D & Y
A proposed hockey arena in downtown Edmonton...
Keep dreaming. A city of 1.1 million people with two 17,000 or so arena venues would have those venues only compete against eachother for events, each making the other less profitable in the long run. The costs between the two would eat away at the profits each would be making.^nonsense!
Downtown arena sales pitch panned 12
By Pamela Roth ,Edmonton Sun
First posted: Wednesday, April 27, 2011 3:17:53 MDT PM
A proposal to sell seats like real estate to fund the new downtown arena was met by much skepticism from members of city council and dismissed outright by the Oilers owner.
The Chicago-based Stadium Capital Financing Group spent much of Wednesday morning trying to convince council members that their funding model involving Equity Seat Rights (ESR) is the best solution to meet arena funding shortfalls because it doesn’t involve government funds or taxpayer dollars.
The group suggests selling ownership of 1,500 new seats and 500 premium club seats in the new arena at a cost of $278,000 to $417,000 each, which could raise up to $700 million.
Of that $700 million, $550 million would be dedicated to funding the new proposed arena, $100 million would go to Oilers ownership and $50 million to building the reserve/community benefits fund.
The group also proposes building a new 20,000-seat arena instead of the 17,100 seats currently at Rexall Place.
Group member Lou Weisbach said the proposal basically targets longtime season ticket holders, along with various investors. He explained that as the price of tickets goes up over time, the advantage will go to the buyer.
“I was told there are a lot of people up in arms about the way this building is being financed. We have a suggestion that we think is agreeable to everybody,” said Weisbach, who noted the cost of the seats will not only include 45 Oilers games per season, but also 60 concerts.
“You bring in financial buyers who see this as an economic opportunity to make money over time. I feel that this would work for Edmonton.”
The model is currently being used to construct a new stadium for the University of California at Berkeley.
But members of council questioned whether the proposal could work here.
“What would inspire me to spend my money to do that?” said Mayor Stephen Mandel, who noted there’s a big stretch in price between a season ticket and what is being proposed.
“It really strikes me as a bit overly zealous. Something that seems so good is always maybe too good to be true.”
The Oilers owner, the Katz Group, wants to move the team into a new $450-million arena downtown. Earlier this month, city council approved a framework, setting out the guidelines city administration will use in arena negotiations with the Katz Group.
Katz would contribute $100 million to construction costs, with another $125 million coming from a ticket tax.
A further $125 million would come from property taxes on additional development surrounding the arena and other sources. The funding for the remaining $100 million is still up in the air.
Coun. Ben Henderson said if the ESR proposal were to go anywhere, Stadium Capital would have to speak with Katz first.
Katz group spokesman Bob Black said on Wednesday in a written statement the Stadium Capital proposal would not work in Edmonton and added that the numbers projected are “something of a flight of fancy.”
The idea for an ESR first surfaced last fall when local sports agent Ritch Winter wrote a letter to city council. But the Katz Group said it wasn’t interested in the proposal.