Edmonton to end arena talks with Oilers' owner Katz

Edmonton city council has unanimously passed a motion by Coun. Dave Loken to immediately cease all downtown arena negotiations with Oilers' owner Daryl Katz.

Motion passes unanimously by Edmonton city councillors

The motion to end all arena negotiations with The Katz Group was introduced late Wednesday afternoon by Coun. Dave Loken. (CBC)

Edmonton city council has unanimously passed a motion by Coun. Dave Loken to immediately cease all downtown arena negotiations with Oilers' owner Daryl Katz.

The first point of the motion reads: "As a result of Mr. Katz’s letter and unwillingness to have an open discussion with council and the frustration of the interim design agreement, all negotiations and ongoing city work related to the October 26, 2011, framework be ceased immediately."

Some councillors asked for an amendment to the motion, so negotiations were suspended, not ended. They argued that would leave the door open for further talks. But others argued that it's time to end discussions and explore other options.

"It's fairly apparent at this point that Daryl is just not that into us," said Coun. Kerry Diotte.

Although council passed the motion, Loken said council is still open to communicating with Katz — but only in person, not through letters.

"If you want to talk to us, we have a meeting in two weeks," he said.

"The door is wide open, Mr. Katz. We're still willing to make a deal here."

The motion also calls on adminstration to report to council about the city's "current, transferable investments in a potential downtown arena project" and how to keep NHL hockey in Edmonton.

The motion came one day after Katz announced in a letter that he would not attend today's meeting to explain his outstanding issues with last year's framework deal.

A company spokesman told CBC News that The Katz Group would not be commenting on Wednesday.

'Wrong to hold us up for ransom'

In October 2011, the city and Katz reached a framework agreeement on how to proceed on the arena development. 

Mayor Stephen Mandel said that negotiations became increasingly difficult because The Katz Group kept making more demands, without providing the information to back them up.

He said the situation became unfair to the city.

"There is a love for that game here that does not exist in any other city and I think it's wrong to hold us up for ransom," he said.

Subsidy a sticking point

Councillors were told at Wednesday's meeting that there are three critical areas of contention: additional costs for the Winter Garden,  a tenant for the office tower proposed by Katz, and an annual $6 million operating subsidy.

Mayor Stephen Mandel says that Oilers' owner Daryl Katz needs to justify why he needs more money from the city. (CBC)

In a news conference after the meeting, City Manager Simon Farbrother confirmed that talks went awry in August, when The Katz Group put the subsidy on the table.

"We think the arena will operate at a profit and based on that, it's hard to justify an operating subsidy," Farbrother said.

So far, the city has spent $90 million on the arena project: $15 million for the design and $75 million on land. Mandel acknowledged that he is concerned about these costs.

"Absolutely," he said.  "We did it on the trust of an agreement in October 2011 so I am very concerned about it."

Mandel hopes that Katz won't try to move the Oilers. He believes the NHL should respect that council tried "desperately" to make a deal to keep the team profitable.

"Let me assure you, there is a profit at the end of the day, from this arena, and that the reasonableness that this city has portrayed and this council has portrayed is substantial," he said.

"And I think the NHL has to respect that and and I believe [NHL Commissioner Gary Bettman] will and the other owners will."