Stephen Mandel says threat of losing Oilers was 'big card' in arena deal

Former mayor Stephen Mandel is defending the deal the city made with the Katz Group to build Rogers Place, and says the council of the day faced the very real prospect of losing the team had negotiations fallen apart.

Deal's community benefits agreement criticized for not setting targets for jobs, training, affordable housing

The Katz Group's ownership of the Oilers changed how the city negotiated the arena deal. During those negotiations, losing the team was a real possibility, according to former mayor Stephen Mandel. 1:30

Former Edmonton mayor Stephen Mandel is defending the deal the city made with the Katz Group to build Rogers Place, and says the council of the day faced the very real prospect of losing the team had negotiations fallen apart.

With the arena set to open in September, community and social agencies have been openly critical of what they call a vaguely worded community benefits agreement they say let the Oilers owner off the hook.

That agreement, critics say, lacked specific targets for employment, job training and the construction of affordable housing. The groups are also upset the jobs at Rogers Place are mostly part-time minimum wage positions.

They now want the city to help them negotiate a binding benefits agreement with Daryl Katz, owner of the Edmonton Oilers and operator of the city-owned Rogers Place.

But in an interview with CBC News, Mandel said the Katz Group was able to use the Oilers' future in Edmonton as the ultimate bargaining chip during long and difficult negotiations.

"I think it was a big, big card that the Katz Group were able to play," Mandel said. "In most negotiations, the city always has the upper hand, because we control the world around us. In this instance, we did not control the world around us."

The former mayor said the deal almost fell apart at many points, and he said Katz probably felt he also gave up too much.

Ultimately, Mandel said it's not the responsibility of the Katz Group to solve social issues in the city.

"It's collectively our responsibilities, and the province should do a better job ... in helping those who are in need," he said.

"And so to place that upon the development is a bit onerous and a bit unfair."

Groups from inner-city neighbourhoods that surround Rogers Place are pointing to community benefits agreements made in other cities, including Los Angeles, Pittsburgh and Vancouver, that laid out requirements for affordable housing, training and jobs.

They say Edmonton's agreement, a one-page document titled Schedule D, is too vague. The Oilers agreed to use their "best efforts" to encourage employment and training.

McCauley resident Mike Van Boom said those efforts have resulted in few benefits for his community in building affordable housing and creating jobs that allow people to earn a living wage.

He wants the city's help in getting a better deal with Katz.

"City council got us a bad deal," he said. "That doesn't mean we can't still have one between the community groups and the Oilers Entertainment Group."

A view of Rogers Place on Aug. 29, 2016. The new home of the Edmonton Oilers will open for public tours on Sept. 10. (Rick Bremness/CBC News )

Issues and opportunities

The terms of the arena benefits advisory committee made up about half of Schedule D's single page.

The committee included representatives of the Oilers Entertainment Group, the City of Edmonton, inner-city community leagues and social service agencies.

The members were to "work together to address the issues and opportunities of the arena in the local community."

Van Boom was part of that committee for a year. He said the vague language in Schedule D set the tone for the meetings, especially when groups asked for affordable housing and living wage jobs.

"They would say, 'That's not what this table is for, because Schedule D is what we hold to, and that basically says that we don't have to do any of those things,' " he said.

In an interview last week, city representatives said the committee's intent was never to work out specific benefits for the community, but to provide updates and a forum for responding to issues related to arena construction.

Coun. Ben Henderson, who was a member of the city council that approved the arena deal, said that wasn't his impression at all.

He thought the committee was set up to negotiate benefits for the surrounding neighbourhoods and agencies — "that it was going to be done by all the parties together, as part of this working group, and that it would be worked out in the process," he said.

"And that it precisely wasn't written in stone, and that's why the committee was set up, to figure out what made the most sense for everybody."

Henderson said council wanted a defined community benefits agreement, but ultimately the demand got dropped in what were tough negotiations, even though he doesn't recall a pushback on the issue by the Katz Group.

"I think there was so much at stake in the arena, and there were so many other things that were much more contentious," he said.

"The community benefit agreement was something that we wanted to have. I think all of council wanted to have it. I think there were other things that were felt to be far more important to make sure we got."

Edmonton Oilers owner Daryl Katz, left, with NHL Commissioner Gary Bettman in 2011. (John Ulan/Canadian Press)

Can't solve social ills with an arena

In the end, everything worked out, Mandel said. The city secured a 35-year commitment from the team to stay in Edmonton and got a deal to build an arena to help revitalize the city centre. 

"It's a spectacular building that is going to create a new life downtown," he said.

"Mr. Katz said that he would invest $100 million in addition to what he would commit to the arena. I think he's doing more than that, probably about ten-fold. Maybe more than that."

Mandel said thousands of people worked on the arena construction, which allowed those workers to pay their rents and contribute to the city's tax base.

"I think the benefits in the city are way more substantial than anybody has estimated," he said. "So, for those who thought they would have wanted more, I think that we did the best we could."

Coun. Scott McKeen represents the ward Rogers Place sits in. He was elected after the deal was passed, but like Mandel, he thinks it is unrealistic to get the arena to solve the city's social ills.

"People look at a project like the arena and think it should do everything for everybody," McKeen said. "And I don't think that's possible."

Still, Van Boom hasn't given up. He plans to go to council's executive committee on Tuesday to ask the present council to help communities get a better deal.

"One hour of community skate time is nothing," Van Boom said.

"Part-time minimum wage jobs that are a benefit to the community? They're not a benefit to the community. We're asking for more and you're refusing to go there."

Van Boom said he's not out to destroy the Oilers. He thinks the team has done good work in Edmonton through its community foundation.

He said he simply wants the kind of deal that has become standard for large developments across North America. 

With files from the CBC's Mark Harvey