Katz’s take on success raises ire

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This article was published 29/09/2012 (5134 days ago), so information in it may no longer be current.

Winnipeg Mayor Sam Katz’s comments about his business success have rekindled the ire of a prominent Crocus Investment Fund unitholder who wants to see the end of a dispute between the defunct fund and the Katz-owned Winnipeg Goldeyes baseball club.

On Thursday, Katz told reporters he could afford paying $1 million in cash for a home in the Phoenix suburb of Scottsdale in August because he’s been successful over a 40-year career as the owner of nightclubs, travel agencies, comedy clubs and properties, among other businesses.

“I’ve been blessed and very fortunate in many of my business ventures,” the mayor said. “You know what? If you work hard, wonderful things can happen.”

Former Crocus investor Bernie Bellan, who launched a $200-million class-action lawsuit against the defunct fund, said Friday he found the mayor’s comments provocative.

“It’s disingenuous, to say the least. It raises the question of what has gone on with the Winnipeg Goldeyes,” Bellan said.

In 2006, the receiver in charge of liquidating Crocus investments filed suit against the Goldeyes in an effort to recover $305,000 worth of interest on loans made to the club in 1999 and 2000. The receiver has since increased that claim to include principal as well as interest.

In 2007, the Goldeyes argued Crocus, in fact, made investments in the baseball club, as opposed to loans, and thus no money would be repaid until the team generates more profit. At the time, Katz said in an affidavit the team was not capable of repaying any interest and would not be capable of doing so until such time as the club has “a financially viable season.”

In light of that claim, Bellan said he took interest in Katz’s description of his financial success.

“The claim that the Goldeyes have never made a profit, I don’t know how he can stick with that. If they don’t make a profit, how much does he pay himself as the owner?”

Katz declined an interview request Friday. His spokeswoman, Rhea Yates, said the Goldeyes submitted a settlement offer last week but have yet to hear back from the Crocus receiver.

Lawyers for the receiver as well as the Goldeyes could not be reached for comment.

As a private business, the Goldeyes’ financial picture is unknown. The club is routinely among one of the most robust in North American minor-league baseball and led the American Association in attendance in 2012.

In 2008, a Free Press investigation revealed the Goldeyes club steadily increased its annual rent payments for the baseball stadium now known as Shaw Park during the early part of the last decade. In 2000 and 2001, the Goldeyes were supposed to pay $75,000 a year to Riverside Park Management, the non-profit organization that sublets the city-owned stadium, according to a copy of the original lease filed with the provincial Municipal Board.

The Goldeyes’ annual rent rose from $575,000 to almost $1.09 million from 2000 to 2005, according to financial statements filed in court in response to the Crocus lawsuit.

The ball club is one of two income sources for the mayor, outside of his city salary. Katz’s statement of assets and interests on the City of Winnipeg’s website says he gets remuneration from the Goldeyes and Showtime Productions.

bartley.kives@freepress.mb.ca