November 09, 2010
Last week, The Winnipeg Free Press broke the news that the Blue Bombers' new stadium was now projected to cost $45 million more than originally expected. That news continues to have significant repercussions, and the Free Press broke another interesting story on that front today. The paper's Bartley Kives reports that former Canwest Global part-owner, director and executive vice president David Asper (pictured, top, at the May 2007 press conference announcing that his stadium proposal had been selected) wasn't at the latest meeting over the stadium, and apparently neither were any representatives of his company, Creswin Properties. That's notable because that company was expected to build the stadium under the existing agreement, so their complete absence from these talks suggests a new direction may be on the horizon.
The structure of the existing stadium deal is quite complicated, but it basically involved Asper's company building a stadium and receiving some reimbursement from the city, the province and the University of Manitoba (in the form of loans and cash) and the Blue Bombers (partly in equity in the team, partly with the team repaying some of the loans). Creswin was supposed to put in some money of their own and handle cost overruns, but that got messy last week with the news of how much more the stadium was expected to cost; Asper argued that cost overruns only apply once the final project cost is determined, meaning his company shouldn't have to pay for them. There was some talk of potentially scaling the stadium down to a more modest design, but The Winnipeg Sun reported that Manitoba premier Greg Selinger and Winnipeg mayor Sam Katz, among other stakeholders, weren't high on that idea.
The news of the overrun made it certainly seem possible that Asper's company could be booted out of the project, and Free Press columnist Randy Turner made a compelling argument last week that the other stakeholders should ditch him as soon as possible. According to Kives' piece, it does look like that's going to happen now. Asper's absence from that meeting alone wouldn't normally be enough to conclude that, as neither Selinger or Katz was there either, but senior officials from the municipal and provincial governments and the university were all there; it would seem curious not to have a Creswin representative present if the plan was still to go with them. Moreover, this isn't just putting two and two together to make five, as Kives was able to get (anonymous) confirmation that discussions about moving on without Asper are ongoing:
Sources told the Free Press discussions are now underway to create a game plan to complete the stadium without Asper as the quarterback.
Creswin has been sitting on the hot seat since July, when rumblings first emerged about cost overruns at a project originally slated to cost $115 million and the possibility of scaling back the project design.
Moving forward with a new company would seem plausible. The terms of the original deal had Creswin putting up very little money of their own, which would suggest that a replacement could be found. It was proposed that of the $115 million cost of the stadium alone (there's also $22.5 million contributed by the federal, provincial and municipal governments for recreation improvements at the university, but it seems that aspect of the project is proceeding as planned and is being handled separately), only $10 million was supposed to be directly paid by Creswin. Of the remaining $105 million, $15 million was expected to be a direct grant from the province. The other $90 million was proposed as a loan from the province, with the Bombers repaying $15 million of that and Creswin repaying the other $75 million (reportedly generated through a development on the site of Canad Inns Stadium and in exchange for ownership of the club). It's obviously difficult to make judgements on the situation without all of the relevant information, but it would seem easier to find a new construction company to undertake a similar deal to that than it would if the company was expected to front vast sums of cash on their own.
Creswin has paid for the design and consultation work to date, and that can't be ignored. Kives reports that the cost of repaying them for that is in "the low millions", however. Millions of dollars are obviously significant, but when considering the scale of a $115 or $160 million dollar project, that isn't as nearly as bad of a figure for the province and the Bombers as it could be. They might even be able to make that up if they're able to find another company to undertake a similar deal but build a stadium for the originally proposed price of $115 million; $115 million plus a $10 million buyout would still be $35 million less than constructing Creswin's proposed $160 million stadium.
There are several important things to note here. First, scrapping the project entirely doesn't seem reasonable. Considerable excavation, design and consultation work has already taken place, and it would be a shame to throw that away. Second, the status quo isn't really an option, either; the Bombers could stay at Canad Inns, but that stadium would apparently need $52.5 million in renovations over just the next few years to remain viable and safe. Third, even $160 million for a new stadium doesn't seem nearly as bad when you consider that renovating B.C. Place is going to cost at least $565 million. Any new stadium in Winnipeg will be for more than just the Bombers as well, as the idea is to also use it for amateur sports events (including the University of Manitoba's football games).
Still, that doesn't mean that all costs are justified, and Asper's history with the project doesn't necessarily mean that he should be able to see it through. In the end, the province, the city and the team owe it to their taxpayers and fans to find a way to build the best stadium they can in as cost-efficient a manner as possible. At the moment, it looks like that may not involve Asper.