Bombers Make Finance Payment

[Stickem]

20 hours ago, rebusrankin said:

You prefer higher taxes, increased debt and poor service?

...What I prefer is good govt. and not a bunch of b.s. being fed to us about...'oh there won't be any raising of taxes'...all the while upping every user fee in the book that amounts to the same thing...As far as increased debt goes...every province in the country has added to their debt and that under differing governments...so that's a non starter.... As well provincial services are pretty comparable to every other province in the country...So who will do better in Man.????...Anyway this is a political discussion and doesn't belong here so I'll finish up by saying....nice to see the payment on the new digs being made and we better get a few playoff games to refill the kitty...and I mean a few playoff games.

[iso_55]

On 12/30/2015 at 1:11 PM, The Unknown Poster said:

Brad Boak @boakerstar

@friesensunmedia why is you getting a hug from a jet news? Come to think of it, given most of your articles, maybe it is.

What does this tweet mean?

[Rich]

3 minutes ago, iso_55 said:

 

On December 30, 2015 at 2:11 PM, The Unknown Poster said:

Brad Boak @boakerstar

@friesensunmedia why is you getting a hug from a jet news? Come to think of it, given most of your articles, maybe it is.

What does this tweet mean?

 

Need the context of the tweet he was responding to:

Paul Friesen        ✔ @friesensunmedia

Why is it news the Blue #Bombers are making a scheduled mortgage payment? Come to think of it, given their history, maybe it is.

 

 

[The Unknown Poster]

Freep:

 

Manitoba's Progressive Conservatives say they'll re-examine the financing for Investors Group Field if they're elected this spring, with an eye to reining in ballooning interest charges on what initially was a $160-million loan.

According to University of Manitoba financial statements, the principal and interest outstanding on the primary stadium-construction loan was $186.7 million at the end of March. That figure was $8.3 million more than it was the previous fiscal year due to additional interest charges.

 

Reg Helwer

The maximum possible payments against the loan in 2015, by the city, province and Winnipeg Football Club, amounted to $5.8 million. While the Winnipeg Blue Bombers met their obligation to contribute $4.5 million, that sum was applied against a separate $10-million loan taken out by Triple B Stadium, the shell company that owns Investors Group Field.

'We'll have to see whether there's

a better way to do this'

 

-- Progressive Conservative infrastructure critic Reg Helwer

As well, the combined city and provincial contribution of $1.3 million in 2015 fell short of business-plan projections. The Selinger government blames it on Winnipeg retail market conditions, as the city-provincial contributions are equal to the property taxes generated from the former Canad Inns Stadium site, whose redevelopment is thus far limited to an empty former Target store.

Nonetheless, the prospect of the combined principal and interest on the loan growing to the point where it cannot be repaid has the opposition Tories vowing to look into the financing deal if the party forms Manitoba's next government on April 19.

"At that point, we'll have to see whether there's a better way to do this," Progressive Conservative infrastructure critic Reg Helwer (Brandon West) said in an interview.

He called the deal to finance Investors Group Field needlessly complex. It calls for the Winnipeg Football Club to first pay the principal and interest on Triple B Stadium's $10-million CIBC loan and then pay off $85 million of the $160-million stadium-building loan. The city and province are responsible for the remaining $75 million of the principal, using property taxes from the old stadium site.

The agreement also calls for the city and province to assume all the interest on the $160 million until Dec. 15, 2017, when the Bombers will then be responsible for interest on their portion of the loan.

The financing deal also included $30 million worth of grants from the city and province and $8.5 million in additional provincial spending. The running cost of the stadium to date, including construction and financing charges, is no less than $235 million.

"There were too many people involved, too many levels and that makes it difficult for the public to follow," Helwer said. "This should be easy for the public to understand."

The Tories have called for an audit into the stadium project, which is also marred by a construction lawsuit that may determine who will pay for $35 million worth of repairs underway at the stadium, which suffers from cracked concrete, improper drainage and other issues.

Premier Greg Selinger has stated the provincial auditor is free to decide what to examine.

Manitoba's Liberals, meanwhile, are opposed to a stadium audit. "This would simply spend money unnecessarily to establish what we already know," said Mike Brown, communications director for the Manitoba Liberal Party.

Brown said the stadium project serves as a lesson regarding how not to fund public works. "The stadium is an asset for the province, but the government clearly doesn't take the public purse seriously or it would have been more diligent with costing and financing of the stadium in the first place," he said.

No one within the Selinger government was available for comment. Triple B Stadium chairman Andrew Konowalchuk declined to comment.

bartley.kives@freepress.mb.ca

[DR. CFL]

It seems that the real crunch comes in 2017 when the Club then also becomes responsible for the interest on the loan. It would seem unlikely that the balance of the current CIBC loan that was 10 million will have been paid off by then either.

[The Unknown Poster]

Just now, DR. CFL said:

It seems that the real crunch comes in 2017 when the Club then also becomes responsible for the interest on the loan. It would seem unlikely that the balance of the current CIBC loan that was 10 million will have been paid off by then either.

