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Oilers arena deal back from the dead

EDMONTON -- The deal to build a new arena for the Edmonton Oilers rose from the dead Wednesday, but remains a long way from getting back on its feet.

City councillors voted to resume talks with Oilers billionaire owner Daryl Katz after Katz officials promised to abandon demands for an extra $210 million in direct subsidies from taxpayers.

Both sides are still hoping to get a deal in place to put shovels in the ground by April on the $478-million downtown rink. Mayor Stephen Mandel said the two sides still need to resolve the core issue: the Oilers say they need more taxpayer dollars to make a profit on the deal while the city says they don’t.

“This is all about money,” said Mandel. “I think there’s a great vision to build a wonderful downtown and create a bunch of new buildings and all kinds of marvellous things. But let’s face it, at the end of the day if they (the Oilers) don’t have enough money to pay their bills, it’s not good for them and it’s sure not good for the city.”

The decision was made after John Karvellas, a vice-president and lead negotiator for the Katz Group, and other Katz Group officials made a pitch to council that talks resume.

Council had pulled the plug on negotiations on Oct. 17 after Katz refused to budge on his demands for the extra money.

He also twice refused council’s entreaties to meet with them to make his case on why the extra millions were so critical.

Katz was not at council Wednesday.

Katz officials also pulled off the table their demand that city hall break its own tendering rules by directing city staffers move into a proposed new Katz office building beside the arena as an anchor tenant. However, they said the Oilers still need extra public money somehow, perhaps some of the extra property tax revenues expected to be generated by the arena. Along with reopening talks, councillors also voted to bring in a mediator.

The mediator will in turn appoint a financial analyst to examine the numbers and see if Katz really does need millions of dollars more to make the deal profitable.

Karvellas later told reporters that the work is just beginning and that the Katz Group must rebuild trust with councillors and Edmonton hockey fans.

During the stalemated talks two months ago, Katz threatened to pull the team out of Edmonton and move it to Seattle.

“Trust to me is a little bit like getting your reputation back when you lose it,” said Karvellas.

“It’s not something you do immediately. It’s something you earn through a period of time of consistent conduct, and that would be my objective going forward.”

Karvellas said the Katz Group refused to attend the two earlier meetings at council’s request because, with negotiations crumbling, it felt less like an information session and more like “an invitation to a public hanging -- our own.”

When asked if their appearance Wednesday could be construed as an apology, Karvellas mulled the question for a few seconds, then said: “That’s not an inappropriate characterization.”

While talks with the Oilers will resume, city council will also proceed with an in-house proposal to build and run the rink itself and keep the profits. A report on that is coming on Jan. 23.

 
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