IGF Stadium Money Pit Grows: Broadbeck

[Noeller]

http://www.winnipegsun.com/2015/01/05/stadium-money-pit-grows?utm_source=dlvr.it&utm_medium=twitter

 

by Tom Broadbeck

Winnipeg Sun

Jan 5, 2015

 

 

While the Winnipeg Blue Bombers made good last week on its $4.5-million loan payment to help repay the costs of Investors Group Field, the total amount owed to taxpayers to build the stadium is expected to jump to a staggering $185 million this year, up from the original loan of $160 million. That’s because the miniscule loan payments made to date have fallen well short of covering the soaring interest charges on the loan, which totalled $17 million as of March 31, 2014, and are expected to top $25 million this year.

 

Two years from now, the total amount owing could be close to $200 million, an amount that may never be repaid in full. As my Winnipeg Sun colleague Kirk Penton reported last week, of the $4.5 million paid by the Bombers, only $1 million of that goes towards the taxpayer loan. The rest is applied to a $10-million CIBC bank loan the Bombers took out on top of the taxpayer loan for last-minute enhancements to the facility.

 

Also, the city of Winnipeg has still not made a payment on its IGF loan obligation from taxes generated at the former stadium site at Polo Park. All new city taxes from the site, including the new Target retail outlet, are earmarked to help pay off the new stadium under the city’s Tax Increment Financing Zone agreement. The Winnipeg Sun has learned the city will make a small loan payment of $222,779 this month under the TIF agreement. Annual payments, the amount of which remains unknown, will begin about a year from now, the city says.

In the meantime, only $1.2 million has been repaid to taxpayers so far. And with interest charges, calculated at 4.65% annually, now hovering at about $8 million a year, the total amount owing — principal and interest — is expected to be about $185 million by March 31, 2015.

No one appears to know when the Bombers and the Polo Park development together will be able to cover even the interest charges on the loan, much less pay down the principal. Until then, the total amount owing to taxpayers will continue to grow.

Of course, once the Bombers pay off the $10-million bank loan — expected in 2017 — the club should be able to make good on its full annual payments of about $4 million a year to taxpayers, largely from facility fees and amusement taxes charged on event tickets.

And once the Polo Park site is fully developed, there will be additional tax dollars from the TIF agreement, although that amount is still unknown. It will depend on the assessed value of the properties and businesses that are developed there.

In the meantime, every year that goes by where substantial payments on the taxpayer loan are not made and significant interest charges accrue, the balance owing will continue to grow.

 

The taxpayer loan — which began to flow in the 2011-12 fiscal year — is actually broken down into two loans. Phase 1 of the loan is the city’s $75-million Polo Park TIF loan, which is due in 2038. Phase 2 of the loan is the Bombers’ $85-million loan, due in 2058.

The Bombers don’t have to pay interest on their portion of the loan until 2017, which is another hidden taxpayer subsidy. Instead, the interest accruing on their loan is tacked on to the Polo Park TIF loan. So city property taxpayers will be repaying provincial taxpayers.

 

Nice shell game.

 

It has been argued new tax revenue from the Polo Park site is essentially “free” money because the old stadium generated no tax revenue at all. Actually, most of it is not net, new tax dollars. New commercial developments create costs for the city, including public works, police, fire/paramedic, administrative, etc. That’s why commercial and residential properties pay taxes — to cover their share of city expenses. So while “new” tax dollars from Polo Park go towards paying the stadium loan, taxpayers are left paying for the new ongoing costs associated with the Polo Park development.

 

It’s one more reason why our property taxes will go up again this year.

[Rich]

Gotta love Broadbeck.

Let's cut all the subsidies to the arts as well because they don't pay that money back.

Yes the stadium is going to cost tax payers. In this day and age most venues like the stadium have a component of public funding. It enhances the city and the life of people living there.

At least they are paying some back.

[gbill2004]

Didn't Mr Tough on Crime Broadbeck get a DUI a couple years ago? The guy is trash...he makes Friesen look like a model journalist.

[Mr. Perfect]

Didn't Mr Tough on Crime Broadbeck get a DUI a couple years ago? The guy is trash...he makes Friesen look like a model journalist.

He did indeed. Mr tough on crime of course made a plea deal for a lesser sentence. Funny how that works.

[RagingIce]

I thought the Bombers only owed $85 million of the total? Meaning the interest calculations should only be on the $85M

 

Also, why is Broadbeck talking about interest as if it's an additional cost to the taxpayer. It's the province charging the Bombers/PoloPark development money in exchange for the loan - it's not like the Province would have spent that interest money considering the stadium money would have been spent elsewhere and not invested.

 

EDIT: they do. Broadbeck being his usual self I see.

