New Winnipeg Stadium approaching $400 million

Discussion in 'CFL League Talk' started by Bronko, Jun 20, 2016.

  1. Bronko

    Bronko Member

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    and countin' - - - won't put any editorial slant on this other than to post excellent CBC analysis. Just know some inter-galactic troll vermin (aka Super-Troll and Bobby Vermin) will pelt the site and deny existence of over-run and mismanagement of IGF.

    Analysis
    Final cost of Investors Group Field expected to be $384M
    Only $11.5M worth of loans repaid since stadium built; interest charges mounting

    By Bartley Kives, Jacques Marcoux, CBC News Posted: Jun 20, 2016 4:30 AM CT Last Updated: Jun 20, 2016 6:05 AM CT

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    The final cost of building and financing Investors Group Field will be $384 million, including interest, by the time the building is paid off completely in 2058. (Gary Solilak/CBC)

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    The total cost of Investors Group Field continues to rise, as payments on construction loans lag behind mounting interest.

    Barring any surprises, the total cost of building the 33,500-seat football stadium at the University of Manitoba will be $384 million when the last principal and interest payments are made in 2058, according to a CBC News analysis.

    To date, the total cost of building and financing the stadium in accounting terms is $250 million, based on stadium construction and completion costs of $209 million, $8.7 million spent to date to repair deficiencies and $32 million worth of interest accrued so far.

    One year ago, the running tab for the building stood at $235 million. The $15-million increase over 2015 is due to additional interest as well as the cost of the repairs.

    Meanwhile, only $11.5 million has been applied against $172 million worth of stadium-building loans that will eventually cost taxpayers and the Winnipeg Football Club more than double that amount.

    This accounting is based on financial statements posted by the University of Manitoba on Friday, supplemented by information from Triple B Stadium, the shell company that owns and manages the stadium on behalf of the Winnipeg Football Club, the City of Winnipeg, the province of Manitoba and the U of M.

    The final figure
    Over the next 42 years, additional interest is expected to take the total cost of building the stadium up to $384 million, provided all the assumptions in the football stadium's business plan are met between now and 2058.

    This final figure does not include the cost of additional repairs conducted by Triple B Stadium, which has provincial approval to spend another $26 million to correct construction or design deficiencies that include cracked concrete on the concourses and drainage issues.

    The large gulf between the capital cost of building the stadium and the final tab, including interest, is due to the complex nature of the financing plan for the facility, which opened in 2013 and serves both the Canadian Football League's Winnipeg Blue Bombers and the U of M Bisons.

    That plan calls for the city, province and Winnipeg Football Club to spend $167 million on interest charges on a $160-million stadium-building loan over the 45-year life of the building. This interest is over and above $209 million spent on construction and the $8.7 million spent to date to repair deficiencies.

    The interest charges on the stadium-building loan will remain under $167 million as long as the Winnipeg Blue Bombers continue meeting their annual stadium-payment obligations — and the former Canad Inns Stadium site at Polo Park starts generating the property-tax revenue envisioned by its business plan.

    The Bombers are responsible for paying back $85 million of the $160-million loan, plus $90 million worth of interest, for a total of $175.1 million by 2058. Under the terms of a stadium management agreement, the Bombers are slated to make additional payments to Triple B of $4.5 million this year and next, $3.5-million in 2018 and payments of no more than $4.4 million every year until 2058, when the loan is supposed to be paid off.

    So far, the football club fulfilled its obligations to transfer $4.5 million a year to Triple B Stadium in both 2014 and 2015. However, only $2 million of this $9 million was applied against the provincial stadium-building loan; the remaining $7 million was used to pay down a separate, $10-million CIBC loan taken out by Triple B Stadium to complete the facility. This CIBC loan remains on the books.

    Right now, all the interest on the Bombers' portion of the loan is being applied to a separate portion that the city and province are paying off, using property taxes from the former Canad Inns Stadium site. The city and province are responsible for paying $75 million worth of principal plus $76 million worth of interest, for a total of $151 million worth of stadium payments by 2038.

