Proposed Edmonton arena still facing financial stumbling blocks

What is it about Canadians and big shiny new hockey rinks?

The sturm und drang over plans for a new arena complex in downtown Edmonton highlights our obsession with fancy sports palaces to house our national winter pastime.

According to the Edmonton Journal, the future of the $460-million project — more than $600 million when all the bells and whistles are included — is in doubt because of skepticism over funding.

A new report recommends city council green-light the project next week and deal later with an estimated $69-million shortfall in financing from other levels of government.

“It will be an unfortunate thing to do, but it might come to that, that we might not be able to proceed with the downtown arena,” Edmonton Coun. Amarjeet Sohi told the Journal.

“Not getting a commitment from the province at this time, up to the writing of the report, I don’t see how we will proceed with it.”

Edmonton needed $100 million from the Alberta government, the Journal reported. It got $55 million. It also needs another $14 million from the federal and provincial governments to cover most of the cost of an attached community rink.

Edmonton Mayor Stephen Mandel has expressed confidence the province will ante up, despite no direct commitment from Premier Alison Redford, the Journal noted.

The staff report prepared for city council said, essentially, don't worry about it. The money will turn up.

“While the specific provincial program that could be applied to the remaining provincial funding requirement has not been identified, the funds would not be required until 2015 or 2016,” the report says.

“This allows for time to identify appropriate provincial funding.”

[ Related: Lottery can pay for Oilers and Flames arenas, says Wildrose ]

Coun. Kim Krushell, a longtime supporter of the project, said property taxes on future development in the area around the complex could easily cover the annual payments to borrow the remaining funds.

“Four years of trying to get this deal done and we’re at the point where council may very well decide to kill [the project] because we’re in essence lacking $4 million over 20 years," she told the Journal.

The hand-wringing over the arena project is, of course, based on the prospect of losing the Oilers. While the complex is seen as an anchor for downtown redevelopment, the potential loss of prestige if the Oilers leave overshadows the debate.

Billionaire drugstore-chain owner Daryl Katz threatened last year to move the team to Seattle if taxpayers didn't chip in for a new rink to replace the aging Rexall Place arena.

“The Katz Group has been listening to proposals from a number of potential NHL markets for some time,” the Oilers said in a statement last September, the Globe and Mail reported at the time.

“After more than four years of trying to secure an arena deal and with less than 24 months remaining on the Oilers’ lease at Rexall Place, this is only prudent and should come as no surprise.”

Major Canadian cities see an NHL franchise as a civic crown jewel; they'll do whatever's necessary to retain it and, if they don't have one, offer whatever's required to obtain one.

Quebec City is building a new arena designed around NHL hockey even though there's no prospect for a team on the horizon to replace the long-gone Nordiques.

The $400-million cost will be split between the city and the Quebec government. However, the ink was barely dry on the deal last spring when Quebec's commissioner on lobbying announced a probe into the project over a potential violation of the province's ethics and transparency law, The Canadian Press reported last June. (Plus ça change, plus c'est la même chose.)

In January, the Toronto suburb of Markham approved a $325-million arena project also intended to lure an NHL expansion franchise, even though the Maple Leafs are a short drive down the road.

According to the Globe and Mail, a private developer would cover half the cost, with the city picking up the other half and paying it back via a "voluntary" levy on new housing developments in the area, as well as surcharges on events at the facility.

[ Related: Markham NHL-class arena project, near Toronto, raises a lot of questions ]

In an insightful 2011 column in the National Post, Father Raymond J. de Souza said it's perversely Canadian not to object to spending tax dollars for projects to house billionaire-owned professional sports teams — as long as all regions get their rightful share. Witness the griping when it was suggested Ottawa might help pay for the Quebec City arena. The bleat went up elsewhere in Canada, where's ours?

"So there is no real controversy about public financing for sports facilities," de Souza wrote. "Rather, it is merely a question about who benefits from such spending."

But there are voices in favour of user-pay.

Writing on the Edmonton Journal's blog this week, columnist David Staples argued the city has put enough into the arena deal. A new facility might be a future economic generator, he said, and forking out to $300 million to renovate city-owned Rexall Place may not be money well spent.

"But as much as we might well be in agreement on those issues, we will all agree that the people who most use the arena and benefit from the arena are the ones who should pay the most for it," Staples said.

"This isn’t happening to the right degree at this point, hence the deal is in such trouble. Too much is being asked of people who won’t benefit much from the arena and they’re getting extremely grumpy, as is only right."

(Rendering courtesy of the Edmonton Journal)