A city infected with megaproject disease

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This article was published 17/09/2015 (3765 days ago), so information in it may no longer be current.

In recent years, Winnipeggers have grown all too accustomed with major construction projects winding up over budget, overdue and even tainted by alleged criminal activity.

That’s why the latest indignity surrounding the expansion of the RBC Convention Centre is especially hard to take.

The $180-million enlargement of the downtown Winnipeg facility is nearing completion within a whisker of its projected budget. At last report, cost overruns are expected to be less than one per cent of the projected budget, or about $1 million and change, which is well within the acceptable margin of error for major projects.

The expansion is only a little behind schedule, even though it’s not clear if any of the brand-new convention centre halls will be ready in time for the 103rd Grey Cup in November. The worst-case scenario calls for the Grey Cup festival to utilize existing convention centre space and hold other events elsewhere in downtown Winnipeg.

Normally, sort of on time and nearly on budget would be a cause for celebration for a project paid for primarily with public funds.

But no, not in Winnipeg, where we always find a way to do something wrong, even when we do something more or less right.

In yet another one of our city’s slowly unfolding construction nightmares, it turns out there never was enough money in place to finance the RBC Convention Centre expansion.

Earlier this year, the non-profit entity revealed it doesn’t have the cash to cover a $33-million loan that helped pay for the $180-million expansion. Even worse, the plan in place to pay back that loan could be described in charitable terms as wildly optimistic.

In plain language, it could be called mildly insane. It calls for half the loan to be recovered from property tax revenue that would flow from a new hotel that was supposed to rise near the convention centre.

That hotel doesn’t exist, and even if it did, it would struggle to generate that much money, by even the most generous calculations.

And because that hotel does not yet exist, the convention centre says it can’t attract the new business necessary for paying off the other half of that loan.

So who endorsed this plan? The convention centre board for one, whose chairman owns part of the company that owns most of the Winnipeg Free Press.

City council also approved this house of cards. Now, that same council is on the verge of approving a bailout.

On Wednesday, council’s executive policy committee voted to use proceeds from the city’s accommodation tax — that would be the hotel tax, with a fancier name — to cover the convention centre’s revenue shortfalls until such time as True North Sports & Entertainment or some other developer builds a new hotel.

It’s not like council has much of a choice in the matter.

Voters should be outraged. All Winnipeggers should be outraged. But promises of change at all levels of government should be met with suspicion

New members such as Charleswood-Tuxedo’s Marty Morantz can stamp their feet and complain about inheriting yet another steaming bag of waste from the Sam Katz administration, but the reality is the accommodation tax was created in part to fund the convention centre expansion.

In other words, this is the appropriate pot of money to tap, as much as private-sector hoteliers such as Canad Inns’ Leo Ledohowksi complain about charging guests to pay for public infrastructure.

All Winnipeggers, however, ought to pay attention to this mess, which fits into the pattern established over the past few years.

A convention centre expansion loan, conceived in part at city hall, cannot be paid back by the convention centre. A football stadium loan, conceived in part at the Manitoba legislature, cannot be paid back for decades, if at all, by the Winnipeg Football Club. A human rights museum cash advance, conceived at least in part in Ottawa, impairs the human rights museum’s operations.

And don’t forget the blind and probably negligent city purchase of a police headquarters complex that includes a mostly empty office tower that hangs like an albatross around the city’s real estate portfolio — and a warehouse whose conversion into police offices is years behind schedule and tens of millions over budget.

Voters should be outraged. All Winnipeggers should be outraged. But promises of change at all levels of government should be met with suspicion.

Until this city rids itself of megaproject disease, the indignities will keep on coming, regardless of who winds up in power.

bartley.kives@freepress.mb.ca