Edmonton arena on ice for now

ANDREW HANON, QMI Agency

, Last Updated: 9:49 AM ET

After months of asking taxpayers to trust them, the Oilers' owners abruptly changed course in their drive to build a downtown arena.

On Monday the Katz Group's point man on the $1.4-billion plan announced that they will postpone the public hearing on their project until they can figure out how it will be paid for -- or more specifically, how much public money they want.

"It has become clear to us that the questions with respect to the funding model have been distracting from the zoning application," said Bob Black, the group's executive vice-president of sports and entertainment.

The public hearing -- required by law for every application to rezone land -- was scheduled for June 28.

Now Black hopes to have it sometime in the fall, but couldn't say if they'd have it done and ready for public scrutiny before or after the Oct. 18 civic election.

The company will use the extra time to work out its financing plan, which it insists is a completely separate issue from the rezoning application.

When Edmonton billionaire Daryl Katz first bought the Oilers in 2008, he said he wanted to move the team out of its present arena at Rexall Place and into a new downtown facility.

He pledged $100 million to what was expected to be about a $400-million project. Where the rest of the money was to come from remained to be seen.

But when his corporation unveiled its grand plan in February, things had changed.

The group was now proposing to develop an "arts and entertainment district" on 6.5 hectares the company quietly purchased at 101 Street and 104 Avenue on the northern edge of downtown, where the Baccarat Casino now operates.

They suggested that the city could borrow $400 million to build the arena while the Katz Group developed commercial and residential properties around it. Its $100 million commitment to the arena could come from the increased property taxes collected.

After a public outcry, company officials backtracked and said this was only a suggestion. The exact funding model, they said, had yet to be worked out.

Last month, when the Katz Group held an open house at the Art Gallery of Alberta to show concept drawings of the entertainment district, thousands came out.

The public reaction was mixed. While most liked the idea, many were skeptical of such a grand plan that didn't include any explanation of how it would be paid for.

Black said Katz Group officials will take the summer to work out a financing plan "that will best meet the needs of all concerned."

They'll also tinker with their rezoning application "to reflect the input we've received from the public, and otherwise."

Scott Mackie of the city's planning department said city hall had some concerns about "design details" to make sure it conforms to the overall downtown plan, which is aimed at building more areas for pedestrians.

"With additional time we can continue working on it," he said.

Katz Group officials still hope to begin construction in early 2012.


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