A day before city councillors were scheduled to receive an update from City Administration over the ongoing downtown arena negotiations – Daryl Katz has publicly turned down the mayor’s invitation to address the city.

In a letter addressed to Mayor Stephen Mandel, the owner of the Oilers said he was disappointed with recent communications with the city on the downtown arena project.

Katz stated:

We had thought we were making considerable progress, but it seems from your recent communications that, in fact, we have gone backwards.

In the words of the leadership committee you appointed nearly five years ago, this project was to be ‘Edmonton’s greatest opportunity’.”

A year ago, a deal was reached for cost-sharing of the arena following discussions in New York – slated to cost about $450 million.

In that time, the Katz Group has proposed a number of significant changes to the deal – including an annual operating subsidy.

In the letter, Katz goes on to say:

Since New York, we have been able to model anticipated operating costs and revenues based on the arena’s actual design, and with input from AEG, ICON and Bigelow – one of North America’s leading venue food and beverage consultants.

The simple and unfortunate fact is that the costs came in higher than expected, and revenues lower.

This, as well as our need for operating support, has been a subject of ongoing discussion with you and your administration going back to the spring. It may be true that City Council was unaware of these discussions, but I do not think the Katz Group should be blamed for that.

The letter goes on to state Katz’s ‘bottom line’, that a 35-year location agreement can’t be signed – and the Katz Group won’t invest millions into the arena the city would own, or spend more than $1 billion on other private development around it – before a “solution that makes economic sense for both parties, and creates a sound basis for the long-term sustainability of the Oilers in Edmonton” is forged.

Katz continued, saying there are a total of fifteen open issues in the arena negotiations with city officials – and the company would not make a proposal to city council without the support of administration.

The last time the Katz Group spoke publicly at City Hall was in July 2010, since then, negotiations have continued behind closed doors.

In late September, the mayor set October 17 as a ‘drop dead date’ for the Katz Group to go before city council with what the company wanted.

On Wednesday, councillors will hear a verbal update on arena negotiations.