[Captain Blue]

The Sun has several uses. Reading it for actual analysis is not one of them.

All the uses involve fecal clean up.

Penton usually has good info so his twitter is valuable. I can't remember I actually visited their website or read a paper copy. It's useless.

[DR. CFL]

Personal feelings aside it would be nice if someone came clean on the finances. There was a CIBC loan of 10 million to pay for necessary upgrades. If it is 85 million plus the 10 million the carrying charges on interest alone is going to be significant.

[mbrg]

The Winnipeg Sun has learned

 

And right there the story loses all credibility.

 

[mbrg]

Personal feelings aside

 

Sure, sure, I can do that...

 

came clean on the finances.

 

uhhhhhh....

 

 

 

Let's just file this under a-swing-and-a-miss.

[Fan Boy]

Personal feelings aside it would be nice if someone came clean on the finances. There was a CIBC loan of 10 million to pay for necessary upgrades. If it is 85 million plus the 10 million the carrying charges on interest alone is going to be significant.

Personal feelings aside at least the stadium debt  has a chance to paid. One can not say the same for the Pity Party Museum  (so called by my wife who lived in a civil war and know human rights abuses from personal experience and was close to summary execution at least once), That thing is going to cost 20 million a year and cost way more than stadium to build. How many times are you going to visit? Once to see the amazing architecture! Your kids or grandkids will be forced to visit but how many will go 10 times in a year and enjoy themselves thoroughly (at least some times).  That is one bad investment for the taxpayer. The stadium is a long term investment with real payback potential.

[Logan007]

 

Personal feelings aside it would be nice if someone came clean on the finances. There was a CIBC loan of 10 million to pay for necessary upgrades. If it is 85 million plus the 10 million the carrying charges on interest alone is going to be significant.

Personal feelings aside at least the stadium debt  has a chance to paid. One can not say the same for the Pity Party Museum  (so called by my wife who lived in a civil war and know human rights abuses from personal experience and was close to summary execution at least once), That thing is going to cost 20 million a year and cost way more than stadium to build. How many times are you going to visit? Once to see the amazing architecture! Your kids or grandkids will be forced to visit but how many will go 10 times in a year and enjoy themselves thoroughly (at least some times).  That is one bad investment for the taxpayer. The stadium is a long term investment with real payback potential.

 

Totally agree on this.  Sure it's pretty to look at, but really?  If I'm going to a museum, I want to see dinosaur's and the native culture of that area.  If they want to add human rights, add it to a museum already created, don't make a whole museum just for that.

[DR. CFL]

I don't care if it's the Museum, IGF or your mortgage. At some point there needs to be accountability, transparancey and responsibility.

[TBURGESS]

Interest is a taxpayer cost.  The Bombers aren't paying any to the Govt. until the $10 Mil CIBC loan is paid.  The $1.2 Mil the Bombers have paid goes directly to the principle, if I read things right.  Interest is charged on the entire loan, not just the Bombers part of it.  

 

4.65% on a mortgage loan is too high.  4% is more likely.

 

With $4.5 Mil yearly payments, the interest on the total loan won't be covered, let alone paying down any principle.

[wookie]

sports teams just keep getting cash, ie  6 mil a year we give the jets, just because they are the jets. 

[Rich]

If reporters (not that Sinclair is really a reporter) did their job and actually presented facts, then there wouldn’t be people demanding accountability and transparency.   It isn’t like this is some huge shell game (well, no more so than most government deals) where people are trying to hide and blurry facts.  It isn’t even that hard to do a little research to figure out what is owed on the stadium.

 

Apparently though, anything more than having a single click to tell you everything you want to know is too difficult (actually I take that back, here is a single click that tells you what you want to know, just have to go to google and search for it….).  Thanks to Wicek for this article.

 

And as to not paying down the interest ... the original mortgage agreement as detailed below to payback 85 million is 4.5 Million over 44 years which comes out to 198 million total they will be paying back over the term of the mortgage.  This probably gets increased by a number of years due to them paying very little in the first couple of years due to the additional 10M loan, but clearly this agreement means they are paying back more then just the interest. Not going to do the math, but I'm guessing this means they got a sweet deal on the interest from the province.

 

http://www.winnipegfreepress.com/sports/football/bombers/stadium-a-sweet-deal-253686801.html

 

 

Who's paying: The city has provided a $7.5 million grant towards stadium construction and will devote municipal property tax revenue from the redevelopment of the old Polo Park stadium site towards the repayment of another $75 million of the stadium building loan. On the plus-side of the ledger, the city recouped $30.25 million fron the sale of the old stadium site to private developers.

