Build a stadium!, they say. It’ll pay for itself! It’ll spur economic development in the surrounding neighborhood! It never does. For every single city/county/state/province that falls for it, eventually there comes the moment when they have to admit they got bamboozled. It’s Manitoba’s turn now.
On Wednesday, Manitoba’s government wrote off the second of two loans totaling $200 million CAD (about $153M USD) that were used to construct Investors Group Field, home to the CFL’s Winnipeg Blue Bombers. Premier Brian Pallister said the consortium that owns the stadium has no realistic way to pay back the loans, so the province has just accepted that it’s got to eat the cost
“We now know that at least $200 million has had to be written off as a consequence of that project. This is an unsustainable scam,” said Pallister, referring to the financing plan.
The 33,500-seat stadium, which opened in 2013, is the subject of a complicated financing agreement. It’s owned by a group consisting of the city of Winnipeg, the province of Manitoba, the Blue Bombers, and the University of Manitoba, and it plays host to the Blue Bombers, the university’s football team, and the CJFL’s Winnipeg Rifles.
The stadium was originally estimated at a cost of $115 million CAD, but last-minute changes and cost overruns pushed that to $210 million, and required two large loans to the consortium. The stadium also needed costly repairs soon after opening. And according to the CBC, commercial development on the site of the Blue Bombers’ old stadium, which was supposed to help pay for the new building, just never materialized.
The Blue Bombers, which until this year were not charged interest on their loans, said they’ve contributed $17 million in total over the years, and intended to keep making loan payments—though those payments will be the minimum required by the financing agreement. In a statement, Blue Bombers president Wade Miller wrote:
“Based on our future forecasts, including ongoing capital improvement requirements for the stadium, we anticipate making an annual required minimum payment that is less than the maximum scheduled payment. The Winnipeg Football Club agrees with the province that the current model is unsustainable and is not viable over the long term.”
The terms of the Blue Bombers’ payments under a new deal are still being negotiated.
Premier Pallister, of Manitoba’s right-leaning PC party, accused the government that first agreed to the plan, the no-longer-in-power NDP, of knowing the loans could never be fully repaid. This was denied by an NDP finance staffer.
H/t Michael