Cost flap delays start on stadium

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David Asper: part of tendering process (WAYNE.GLOWACKI@FREEPRESS.MB.CA)

After days of tap-dancing, the reasons for construction delays at the site of a new football stadium are coming out and it's all about money and rising costs.

The original $115-million price tag for a new stadium to be built at the University of Manitoba could be low and the partners are haggling over who will pick up any overruns.

Construction of the stadium, to be shared by the University of Manitoba Bisons and Winnipeg Blue Bombers, has yet to begin while financial responsibilities are debated.

One estimate has the cost of the stadium running in the neighbourhood of $139 million, $24 million above the original price tag.

Also being discussed is a scaled-down version of the stadium in order to stay in line with the original cost estimates.

Creswin Properties chairman David Asper, the driving force behind the project, says the cost of the stadium changes on a daily basis.

"It's a sequential tender-and-design process," Asper said. "The tenders are rolling in and the costs are in flux. We start with a concept and then put out the tenders and as they roll in, the costs change. The prices aren't fixed. Sometimes a tender comes in and it's too much and you send it back out. Cost is in flux as you roll towards a final product. I don't know what you're hearing, but you have to understand the process. The cost fluctuates as you work through the process. One day the cost could be $100 million and the next it could be $160 million. That's part of this process."

Creswin is contractually bound to pick up cost overruns, but there is debate about whether the developer should receive some help on the financial front.

"Creswin is responsible for cost over-runs, but we have yet to finalize our agreement and we're working to get that done," Asper said.

That's where the construction delay comes in as the partners involved try to decide whether Creswin should bear the brunt of any overruns alone or if extra incurred costs on certain aspects of the project should be shared.

Mayor Sam Katz was firm on his position.

"My understanding is that Creswin is responsible for any cost overruns, if there are any," Katz said.

The new stadium project is a partnership between Creswin Properties, the University of Manitoba, the provincial government, the City of Winnipeg and the Blue Bombers.

Bombers president Jim Bell says the club is involved in the cost conversation.

"I know our board is in the midst of those discussions. With any megaproject like this, there are always concerns about cost overruns," Bell said. "All the partners want to take a look at where we are at this point in the budget process."

Creswin has been poised to begin work on the stadium for a number of days but has held off on digging until they know who is paying for what.

A spokesman for Premier Greg Selinger did not respond to interview requests Wednesday, but Selinger said Tuesday that the stadium project is still a go.

"I understand that the tenders have come in," Selinger said Tuesday. "And they're taking a look at them and seeing what the implications of that are and they're sorting all that out, so we'll see after they verify the numbers.

"We haven't seen all the final information that has come out from the tenders, and everybody is doing their due diligence right now to move the project forward," he said. "But everybody wants the project to move forward."

The original deal called for a $137.5-million project at the U of M, with $115 million going towards a new stadium and $22.5 million in government grants towards improvements in fitness facilities at the university.

The province is providing bridge financing for the project and Creswin is slated to repay the $90-million loan in exchange for ownership of the Blue Bombers.

The football team is on the hook for $15 million of the cost and the province is chipping in $15 million in stadium grants.

The $115-million price tag was Creswin's conceptual figure and now that work is set to begin on the stadium, costs have risen.

gary.lawless@freepress.mb.ca

Republished from the Winnipeg Free Press print edition July 29, 2010 C1