 

The province has contributed a $22.5 million grant towards stadium construction, a further $3 million towards winterizing the building for intense cold (announced last week) and -- like the city is doing with property taxes -- will also devote education taxes from the redevelopment of the old Polo Park site towards the repayment of $75 million of the stadium loan. The province also loaned the Bombers $85 million towards the team's share of construction costs.

 

The Bombers are on the hook for repaying the province that $85 million with interest over 44 years and also owe the bank a further $10 million for a loan the stadium builder consortium, BBB Stadium Inc., took out to add some extra amenities to the stadium, like a "ribbon board" for advertising. The Bombers are also on the hook for another $350,000 or so to enclose the outdoor press box -- a condition the team had to meet before the CFL would award them the 2015 Grey Cup. The Bombers retained the naming rights to the stadium and sold them to Investors Group for an undisclosed sum.

 

There is also a final $3.5 million worth of additional work that had to be done to the stadium as construction concluded -- which included things like some fixes to some hand rails and the addition of a fire suppression system in a crawl space. CEO Wade Miller said this week that the BBB consortium will be responsible for those costs.

 

And then for some comparables from the same article….

 

 

But what isn't really up for debate is whether we Manitobans got a good deal in Investors Group Field, even at $207 million. Because if you look at the comparables -- and the two best ones would have to be new CFL stadiums going up in Hamilton and Regina -- there isn't much question we got great value for money in IGF. Yes, even at the newest higher price.

 

The fine people of Saskatchewan, for instance, are going to spend at least $278 million building a new stadium in Regina that, like Winnipeg's, will also be open-air, bowl-shaped and with a partial roof, but seat 500 fewer spectators -- 33,000, instead of 33,500.

 

And $278 million is just the projected cost. How much do you want to bet Regina's final bill, like Winnipeg's, will be higher once the place actually opens in 2017?

 

And then there's Hamilton's new stadium, which is costing $145.7 million but will seat just 24,000, feature no roof and consist of not much more than two grandstands facing a playing surface.

 

Then people still want to complain about how much tax dollars went into IGF and that the Bombers aren’t really paying anything back, let’s look at some more comparables on that front.

 

 

Calm down and consider: the Roughriders' share of their stadium's $278-million cost is just $25 million. And the Hamilton Tiger-Cats are on the hook for 20 years of annual payments at $1.2 million per year -- or $24 million spread out over 20 years.

 

And the Bombers? Well, they've got to pay back a total of $95 million -- $85 million to the province and $10 million to the bank -- over the coming decades. With interest.

[The Unknown Poster]

I like the Sun but this is a terrible story.

 

I thought the loan was interest free in the first place.  But I guess not.

 

Also, who cares?  This isnt a matter of costs being hidden.  We know what it costs.  yes it's a lot.  So who cares?  If IGF had not been built and CIS was condemned, forcing the government to pay tens of millions to repair it, the story would be why we wasted $50 million on a condemned facility instead of spending $200 million on a facility that would serve manitobans for generations.

 

Its just bating people to angrily pay to read a stupid article.

 

Same with the nonsense over the Jets.  So what, we give the Jets a few million a year.  Big deal. 

 

Funny how no one makes a big deal about how the tax contribution on MTSC was paid back and paid back early.  its all bad news bullshit all the time.

 

Bombers make a significant payment and its bad news.  blah blah blah, who cares. 

[Stickem]

Mr. Broadbeck reporting with his pro-con. bias. I think we can all see through this. Nice try Mr. Negativity, stadiums cost money and those are the facts. The debt may be a fact of life for awhile BUT the stadium will be with us forever. Get lost Mr. Broadbeck.

[The Unknown Poster]

Mr. Broadbeck reporting with his pro-con. bias. I think we can all see through this. Nice try Mr. Negativity, stadiums cost money and those are the facts. The debt may be a fact of life for awhile BUT the stadium will be with us forever. Get lost Mr. Broadbeck.

I have a pro-con bias too but it didnt matter who was in power.  The Jets thing wasnt an NDP issue and neither was the Stadium.  In the PC's were in power, no one was losing a chance to bring back the NHL and no one was letting the Bombers fold.

[Noeller]

Keeping in mind, folks, yet again...columnist vs reporter. Broadbeck is a Con-Slant Columnist, whose sole purpose is to elicit reaction from people. Similar to what Charles Adler does.

 

Just sayin'......

[Rich]

Keeping in mind, folks, yet again...columnist vs reporter. Broadbeck is a Con-Slant Columnist, whose sole purpose is to elicit reaction from people. Similar to what Charles Adler does.

 

Just sayin'......

 

I know what his job / purpose is.  Doesn't make me hate him any less.  From reading other stories of his where I was very knowledgeable on the topic and see how he twists facts to fit whatever narrative he wants, makes me distrust absolutely anything he writes.

