City asked for loan guarantee extension to $20M for Diversity Gardens

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This article was published 04/07/2019 (2286 days ago), so information in it may no longer be current.

The Assiniboine Park Conservancy is asking the city for another $3 million in loan guarantees for its Canada’s Diversity Gardens project.

The group that oversees Assiniboine Park and the zoo said the price tag has jumped to nearly $98 million because of construction delays and an increase in the price of steel. In addition, the discovery of an underground stream resulted in the need for more expensive foundations.

In a report to the executive policy committee, the conservancy is asking for a $3-million increase to its operating loan, which would bump the total to $20 million. It’s also asking for a three-year extension to the loan guarantee’s expiration date, which would push the deadline to the end of 2023.

“We’re not actually giving them the money, we’re agreeing to be their co-signer,” said Coun. Kevin Klein, the city’s representative on the conservancy’s board. “It’s not the city or the taxpayers being out any cash.”

The report said the complex design, which includes the Leaf indoor structure, that offers precise light, temperature and humidity levels for a variety of plants, played a role in the price jump. It is the last major phase of the park’s redevelopment, and is set to open in late 2020.

“Although (the conservancy) has been very successful in fundraising, the extent of the new cost estimates represents a significant change,” reads the report, which was authored by Winnipeg interim chief administrative officer Michael Ruta. “The city highlighted potential interim measures in terms of reducing the scope of the project and delaying the award of future contracts, such as landscaping, until private fund raising is confirmed.”

Assiniboine Park Zoo spokeswoman Laura Cabak said the conservancy is in a unique position because of its affiliation with the city.

“We don’t own the assets in the park, so we can’t go to a bank and get the financing to pay the bills,” said Cabak. “The bridge funding is needed to keep things moving.”

Loan guarantees represent financial commitments from the city which could result in financial loss in the event of default, the report says. It says the conservancy prepares audited financial statements and has established a financial reporting system and a history of meeting its financial commitments.

“The loan guarantee is not (the city) cutting a cheque for $3 million,” said Cabak.

Cabak said the project, which will bring interactive biomes and a tropical butterfly garden to Winnipeg, will help enhance Winnipeg.

“It will be a really exciting addition to everything that we’ve done in the park over the past decade,” she said. “When you look at the big picture… this is another addition that’s helping to put our city on the map.”

The project’s estimated cost has had several increases since its inception. In 2017, it was slated to come in at about $75 million, a jump from the expected cost of $50 million in 2012. This year, it has jumped to $97.8 million.

The city report says the conservancy plans to continue fundraising to cover the cost increases, and needs the extension from the city to allow for adjustments in cash flow.

The seven-person executive policy committee will vote on the proposed extension at a meeting July 9.

caitlyn.gowriluk@freepress.mb.ca