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November 05, 2010
Winnipeg stadium over budget, out of cash
The $115 million plan for a new Winnipeg Blue Bombers football stadium — already saddled with a controversial public "loan" to developer David Asper that could turn out to be more of a grant — has new problems. Namely, that that $115 million price tag has turned into $160 million, and nobody has a clue where the extra money will come from:
Sources say the price is more than $160 million and the stakeholders are now huddling to determine what comes next. The project will require extra money or the design could be altered to make the stadium fit the $115-million budget used to put together the existing funding package. There is concern the project is in danger of being scrapped altogether.
Asper agreed to pay for all cost overruns, but now says overruns should be calculated only after the "final price" is determined. (This is reminiscent of the time the Seattle Mariners owners insisted that they didn't have to pay for cost overruns on Safeco Field because they were not overruns, but rather "unanticipated capital expenditures"; the team lost in court.) If the final cost estimate — which, mind you, is being made by Asper's own development firm, Creswin Properties — comes in at more than $115 million, Asper tells the Winnipeg Free Press, "choices will have to be made."
Winnipeg Mayor Sam Katz says he and Manitoba Premier Greg Selinger will make a decision on how to proceed in the next four or five days. This could get very ugly very fast.
Asper is still a wealthy man, Neil, but his family owned businesses have (in several cases) crumbled under the debt load the 'boys' placed on it.
He no longer has anything like the income he did at the time this deal was 'agreed'. Unless somebody else agrees to pay for it (well, more than they already have done, of course) I don't think it gets built, frankly. I'm ok with that.
The Bombers do need a new facility, but I don't like the deal that Asper got, and I don't think he's the right guy to run the club (he had a very public blowout with then head coach while on the sidelines at a game a few years ago. Not the behaviour you want in a director, frankly). Let's hope one of the others interested in taking over the club a few years ago steps forward. It's more likely to get done in a reasonable way if the Asper family is not involved, IMO.
So for an NFL team to compete and keep up with the Jones's they need stadiums that will cost $750M+. Granted, those include many more suites and just less than twice the number of seats that this stadium plan includes. But still a lot of money in these times.
Yet this one can be done for 160M and will be about 60% the capacity most NFL stadiums would be built to hold nowadays.
And the MTS Centre was built for about $125M and could be ready for an NHL team right now - Bettman willing - needing some additional work for between 50-100M or so to get it up to snuff with other teams' buildings yet the Oilers need something in the range of 450M to remain competitive with the rest of the league.
Maybe I'm missing something - obviously different markets will have different prices on land and labor so that will affect the price tags somewhat - but it seems strange that these projects can differ so much from one place to another.
Shouldn't the average NFL stadium cost about 250-300M? Shouldn't a reasonable building in Edmonton cost between 175-250M? And anything extra these teams require (maybe 800 LCD TVs like Pittsburgh Penguins arena?) maybe should be coming out of the teams wallet and not the tax payers.
Why aren't these wild fluctuating prices be red flags for civic governments?