Edmonton Oilers and City Hit Road Block on New Arena Rebuild

J.P. Gaston@JPeGxContributor IIISeptember 13, 2012

EDMONTON, AB - JUNE 17:  Fans gather outside of Rexall Place before the start of game six of the 2006 NHL Stanley Cup Finals against the Edmonton Oilers and the Carolina Hurricanes on June 17, 2006 at Rexall Place in Edmonton, Alberta, Canada.   (Photo by Tim Smith/Getty Images)
Tim Smith/Getty Images

The Edmonton Oilers new arena, part of a revitalization plan for the city of Edmonton, has hit a roadblock. The Katz Group and the city seem to be about as far apart as the NHL and NHLPA negotiations.

The initial $450 million price tag has been adjusted to $475 million, but Stephen Mandel, Edmonton's Mayor, says that the overrun is not the sticking point here. Via Elise Stolte and Sarah O'Donnell of The Edmonton Journal:

“People shouldn’t be silly to think that council wouldn’t have the courage to finalize a deal to build a great facility for a few dollars," Mandel said of the unexpected increase.

The suggestion instead is that Katz group has made some changes to the offer that is not being accepted by the city. Edmonton city council has already made many concessions and allowed for various changes throughout this process and is standing firm now that no more changes should be made to the original offering. While the $25 million increase is something they will certainly negotiate and adjust for, there are some points which they can not agree upon.

These points haven't been made public, instead opting to let the negotiations continue and keep these deals (relatively) behind closed doors; however, the Internet is a catalyst for many rumors and already they have begun.

In an interview on CBC Radio's Alberta At Noon, Edmonton journalist Paula Simons spoke about the concessions the Katz group is looking for and some of the rumours that have started to amass from this situation.

Fans and critics alike are throwing out ideas as to what is holding up this deal. It's been suggested the Katz Group is looking for the city to ink a deal on leased office space to city employees, and for the city to handle maintenance costs that were originally to be handled by Katz.

"In a letter that was obtained by the [Edmonton] Journal, [the Katz group] is saying that they don't want to be fully responsible for the operations and maintenance cost for the arenas anymore. They want some kind of cap, or some kind of compensation for the operations and maintenance which they were supposed to absorb as a part of the original deal", says Paula.

She goes on to say that there are also indications Katz Group may be looking for a greater share of profits as well, and a larger portion of the project to be subsidized by city funds--ultimately meaning that taxpayers would pay a good portion of the bill.

Will the city or province help put up the necessary funds to facilitate such a deal?

This facilities negotiation is being closely watched around the league. With several other teams looking to improve their facilities too, including the other Alberta team in the Calgary Flames. It will be an interesting outcome no matter which direction it takes.