

Next week, on Dec. 10, city councillors will hear from Northlands on what its role should be.

Northlands has made it clear it wants to be part of a new downtown arena or a refurbished Rexall Place, but the Katz Group has said it's going in a different direction. Katz has already hired AEG, the Los Angeles-based international promotions giant.

Rexall Place remains the X-factor.

Analysts say there isn't enough business to support two such facilities in the Alberta capital, and Farbrother seemed to agree.

"If you look at cities of this size, you can draw your own conclusions," he said.

The arena issue has been going on for years, with feasibility studies, forums, reports, drawings, and open-houses.

The stakes are high given the Oilers are the No. 1 sports and entertainment draw in the Alberta capital. Fans routinely sell out the 16,839 seats in Rexall Place, and minor news events regarding the team garner front-page coverage.

The civic adoration is leavened with paranoia that was born in the 1990s, when former owner Peter Pocklington routinely threatened to move the team during his money disputes with Northlands.

Twice in recent months Oilers brass have visited with politicians first in Hamilton and then in Quebec City -- two cities rabid for NHL hockey -- to talk arena issues. Both times the team then had to quickly extinguish flashfire speculation stories raging within hours on Edmonton websites and blogsites that reported the team was pulling up stakes.

Nevertheless, the non-threat threat exists.

While Katz and his executives told councillors in July they are not threatening to leave, they also told them that the Oilers will not play in Rexall Place past the 2013-2014 season.

The politicians were left to connect the dots.