November 05, 2010
Stadium projects are a hot topic in many CFL cities at the moment, but the situations in Hamilton and B.C. have drawn much of the attention. Winnipeg wound up back in the national stadium spotlight yesterday on the eve of their final 2010 game, thanks to a piece from Gary Lawless of The Winnipeg Free Press that reported the new stadium proposed for the Blue Bombers and the University of Manitoba Bisons is now expected to cost $160 million—$45 million more than originally budgeted.
The stadium's original price tag was $115 million, but the original deal also included $22.5 million for recreation improvements at the university, making the total cost of the project $137.5 million. It appears the $160 million figure also only covers the stadium. If the recreational improvements are still part of the project and still expected to cost the same amount, that would raise the total project cost to $182.5 million.
This could get quite messy. Excavation on the site is already underway, so revamping the design at this point of time wouldn't be particularly easy. Moreover, Manitoba premier Greg Selinger told The Winnipeg Sun's Paul Turenne that scaling down the stadium to fit the original budget isn't a desirable option. Selinger, Winnipeg mayor Sam Katz (famed for his unique combination of soccer and martial arts) and Creswin Properties chairman David Asper (former part owner, director and executive vice-president of the old Canwest Global media chain) are apparently set to meet in the next few days to discuss the issue, but there aren't likely to be any easy solutions here. The above picture shows Asper (foreground), Selinger (back, right), Katz (behind Asper) and Bombers' board of directors chair Ken Hildahl (back, left) in happier times at the March 31 press conference to announce the new stadium; that group's going to have to get creative in the coming days to find a way to make this work.
This stadium project hasn't been a particularly smooth one from its moment of inception. There's been discussion about a new facility in Winnipeg to replace the aging Canada Inns Stadium for years, but a deal was only signed this April. According to the Free Press, that deal involves municipal, provincial and federal funding, as well as contributions from the university and the Bombers. Here are the details from Lawless' report:
Creswin signed a memo of understanding with the other partners -- the University of Manitoba, the Manitoba government, the city and the Blue Bombers -- to build a stadium for $115 million.
The provincial government agreed to float a bridge-financing package of $90 million to get the project started.
Under that arrangement, Creswin would repay $75 million of the loan in exchange for ownership of the Blue Bombers. The $75 million was to be generated by a retail development on the site of the old stadium at Polo Park.
The football club would pay back the remaining $15 million of the loan. Creswin would contribute an additional $10 million and the province would grant $15-million to the project.
Creswin chairman David Asper has said he is committed to building a stadium for $115 million. Creswin signed a memo of understanding to that effect, but included was an agreement for the real estate firm to pay for any cost overruns.
Asper contends overruns kick in once the final price of the project is determined and he's not responsible for the gap between the original design estimate of $115 million and the final number after all tenders are received.
Asper has said his firm will produce a stadium for $115 million and if the specifics originally presented to the public cost more, then "choices will have to be made."
From that, it looks like the stadium could become mired in a contentious debate about what exactly counts as a "cost overrun". It's certainly going to be interesting to see if what caused that $45 million price jump comes out. There's also still a chance that the other stakeholders could cut Asper and Creswin out of the picture entirely, either to build the stadium themselves or to work with another company to do so. That seems a bit unlikely considering that the project's already underway, but a lot may depend on how Asper and Creswin have handled things to date. This is going to be a situation to keep an eye on.