Ticket tax an issue, Katz states in letter

The use of a ticket tax to raise $125 million for a new downtown Edmonton arena was raised as one of the "significant outstanding issues" in a letter sent last week by Oilers owner Daryl Katz to Mayor Stephen Mandel.

"I wish to make it clear that I have not agreed to that," Katz writes, adding he can make himself available to Mandel for discussing the reasons why.

Last week, city administration released a number of reports which outline ways to finance the $450 million replacement for Rexall Place. The $125 million "user pay" option is discussed as one of the alternatives.

While noting the negotiating table is the best place for such discussions, Mandel responded to Katz in a letter sent March 30. 

"I feel I must reiterate ... my position that a user pay component is a vital part of a successful, fair, competitive financial model," Mandel writes.

Mandel brushed off the significance of the letter when speaking to reporters Monday, stating that no one has agreed to anything.

"[Katz] wanted to clarify his position, and I think that my letter back to him clarified our position," Mandel said.

Coun. Linda Sloan says Katz' position on the ticket tax means the city is being asked to assume more risk on this project.

"That's a quarter of the financing and if that is eliminated then it basically means that the city is holding all of the risk and all of the financing for this project and therefore, I will be highly resistant to any attempts to have the discussion in private," Sloan said.

Edmonton city council will discuss the arena reports on Wednesday. In addition to the $125 million raised by the ticket tax, the city proposes to raise an additional $125 million through a tax known as the Community Revitalization Levy.

This tax would apply for 20 years to all new development in a nearly 30-block zone around the proposed arena.

Katz has pledged $100 million towards the project. The source of the remaining $100 million has not yet been determined.