Editorial: There will be plenty of time to say "no" later

A lot has been said and written over the past few days about our vision for a new downtown arena district. I thought it might be helpful if I were to share some of my thoughts on the matter.

What we have in mind is a $1.5 billion to $2 billion development in the heart of our city that can spur revitalization, create jobs and stimulate investment. In the process, we will ensure the long term sustainability of the Oilers and make Edmonton an even better place to live, work and play.

This is a vision that is consistent with the recommendation of the Mayor's Leadership Committee, which included representatives of Northlands and other leading members of our community. It is also fully aligned with the City of Edmonton's strategic priorities and downtown plan.

Now, some will say we should just fix the potholes and call it a day. Well, I drive here, too, and I'm all for fixing potholes. But we need to aim higher than that if we want to keep Edmonton moving forward and be able to compete for talent and jobs in the future.

I have been encouraged by the strong support we have received from leaders across the city. I am grateful for the Mayor's recent comments applauding our efforts and urging Edmontonians to reserve judgment until they have more information about the project.

We believe the discussion we are now having about the merits of a downtown arena district is one of the most important conversations Edmonton will have in its history. But to have that conversation, we believe it's critical to set the record straight so citizens can bring forward informed opinions.

There has been a suggestion that I have somehow broken my pledge regarding a new arena. This is untrue. Back at the time of my efforts to acquire the Edmonton Oilers, I made a commitment to help build a new downtown arena. Here is what I said in a Katz Group press release issued on March 25, 2008: "Daryl Katz, Founder and Chairman of Rexall Sports, has pledged to contribute his time, energy and on the order of $100 million towards the development of a new downtown arena following his acquisition of the Edmonton Oilers."

It was impossible then to know what the funding model might look like and who might own the arena, which is why I left the specific nature of the funding open. Maybe I'm still suffering for having started my career as a lawyer, but I thought the words were clear. In hindsight, I understand how some people may have read the comment differently, and I'm sure my preference not to discuss these things publicly hasn't helped.

That said, I do believe the funding model makes good on my commitment and that it is a much better way to finance this project than if I were to simply pay construction costs. That's because in the model we have proposed - which was designed for a scenario in which the City would own the arena - you can't separate the private sector investment from the financing the City would provide to help fund the arena construction costs. The two are tied together. The arena creates the draw for the private sector investment and the private sector investment generates the revenues to pay for the arena.

But the benefits of our proposed model go far beyond that. By leveraging my investment in the project to attract over $1 billion in additional development, we can expand the City's economic base and generate sufficient tax revenues to pay back the City's investment. And, once that's done, the revenue generated by the development will fill the City's bank account for decades to come.

We can do all that with no increase in property taxes for Edmontonians and the City's share would probably still be less than it cost to build the 23rd Avenue overpass. Surely this is also a better investment than putting another $250 million into the modernization of Rexall Place, which would offer no return to the City and do nothing to revitalize downtown.

We think this approach makes a lot of sense but we are the first to admit there are far more ways to skin this particular cat. That is why we are continuing our dialogue with the City and other key stakeholders, including (and especially) the people of Edmonton. We know it is essential to have a public consultation process which involves the citizens. No one has a monopoly on great ideas.

You can be sure that we will follow a proper public consultation process and then go before City Council with a proposal that reflects the input we have received and addresses Council's concerns as best we can.

I thought Mayor Mandel put it very well when he said, "This project is innovative [and] creative...let's not throw gasoline on the fire. Let's see what it is and try to be more of a city that's a doing city rather than a city that's a naysayer."

There will be plenty of time to say no to the project later. For now, please hear us out, consider what we bring forward and let's see if we can work together to build Edmonton into an even greater city than it is today.

Daryl Katz is the Chairman and Founder of the Katz Group.