This is an archived version of a Field of Schemes article. Comments on this page are closed. To find the current version of the article with updated comments, click here.
April 02, 2010
Winnipeg stadium deal: Return of the "groan"?
Manitoba announced a new deal for a stadium for the Winnipeg Blue Bombers CFL franchise on Wednesday, which stands out from the old one announced last year in that it's much, much more confusing. Under the old plan, the province was going to kick in $15 million toward a $115 million stadium; under the new one, it will add a $90 million loan to be paid back by developer David Asper, who will be on the hook for only $10 million in up-front costs.
Now, here's where it gets complicated: The Blue Bombers are owned by the province, and Asper will get control of the team (and the stadium) if he repays the loan in full. If he can't repay it, though — which depends on his success in tearing down the team's old stadium and building an upscale mall in its place — then the province keeps the team, and diverts the mall's property taxes out of the general fund to pay off the stadium costs (yes, still another TIF).
As some Manitoba officials point out, this could be a heads-I-win-tails-you-lose situation for Asper, who is effectively taking no risk: Either he ends up with a successful mall and a free football franchise, or a less successful mall, no team, and next to no stadium debt. The Globe and Mail reports:
"The province is crossing its fingers and hoping it will be repaid," said Conservative Opposition Leader Hugh McFadyen. "There's no obligation to repay, which means it's not a loan; it's a $90-million grant."
Or as Pennsylvania state representative Thomas Petrone famously said of one of the original TIF deals, for new stadiums for Philadelphia and Pittsburgh's NFL and MLB teams: "It's not a grant. It's not a loan. It's a groan."
Agreed, Neil.
Asper has once again helped himself to the public trough... As I understand it, Asper will not own the stadium (perhaps I'm just reading it incorrectly, but your article seems to imply that he will own it, when I believe the University will). But his only risk here is losing control of something he doesn't own presently. And depending on whom you believe, he gets between $15-50M worth of commercial land on Maroons road for about $10M...
I can summarize my view thus: If the government was going to pay for a new stadium anyway, why not just do so and sell the commercial land when the stadium is finished? Asper no longer has a 'crucial' role in the development, he essentially gets commercial land (and possibly a $10-12M football team) for less down than the land itself is worth.
I wish we could all do business like that...
And I think this is a deal that will likely end up falling apart in a horrific fashion. The economy just isn't exactly humming along right now. Just do a search for store closings or layoffs and you will see what I mean. At least the Minnesota Twins built their ballpark in a area that will be used year-round since Target Field and the Target Center are right next to each other. Otherwise, I suspect you should build a mall around the stadium. That might be a idea for the Jets.
Posted by Jessy S. on April 3, 2010 10:43 PM