I’m in a bad position this week, both as a spewer of opinion and a citizen of the city of Edmonton.

I’m torn over the question of a new arena for Edmonton. Part of me says yes, we need it, let’s do it. Another part of me — the sensible, taxpayer part — says no, we don’t need it, let someone else do it.  Let’s examiner the issue, shall we?

First, do we “need” a new arena?

Well, no. And yes.

True, Rexall Place is old (relative to other North American arenas) and uncomfortable. The seats were apparently designed for a convention of anorexic supermodels; or, put another way, there are a lot more really fat people today then there were when the building was completed in 1974. Rexall has all the bells and whistles the average spectator wants, but the monied class wants the whole freaking orchestra.  It’s certainly not falling apart; if the time ever comes to tear it down, it will take a few stragegically placed nuclear bombs to destroy it. So, realistically, dowdy old Rexall Place will do just fine, thank you.

In the narrow definition of the word, only the Oilers “need” a new building. The Katz group claims it has lost money almost every year with the Oilers because they’re the only team in the National Hockey League that doesn’t control its building; Northlands, as owners of the building, gets the revenue from everything else that goes on at Rexall, and that’s a lot of bums in seats with wallets and purses to go with them.

So, we don’t “need” a new building the way we need roads and transit and emergency services. But we do need it for our image and our self-esteem as a city. Every city takes pride in its buildings , and becomes known by them. We didn’t “need” a renovated art gallery, but we got one, and it’s wonderful. I’m proud of Edmonton for building it, and if we were to produce a stunning new arena, I would be proud of that, too. It’s human nature, folks. Cities are just like people; aside from Mother Teresa and Gandhi, everybody likes shiny new stuff that they can brag about.  

So let’s agree that a new arena would be a good thing for Edmonton. And let’s quickly agree that downtown is the only place to put it; cities are judged by the health of their downtown. Ours is improving rapidly (see Fish’s take on pg. 7), but it is a work in progress. The proposed location is a dead zone, an urban scar with a giant parking lot and the world’s ugliest casino. There may be other downtown locations that are suitable, or better, but the bottom line is downtown is the only place a new arena should go. Not in the suburbs, not in some giant expanse of undeveloped land outside the city. Showcase buildings go downtown. End of discussion.

So now we have a general agreement that a new building is something we want (but don’t need), and it should go downtown. Now all that remains is, who should pay for it.

This is where it becomes a Rubik’s cube of possibilities. According to Katz, a new building will cost about $400 million, of which he will kick in $100 million, presumably by cutting back on his kids’ allowances.  Bureaucrats and Katz functionaries are concocting all sorts of schemes to finance the building, through things like area improvement levies (tax increases for businesses in the area, based on the presumed but not assured rise in their property values), and surcharges on tickets (basically, a ticket tax). Katz says businesses will rush into the area around the arena, resulting in increased tax revenue to fund the building. This is all pie-in-the-sky stuff.

But, I have no doubt that federal and provincial money will materialize for the building. We’re going to have a federal election sometime within the year, and wouldn’t a $100 million donation from the Tories be a nice election plum? We’re going to have a provincial election by 2012, and a desperate Ed Stelmach will promise untold millions to the project if voters just reject that nice Danielle Smith and her Wildrosers. If everyone just stays cool, provincial and federal vote bribing money will arrive. If we can bring the city contribution down to, say, $100 million, with half coming from various levies and tax hikes, and the other from city coffers, this can get done.

But there are two more, very substantial issues to deal with.

First, Katz wants nothing to do with Northlands. The non-profit organization has a Svengali-like hold over some members of council, who will defend it to the death. Personally, I don’t care if Northlands runs the building. They’ve done a great job, but they, too, are substantial beneficiaries of government largess. (In 2009, Northlands got $10 million the Alberta Lottery Fund, $9.7 million from Horseracing Alberta, and $2.4 million from the City of Edmonton Support Agreement.) I have nothing against Northlands, but neither do I think they should automatically be allowed to run a new building on goodwill alone. Katz wants to run the building, and rake in all the revenue. And here’s the rub.

Katz wants others (that’s us) to pay about a quarter of the cost of the building, and he gets 100 per cent of the revenue. This will not fly. If Daryl Katz wants 100 per cent of the revenue from a new coliseum, then he should put up 100 per cent of the cost. But, if some sort of deal could be made where Katz gets a percentage of the profits from the building, and the city gets a percentage of the profits as the co-owner of the building, then we can make a deal.  But as long as Katz stands firm on his ‘you build it, I profit from it’ stand, we shouldn’t even be talking to the guy.