It’s time Katz proved his skill

Hey there, time traveller!
This article was published 03/12/2010 (5766 days ago), so information in it may no longer be current.

According to recent media reports, the province, the Blue Bombers and city hall are working together to put a new funding package in place that will ensure a new football stadium gets built.

When I first read this in the Free Press sports pages earlier this week, I got very nervous.

Whatever happened to the federal government, David Asper and the University of Manitoba?

The original deal was a sweetheart for the city.

Under it, Asper paid the majority of the costs and was responsible for all cost overruns. The federal government paid $20 million, in the form of a grant to the U of M.

The province paid $15 million as a grant to the U of M and also put most of the cash up front, to be repaid by Asper with proceeds from an upscale shopping mall he proposed for the former stadium site.

The Bombers were also on the hook for $15 million, although no one has ever seen their cash. Over the past 30 or more years they have only been seen with their hands out begging from government.

The city was on the hook for $2.5 million — period.

The reward for Asper was threefold — sole ownership of a giant shopping mall in the heart of Winnipeg’s shopping mecca without having to outbid any other interested developer for the land; the pride of ownership of the Bombers (past history shows this is very important to David); and another crown jewel for the Asper family’s philanthropic legacy.

The feds would get to buy us with our own money and make it all back — and more — on the income tax from the construction workers’ wages and the GST on the materials and services needed to construct the project.

The province would get all of its money back in the same way as the feds — income tax and PST — plus the ability to use Winnipeg School Division as its backstop should Asper default on the cash advance. (The school tax portion of the new property taxes paid on the old stadium site would more than cover any costs should Asper default.)

The Bombers were to get a new playpen. They could provide more good seats (and charge higher prices), get a better team and office spaces and have a great location for the sale of team merchandise to more than 20,000-plus university students who would look fine walking around campus sporting Blue Bomber jerseys.

The university was to be a huge winner, putting in nothing and getting major improvements to its athletic facilities and guaranteed use rights to the new stadium.

The City of Winnipeg also had a super sweet deal. It put in only $2.5 million but received about $30 million for the sale of the old stadium. It was to receive full property taxes on the new shopping centre to be built on the site of the old stadium, which never paid any taxes at all. It lost no tax revenue on the new stadium site as the province exempted the U of M from all property taxes in perpetuity many years ago. The city also got off the hook for any future bailouts of the Bombers as they no longer would operate out of a city-owned site.

As a former city councillor, I could only say, “SWEEEEET!”

Now I am feeling very nervous.

With Asper fading from the picture, there is talk of the province and city paying off the construction costs with the new tax revenue from the old stadium site.

There is also talk that a high-end (and therefore high-tax) mall may not work in this area. This could mean much lower property tax revenue to finance the new stadium. The city would then forgo the expected tax windfall and be on the hook for a major share of the construction costs, including interest, for many years to come.

Whatever is built on the old stadium site would still generate additional traffic for the already overburdened streets of the area, putting the city on the hook for major improvements to St. James and Empress streets, without the extra revenue to finance them. Another loser in this looming situation is the Winnipeg School Division. With talk of housing becoming part of the old stadium site, extra demands would be placed on the division’s area schools. The province would be scooping all the new school taxes to pay itself back for the direct costs of the new stadium (which it will already have paid itself back for with the on-site income and sales taxes).

Mayor Sam: You pride yourself on being a great negotiator. It’s time to show your stuff.

Mike O’Shaughnessy is a former city councillor.