Stadium becomes political football

Hey there, time traveller!
This article was published 03/08/2010 (5541 days ago), so information in it may no longer be current.

There’s a showdown coming between partners in the new football stadium consortium over design and cost overruns with far-reaching implications.

By the time this is all worked out there could be a different look to the proposed stadium, the partnership and the level of government contributions to the project.

Creswin Properties is determined to build a stadium that comes in close to the original estimate of $115 million, rather than the $139 million the proposed design is now expected to cost.

However, the City of Winnipeg has stated it is legally bound to the original specifications of the stadium and any substantial alterations would have to be put to a vote at city council.

Somewhere in the middle is Premier Greg Selinger, whose provincial chequebook and political future hang in the balance.

Excavation on the stadium will begin this week, but don’t consider that the end of this saga. Digging the stadium hole is only one tendered contract and at about $1.5 million, it’s a small part of the overall budget.

Political brinkmanship last week got this project started, but very similar tactics could result in big changes at any moment.

Here’s the rub: Creswin believes its obligation is to build a stadium that costs in the neighbourhood of $115 million. Creswin believes it is contractually bound to pay for cost overruns that occur at that stage — somewhere in the five to eight per cent area above the $115 million cost.

Creswin does not believe it must deliver the exact stadium specifics that were used when the partnership between the developer, City of Winnipeg, University of Manitoba, Winnipeg Football Club and the province was formed.

At that point, the estimate of $115 million was very rough, according to Creswin, and the dollar figure — not the design –was the only fixed element of the deal.

Design choices must be made to reach that figure rather than adding cash to the deal to realize the design, Creswin contends.

The City of Winnipeg sees this in an entirely different manner and if major changes are made to the stadium design they won’t go along.

A letter from the city’s chief administrative officer, Glen Laubenstein, went out last week to Mayor Sam Katz and a number of project partners that clearly states the city’s position.

The letter informs the mayor that Creswin potentially could change the design of the stadium and delete the overhead protection for 80 per cent of the seating. The CAO informs Katz in the letter that in the opinion of city lawyers a change of that magnitude would require approval from city council and that council is not scheduled to meet until September.

When Creswin was informed of this development last week, its message to the province was clear — either begin the project now or we’re out.

Selinger and his people went into crisis mode and negotiations eventually resulted in a Band-Aid solution.

The stadium partners verbally agreed last Friday to begin excavation but there’s been no final solution to the debate on cost overages and possible design changes. The province will advance a small portion of its $90-million bridge loan to get digging underway even as the squabbling continues.

Excavation is expected to take three months and all tenders for the stadium should be in by the end of this month.

That’s when things will heat up again as the issue of design and cost overruns comes to a head. If the tenders for the original design produce a cost in the neighbourhood of $139 million as expected, Creswin will push for alterations and the city will push for more cash from the private sector.

The city is a key player in this deal as it controls the land at Polo Park where the old stadium sits that Creswin plans to use for a retail development to fund its repayment of the bridge loan.

In essence, this battle is now between Creswin and the city, but Selinger finds himself stuck in the middle, absorbing many of the blows. The rookie premier is loath to have this deal crater with an election scheduled for Oct. 4, 2011.

The city won’t bend and Creswin doesn’t appear to be prepared to throw an extra $24 million — or more — into the pot.

Ultimately, this leaves the province with the choice to ante up or possibly let this deal crumble and live with the fallout.

Will writing another cheque make Selinger a hero or a patsy? You be the judge.

gary.lawless@freepress.mb.ca