 

His job is to sell papers.

 

A combination of him and Friesen make me not read the Sun.  And if you hadn't of posted the article, no way I would have known about it.  Pretty sure that isn't the reaction his employers want.

[kelownabomberfan]

what's the big deal? Just raise the PST another point. You guys are used to that now.

[Fan Boy]

 

Keeping in mind, folks, yet again...columnist vs reporter. Broadbeck is a Con-Slant Columnist, whose sole purpose is to elicit reaction from people. Similar to what Charles Adler does.

 

Just sayin'......

 

I know what his job / purpose is.  Doesn't make me hate him any less.  From reading other stories of his where I was very knowledgeable on the topic and see how he twists facts to fit whatever narrative he wants, makes me distrust absolutely anything he writes.

 

His job is to sell papers.

 

A combination of him and Friesen make me not read the Sun.  And if you hadn't of posted the article, no way I would have known about it.  Pretty sure that isn't the reaction his employers want.

 

You got that right. The truth is useful to a point but if it gets in the way of a good story well then truth has little value. Years ago the Sun ran a ridiculous front page story and when I spoke to the editor about fact checking he just told me "You caught me. We'll try to do better next time."  I contacted Free Press about what the Sun editor said and I was so completely misquoted that I ended up sounding like I agreed with the Sun story. I don't know where the truth is but it sure isn't in the news media or if it is then it was a mistake.

 

The bottom line is that the Bombers aren't getting the sweetheart deal that BC got with the new roof, or the Sask or Hamilton stadiums. Point that media finger somewhere else. 

[JuranBoldenRules]

I don't mind spending tax money on a stadium.  I do mind the lying and moving of the goalposts that has happened throughout this entire process, by the previous Bomber regimes and the Selinger NDP.  Trying to make it seem like we are getting some kind of deal and kicking the can down the road to the next election just makes everyone look like an idiot.  Come right out and say we are building a $200 million stadium and it is going to cost the taxpayer quite a bit of that total.

 

At this point I am hoping that our Grey Cup isn't a national embarrassment aside from the financial mess.  I don't have a lot of hope as a source of mine who worked on the stadium for Stuart Olson Dominion said as of his leaving the project in 2013 that there was no plan for nearly 7000 temporary seats required for the Grey Cup.  And this is not a simple thing.  There is barely enough egress or concourse space at the facility for 33,000, they had to add more egress to the field to get a temporary occupancy permit in 2013.  They have to satisfy the building code and the fire code, and they are just in the planning stages for a game that will happen this year.  

[gbill2004]

I don't mind spending tax money on a stadium. I do mind the lying and moving of the goalposts that has happened throughout this entire process, by the previous Bomber regimes and the Selinger NDP. Trying to make it seem like we are getting some kind of deal and kicking the can down the road to the next election just makes everyone look like an idiot. Come right out and say we are building a $200 million stadium and it is going to cost the taxpayer quite a bit of that total.

At this point I am hoping that our Grey Cup isn't a national embarrassment aside from the financial mess. I don't have a lot of hope as a source of mine who worked on the stadium for Stuart Olson Dominion said as of his leaving the project in 2013 that there was no plan for nearly 7000 temporary seats required for the Grey Cup. And this is not a simple thing. There is barely enough egress or concourse space at the facility for 33,000, they had to add more egress to the field to get a temporary occupancy permit in 2013. They have to satisfy the building code and the fire code, and they are just in the planning stages for a game that will happen this year.

My guess is there will be temporary concourses set up outside the stadium for Grey Cup.

What's egress?

[JuranBoldenRules]

 

I don't mind spending tax money on a stadium. I do mind the lying and moving of the goalposts that has happened throughout this entire process, by the previous Bomber regimes and the Selinger NDP. Trying to make it seem like we are getting some kind of deal and kicking the can down the road to the next election just makes everyone look like an idiot. Come right out and say we are building a $200 million stadium and it is going to cost the taxpayer quite a bit of that total.

At this point I am hoping that our Grey Cup isn't a national embarrassment aside from the financial mess. I don't have a lot of hope as a source of mine who worked on the stadium for Stuart Olson Dominion said as of his leaving the project in 2013 that there was no plan for nearly 7000 temporary seats required for the Grey Cup. And this is not a simple thing. There is barely enough egress or concourse space at the facility for 33,000, they had to add more egress to the field to get a temporary occupancy permit in 2013. They have to satisfy the building code and the fire code, and they are just in the planning stages for a game that will happen this year.

My guess is there will be temporary concourses set up outside the stadium for Grey Cup.

What's egress?

 

 

Ways out of a building.  Need enough to move people quickly in case of emergency, obviously more depending on the amount of people and size of the building.