    1999 bail out
    [​IMG]
    The former Target store in Polo Park. The land below it generates property-tax revenue used to help pay off the cost of Investors Group Field. (Meaghan Ketcheson/CBC)

    When the Bombers played at Canad Inns Stadium, the Polo Park-area property was exempt from paying property taxes. This was one result of a 1999 deal to bail out the non-profit football club, which was struggling financially at the time.

    Since the Bombers moved from Polo Park to Fort Garry, the Canad Inns Stadium was sold to a partnership between Shindico Realty and Cadillac Fairview, which also own Polo Park shopping centre.

    So far, the former stadium site remains largely undeveloped. It houses an empty Target store and has yet to generate the revenue expected by the stadium-financing deal brokered by the former NDP government.

    In 2014, the former stadium site generated $666,000 worth of city and provincial property taxes, all of which were applied against the stadium-building loan. The revenue from this site rose to $1.3 million in 2015 but is expected to decline to $1 million this year, according to a statement from the city's assessment and taxation department.

    Calls for stadium audit
    Earlier this year, the former NDP government blamed this lower-than-expected revenue on weak retail-market conditions, while the Progressive Conservative opposition called for an audit of the stadium project.

    The Pallister government has yet to announce an audit of the stadium, which remains the subject of litigation between Triple B Stadium, primary contractor Stuart Olson Construction and architect Ray Wan.

    The Winnipeg Football Club itself, meanwhile, enjoyed a strong financial year in 2015. The club reported a $7.1 million profit, primarily because of the 2015 Grey Cup, which was held at Investors Group Field.


    The Bombers used $1.5 million of its 2015 profits to pay off a $1.5-million loan to Triple B Stadium, for improvements that were made ahead of the Grey Cup. The club said it would use the remaining $5.6 million for long-range financing.

    [​IMG]
    Edmonton Eskimos quarterback Mike Reilly is hit as he looks for a receiver downfield against the Ottawa Redblacks during the 103rd Grey Cup at Investors Group Field. The game helped the Winnipeg Football Club pay off the smallest of its stadium-building loans.











    Breaking down the numbers
    $384.1 million

    Total expected cost of building Investors Group Field, including initial construction costs, additional construction costs and interest charges on loans.



    $175.1 million

    Principal and interest on an $85-million construction loan the province gave to the Winnipeg Football Club. This must be paid in full by 2058. The Winnipeg Blue Bombers have applied $1 million a year against this loan to date and are scheduled to apply no more than $4.4 million each year against this loan until Triple B Stadium, the shell company that owns Investors Group Field, pays off a smaller loan.



    $150.6 million

    Principal and interest on a separate, $75-million provincial construction loan that must be paid in full by 2038. Both the City of Winnipeg and the province of Manitoba are paying back this loan, using cash from property taxes generated by the former Canad Inns Stadium site, which was sold to a partnership between Shindico Realty and Cadillac Fairview. This land did not generate any property taxes for either level of government when the Winnipeg Blue Bombers played out of Canad Inns Stadium, thanks to an exemption offered to the non-profit Winnipeg Football Club.



    $10.9 million

    Principal and interest on a $10-million CIBC loan to Triple B Stadium. The Winnipeg Football Club are responsible for this loan off, applying $3.5 million a year against this loan until it is paid off.



    $22.5 million

    Cash grant from the province toward the stadium construction.

    $8.7 million

    Draw so far on a CIBC loan, taken out by Triple B Stadium and guaranteed by the province, which is being used to pay for construction deficiencies. The province has guaranteed up to $35.3 million on this loan, which functions like a line of credit. Lawsuits between Triple B Stadium, Stuart Olson Construction and architect Ray Wan may determine who winds up covering the tab.



    $7.5 million

    Cash grant from the city the toward the stadium construction.

    $7 million

    Additional provincial cash contributions to the stadium, billed as cash used for Grey Cup and energy enhancements.

    $1.5 million

    Principal and interest on a loan offered by the province to Triple B Stadium. This loan, which had a principal amount of $1.425 million, has been paid back.

    $350,000

    Press-box repairs, financed by a company controlled by Winnipeg's Asper family.









    Sources: University of Manitoba, City of Winnipeg and Triple B Stadium chair Andrew Konowalchuk
     
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  2. Jayman

    Jayman Member

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    Bartley Kives has been following this story since it started. Nice summary. Just the facts, m'am.

    Let's look at two items and then consider reality.

