: ’ Candy Mountain Edmonton s Proposed Downtown Arena

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.whydowntown ca

“Attracting teams and building bigger or newer facilities was not associated with economic growth, or changes in the levels of any of these economic indicators. Professional

sports are not, and have never been, engines of economic growth in North American cities. They are

effective at moving consumer’s entertainment from one part of the city to another, and raising employment and wages in

one specific sector of the local economy, the Recreation and Amusements sector, which contains professional sports

teams.”

-Professor Brad Humphreys

Background

Oilers joined NHL in 1979, have won 5 Stanley Cups

Plebiscite to build downtown “Omniplex” failed in 1970 municipal by-election

Northlands Coliseum opened in 1974, now Rexall Place

Oilers lease agreement with Northlands ends in 2014

Estimated cost of building new arena (and surrounding facilities) have ranged from $250 million to $1 billion dollars

Estimated worth of Daryl Katz is $1.5 billion (2009)

Proponents

Arena is old (4th oldest active arena in NHL)

Arena is outdated (bathrooms, seating, throughways all too crowded, dressing rooms too small, media facility needs upgrading)

Positive economic impact on Edmonton

New arena will revitalize downtown core (anchor tenant in massive redevelopment project)

New arena will make Edmonton “world-class city”

Need to compete/competitive advantage

Opponents

Owner can afford to pay for it himself

Academic research consistently shows little to no economic benefit to taxpayers to subsidize

Proponents provided no hard data in terms of positive economic or revitalization impact

Cost will be much higher than announced (average overrun on arenas is 40%)

Arena will be empty majority of every year

Current location just fine (12th busiest concert venue in the world)

.Opponents cont

Oilers currently net-contributors to NHL’s revenue sharing system (they are “haves” not “have-nots”)

Enjoy experience and history of current Rexall Place

Current location one of few historic buildings still left in NHL (more Stanley Cup wins than any other active NHL arena)

Oilers and Mayor manufactured false need for new arena

Will not solve problem of density in downtown core

Vast majority of public opposed to use of public dollars (76%)

“Proponents of using public funds to finance stadium construction argue that the benefits from increased

economic activity and increased tax revenue collection exceed the public outlays. But independent economic

studies universally find such benefits to be much smaller than claimed. So does it makes sense for metro areas to

use public funds to attract and retain major league sports franchises? The answer is definitely not if

benefits are limited to increases in economic activity and tax revenue collection. A strong case can be made,

however, that the quality-of-life benefits from hosting a major league team can sometimes justify the large public

outlays associated with doing so.”-Rappaport-Wilkerson Report

“ City Shaping” Recommendations

$450 million dollar arena facility (just capital costs) as part of multipurpose “activity district”

18,000 seats (current arena has 16,839)

More boxes and suites (64 luxury suites, 12 bunker suites, 2 party suites, two restaurants, club lounge)

30% private funding, 70% public funding through debt financing (Community Revitalization Levy)

Fate of current Rexall Place unknown

“Why downtown? It has to be downtown.”

“ City Shaping” Failings

No hard evidence/numbers on positive economic impact

No hard evidence/numbers on downtown revitalization

No exploration of sites in Edmonton other than downtown

More suites good for owner (only 65% tied to HRR) and corporations, but not necessarily good for average fan

Committee members hand-picked by Mayor

“ .City Shaping” Failings cont

Seven of nine members on Committee with ties to Oilers, City, Northlands (no public involvement)

Neither the public, nor members of City Council, allowed to see some of the findings (HOK Study and CSL Report never released)

Would not release expected revenues and expenses

“I am somewhat leery of simply looking at the best-case-scenarios from other cities and concluding: “it happened there, it will happen here.” 29 new arenas and stadiums have opened in North America since 2000. Columbus

and San Diego are probably the most wildly successful. The others are less successful, some much less

successful, in terms of revitalizing the surrounding area. For example, the new football and baseball stadiums in

Cincinnati and Pittsburgh, four facilities, have had very little impact on the surrounding areas. It is possible to have a

profound effect on the surrounding community, but it is far from certain that this will happen.

-Professor Brad Humphreys

Final Thoughts

Opposed to public funding of new arena

Not opposed to revitalizing downtown

Simply not best use of land or public resources

New arena will not make Edmonton “world-class city”

New arena will not make downtown “Greenwich Village of Western Canada”

Any use of public dollars to build new arena should be put to plebiscite