Every case is different. In Edmonton there's a severely underdeveloped downtown ripe for development with the right sort of stimulus. I've seen those studies you cited and more like 'em. I've also seen conservative estimates by city planners pegging development potential at $2 Billion probable and almost $5 Billion possible with the arena entertainment district being one of the prime accelerators.

What's not up for debate is the need for a new arena. Whether we like it or not the city will either dump $250 Million (more like $300M now) into RX1 for a major reno or downtown. There's also not much debate on which location has a greater opportunity for urban redevelopment. I had a meeting at RX1 the other day and was reminded how crappy an area it sits around when I drove down there (it's far more depressing when you drive in during the day let me tell you!).

I'd also add that the interest rate difference between private (banks/VC houses) and public (municipal/govt) financing on deals of this magnitude can easily be the difference between an unacceptable profit margin/no go and a favorable venture.

Of course this is all secondary since David Staples just released the real reason why things went so bad yesterday. Katz Group says that they need an annual subsidy of $6 million to make it work. Seems to me that could be made up with additional ticket taxes or some sort of annual lottery, but hey, what do I know?

David,

It brings me no end of amusement that you feel that somehow your journalism degree gives you some special insight into the field of economics. Every major paper published in the field of economics finds that arenas are a shell game. You move some money from the suburbs into the downtown as people go to the game buy a steak and some beer while they're there. That and they buy hockey tickets rather than tickets to the latest Tom Cruise movie at the Cineplex.

The question is why should the taxpayers of Edmonton give a damn if people are spending their money in Hawkstone, Terwilliger, Belle Rive, Castledowns or downtown? I personally could not care less where people spend their money it has no real impact upon me personally so why should my tax dollars be devoted towards desperately trying to channel it in the direction of the down town area?

The idea that we need to redevelop the downtown area seems to assume that this is necessary. Why? If the market dictates that condos should be built south along the Hendey in Windermere or up in Schonesee great, let people live where they want and people will build where its profitable. If there was this great demand for downtown condos the land would be bought and they'd be built. Some have been over the last half a dozen years and amazingly it all happened while the hockey team played off in a gulley in Highlands.

Every independent study shows that arenas have essentially no economic impact. They do not create anything new. New people and businesses do not come to Edmonton on the basis of how nice one's arena is. Things like economic growth, educational and employment opporunities are what draw in new people and businesses. Shiny new arenas do not do this.

Estimates of revenues provided by the City don't factor in the fact growth would occur on its own whether its downtown or elsewhere in the city. And when you've your heart set setting a half a billion dollars on fire from an economic perspective you can draft any manner of optomistic estimates about how everything is going to be sunshine, lolly pops, mom and apple pie. It doesn't make anything said valid, independent or realistic.

The arena is essentially opperating in a closed system. That system is the entertainment market in the greater Edmonton metropolitan area. Outside of that area it is irrelevant. People are not going to flock to Edmonton's downtown from Outer Mongolia, the furtherest depths of the Congo or the sunny beaches of Australia just because we built a half a billion dollar gleaming zinc monstrosity in the middle of our city. You get the same people from Edmonton, St. Albert, Sherwood Park, Spruce Grove, Leduc etc that would come in to an Oilers game now, coming to an Oilers game in a new stadium but you have two or three thousand more seats. That's it.

I'd say its irrational to spend half a billion to ensure a couple thousand more people can get Oilers tickets but gosh I only have degrees in economics and law not journalism so what would I know?

I sent you that video weeks ago, didn't even get a reply, much less any credit.

I'm gonna grab a beer to soothe my wounded ego.

Thanks for the laugh Chris :) Your well thought out post is a rebuttal to the wrong David :P

Just as Daryl Katz is not actually Batman - David S is not actually David Staples .... Or is it David Staples is not really David S?

No matter.

..... However David S COULD be Batman.

I wish more Oilers fans would just admit, "I want a new rink because it's frickin' cool!"

ubermiguel, The old barn sure isn't so YES,I would like the coolest rink in the league to go with the coolest team and the coolest fans. Can they get the beer a little cooler too?

Wanye, the video was cool too! Now I know why the kids are all over it and dudes been everywhere on the tube lately.

Chris, your perspective is limited to residential only. I also care less where residential growth tale place. The FAR GREATER impact is in corporate growth which Edmonton was leading the nation for growth circa 1980, and has fallen every year since.

Every other city has invested in its business sector core, Edmonton has not.

By ANY worthy economics study the result is simply millions "saved" through neglect has cost 100's of millions if not a billion dollars in growth.

Taxpayers should have a very real interest in if money is being spent in downtown vs the burbs.

A sprawling city like Edmonton has become is the most inefficient city to operate. If you an funnel people back into the existing core instead of letting them to continue expanding outward then the city can better focus it's spending more efficiently.

An arena district is not a magic bullet it doing that but it can be a big piece of the puzzle. Both from an infill perspective and an attraction for people to gravitate to.

Further, all the economic reports that talk about a simple shifting of where the money is being spent tend to ignore that a portion of that money can be shifted right out of the city. It is not the boom it sometimes gets presented as but it is a luxury that can benefit a city and area if done right.

Ask MLSE if their new arena turns a profit. In a major market with diehard fans, you can easily turn a profit.

It would be harder in Edmonton, but there is still a profit to be made. Both sides need each other to make it work. Make no mistake money can be made, but neither side wants to invest too much. Eventually they will figure it out, however, when they do the cost will be much higher than it is now.