    The Club borrowed 1.5 million to fund hosting the Grey Can. The Can grossed 7.1, had a loan to pay off of 1.5.
    Pretty straight forward, they made 5.6, less the juice. Nope.
    The Bombers announce they "made" 7.1 and have used 1.5 to meet their loan obligations on the building. Huh?
    I'm not sure if they are dumb or devious. You borrow 1.5 to earn 7.1, you made 5.6. Period. Full stop.
    The cute spin is noteworthy. Nothing is as it appears. Also to remember, this 5.6 comes along every ten years, or so. The Club has all believing we've been saved by the Grey Can. Nope, a tragedy has been differed.

    The next big lie to be exposed will be the 35 mil. loan to clean up "construction deficiencies". We are assured this loan will be paid off when The Courts award against the GC and/or The Architect, or not. Ok, but what if both of those well represented parties convince M'Lord that The Club spec'd, scoped, inspected, approved, paid for AND signed off on the design and the build? Or, the claim is only partly settled, or someone's company pulls the pin? Oops.

    I love the product on the field, even when they are wining, but the management? Blue smoke and mirrors.

    The new Blue Provincial Government promised an audit. Can't wait. This dog don't hunt.

    Oh, and the press box loan? When the building design was approved (by The Club) for construction, someone forgot that a CFL press box needs to be enclosed. Asper got the work done and contra'd his box rental. Wow.

    And the cost of cutting those stairs down to field level? When the building design for this new multi-purpose facility was approved (by the Club) someone forgot that Paul McCartney etc. fans will need to actually get down to their field seats.

    You make those mistakes working for True North, or any other competent event manager, you'd be lucky to be selling popcorn. This Bored just re-elects a few more friends.
     
    #2 Jayman, Jun 20, 2016
    Last edited: Jun 20, 2016
  3. Bronko

    Bronko Member

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    Truly,
    Malice in Blunderland . . . .
    Saved by the bell - and the fact most of the living dead (aka zombies) living in Prairie Town are inveterate idiots and really don't care about cost smoke 'n mirrors. But give them a speeding ticket for 3 bills or raise the curb rate on their property and they spring into hardcore action.
    70% of the blame on this financial miscarriage placed at the feet of former Premier and Chief Ogre Greg Selinger - 25% on Dizzy David Asper who intimidated and forced La Grand Ogre (Selinger) into coughing up the ante. Final 5% on weak-minded architect and construction companies who didn't know if they were foot or horseback - so long as they were gettin' paid - and get paid they did....
    History will record a black hole was built on the grounds of the Univ. of Manitoba in the early part of the 21st century.. . . . . costs approaching 1/2 a billion, little to no oversight, wonder the f'n thing still standing.

    In retrospect shoulda built a slightly larger Tim Hortons (Hamilton) field - 28,000 to 30,000 max with a couple concrete slabs, the perfunctory jock-sniffer boxes, same number of concessions and bars. Total cost would have come in at $125 to $175 million = all in. . . . . of course the over-arching problem is that nobody would have put a dime of private money into the thing - which of course explains the essential disaster.
     
  4. Jayman

    Jayman Member

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    Bronks, they should have built exactly the seating they did, then deleted the quasi roof structure.
    They would have finished in one construction season and not lost that ugly year two eat crow debacle.
    They could add the roof (or whatever it is) when they had the coin.
    The cash saved would have kept the pay-out reasonable and saved a lot of face.
    Nah nah nah nah nah nah, my overhang is bigger than your overhang!!
    Asper set them up with expectations (remember the indoor soccer winter dome component, quietly evaporated once true costs started appearing), and the Politicians who took over didn't have the nads to say "no".

    On a brighter note, I can't wait to see what our new starting timekeeper can do with a couple of three minute warnings in our home opener. "Bombers are second and goal with just 2 seconds on the clock", the new Bomber motto!!
    I hear Sask tried to pick him off our PR!! Ka ka, WAD's got pictures on him the night they………oh never mind.
     
  5. deuvl

    deuvl Moderator
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    2058........just in time to celebrate Bud Grant's first grey cup centennial. aliens will have likely taken over the front office by then after brainwashing all the Manitobans into paying for losing football every year........oh wait.......
     

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