Just roll it into provincial debt and be done with it.  Perhaps let the Bombers be responsible for the CIBC loan and future improvements/upkeep.  But as far as the construction of the stadium is concerned, province should just take it on themselves and be done with it.

[Rich]

The deal is more confusing then just paying for the interest on the loan.

When those articles start rolling all of those numbers together, they are including the interest that is accruing that the Bombers aren't responsible for, but are still attributable to the project in whole.

From this article:  http://www.winnipegfreepress.com/local/bombers-to-repay-bank-loan-first-222634991.html

Quote

Under the new loan agreement, CIBC will be paid $3.5 million for three years starting in 2014. The original loan agreement called for the Bombers to pay the province $4 million a year beginning in 2014, but under the new deal the province will now be paid $1 million each year.

So they made their payment last year, this year, and assuming they make their payment next year, the CIBC loan will be gone by the time they start making their mortgage payments on the stadium debt.

All the interest that is accruing is going to be the government's problem already.  The Bombers are on the hook for $80M of the stadium and aren't responsible for the interest that is accruing right now while they defer their payments.  That interest goes to BBB Inc / government.

As I understand that BBB Inc is responsible for managing both the Bombers debt and the government's debt (I believe they are also managing the Polo Park development to collect monies from there).  The government's debt is supposed to be paid for by the sale / development / and taxes on the old stadium site.  The lack of development in that area is hurting the mortgage payments on the other half of the loan that the Bombers aren't responsible for (this is where the interest is accruing to as well while the Bombers pay-off the CIBC loan).

So the government is already going to have to eat half the loan unless they can kick the development of the Polo Park area into over drive.  

When these articles talk about an accrued debt of ~$240M, that is accurate for the stadium project as a whole, but this doesn't at all affect the $80M that the Bombers are responsible for paying off.  The government is already going to have to eat those overages.  This is also why the PCs talk about how complex this deal is and why they would look at stream lining it.

People see this $240M in debt that keep getting thrown about in these articles and how will the club ever pay it.  But the Bombers are still only responsible for paying their $80M.  Us tax payers are already footing the rest.

The other complexity rolled into that $240M is the $35M that had to be paid to fix the structural problems with the stadium.  Right now BBB fronted that money (and that is attributing to the interest accrual).  At some point though, that money may be recovered with the lawsuit (or it may not be and the tax payers will be on the hook for that as well)

[BBRT]

With the additional cost of the work yet to be accomplished can anyone tell me what the projected total costs all in will be for the stadium regardless of who the heck pays for it. Things are getting out of hand as I hear some rumors that indicate that the total (all in costs) for the stadium will approach $400M (which can not be right can it?)

[Rich]

29 minutes ago, BBRT said:

With the additional cost of the work yet to be accomplished can anyone tell me what the projected total costs all in will be for the stadium regardless of who the heck pays for it. Things are getting out of hand as I hear some rumors that indicate that the total (all in costs) for the stadium will approach $400M (which can not be right can it?)

This was in a FP article I believe, but it is a little misleading.

This is the cost if you include all payments and interest over the 45 years of the mortgage payments.

When people say how much they paid for a house, it is usually the principle they talk about, not how much interest they will have paid by the end of it  But welcome to financing and interest.

Also that $167M in interest charges is accrued over time, so when they are still paying it off in 20, 30, and 40 years time, their mortgage payment remains constant but the $4.5M they are paying a year now won't seem so bad with inflation of their revenues over time.  

It is not $400M in present value of money.

[DR. CFL]

The concern is will the payments actually cover the accursed interest owed when the interest free period ends?

[Rich]

14 minutes ago, DR. CFL said:

The concern is will the payments actually cover the accursed interest owed when the interest free period ends?

Depends which loan you are talking about. 

BBB Inc is basically made up of the Bombers, the City, the Province, and the University.

The $4.5M per year that the Bombers have to pay will cover $85M (and the interest) of the original loan to build IGF.  That was the deal and that is what the club is on the hook for.

The extra interest because the club is only making partial payments for the first 3 years while they payoff the CIBC loan, the additional $40M loan to "fix" IGF (guaranteed by the province) and the remaining money borrowed to build IGF stays with BBB Inc.

BBB Inc is to pay for the other half of the stadium and the extra costs accrued through a combination of government funding (provincial and city), the sale and development of the old stadium location and the property and sales tax from the businesses developed on the area over the next 40 years.  They will also realize any monies recovered through the lawsuit on the stadium since they fronted the money to fix it.

The other half that BBB Inc is on the hook for isn't going so well right now.  With Target vacating their building and little to no other development in the area, additional interest accruing on that side of things because of the Bombers deferring payments due to the CIBC loan, and the addition $40M loan they had to take out.

So will the Bombers be able to meet their debt requirements?  My guess is they probably will.   Will the other half be recovered as per the original plan? Questionable at this point but it was always going to be paid for by the government anyway.