December 11, 2010
It may not be the promised "week after" the Grey Cup, but it appears that progress is finally being made on the Winnipeg stadium front. Ross Romaniuk and Paul Friesen of The Winnipeg Sun are reporting that the various parties involved will announce Monday they have reached a $190 million deal for a new facility to replace the aging Canad Inns Stadium (pictured above). The deal is expected to involve a $70 million contribution from the team (largely money from the province, to be repaid over the course of 35 to 40 yards). The Winnipeg Free Press's Bartley Kives also confirms the Monday meeting and the $190 million price tag, and weighs in with further financial details.
The $190 million figure is substantially higher than the initial planned cost of $115 million and even the first reported jump to $160 million. The long-rumoured exit of David Asper and his Creswin Properties company from the project also appears to be confirmed; they'll likely be compensated for the work they've done so far, but none of the pieces out there have information on how big that figure could be.
The most interesting part of this might be the drastic change in where the money is coming from, though. As Mike O'Shaughnessy detailed in the Free Press a while back, the original deal was quite positive for all parties involved; the city's liability was extremely limited, the Bombers would only have had to pay $15 million, the governments involved would make most of their money back through money from Asper and development taxes and fees, and even Asper would have been compensated considerably through an ownership stake in the club and land to develop an extensive shopping mall. The new deal still seems to work quite well for the governments involved (although I'm sure the Canadian Taxpayers Federation will hate it), but it puts a much heavier financial burden on the club.
As Friesen points out, this is quite a change for the Blue Bombers. For a long time, they've had more financial issues than many CFL franchises, and that didn't seem all that likely to change without outside intervention from Asper or another wealthy owner. Their controlling board also hasn't generally been known for making risky, controversial decisions. This certainly falls into both categories, as it's investing quite a lot of money that they don't currently have and pinning all their hopes on future profits from a new stadium. That's not a move to be made lightly. It's also one that bears an extensive list of things that could go wrong, as Gary Lawless writes.
Still, from this perspective, the Bombers had to find a way to get this done. Their current stadium arrangement wasn't going to work over the long haul, as Canad Inns Stadium simply didn't have the amenities necessary to bring in the big dollars needed in this day and age, especially on the corporate front. (You can read my B.C. Place coverage for a discussion of just how important that's becoming in the CFL). They weren't going to get a better shot than this any time soon, with the land already there, much of the governmental funding already in place and construction already started. Pulling out would have left the team with an unworkable status quo and little hope for a brighter future.
Furthermore, this might not actually be a bad deal for the Bombers. Yes, they're paying a lot more than they would have under the initial plan, but they're also not sacrificing their community ownership the way they would have under Asper's proposal. It's also important to keep in mind that a lot of the funds involved in that plan were speculative and based on the construction of a new mall on the old stadium site.
Additionally, the debt the Bombers are incurring is substantial, but borrowing from a provincial government with substantial reason to keep the team in Winnipeg is significantly better than borrowing from a private bank or investor only concerned with the bottom line. That's also probably why their loan is scheduled to be repaid over such a long period, and limited annual payments should allow the club to maintain a decent cash flow and invest in coaches, players, stadium upgrades and other needs. There certainly are plenty of potential pitfalls for the team here, but there are also plenty of positive possibilities. We'll see which ones come to fruition down the road.