Since the Bomber stadium deal was inked some have called Mr. Asper's project a “sweetheart deal.” Concerns have rightly been raised about the lack of private sector risk in the project. However, complaints should be directed to our politicians who signed the deal on our behalf.
To begin, not once did our elected officials ask taxpayers what they thought about paying for and building a new stadium. With a bit of foresight our politicians could have held a referendum on the amount of public funding for a stadium during any of the 2003, 2004, 2006, 2007 or 2008 provincial or federal elections. As a 2004 engineering report noted that $8.9 million worth of repairs could have extended the current stadium’s life by “10-20 years,” this also could have been one of the ballot choices.
Instead of first determining a level of public support and saying to the private sector right at the beginning - 'government will put in no more than this much money, these are our conditions, let's see your proposals,' our elected officials sat back and let the Bombers hold their own competition.
Once the Bombers selected Mr. Asper’s proposal, our political leaders then added entirely new criteria to the mix. This forced Mr. Asper to significantly change his project multiple times – both financially and geographically. Often when significant changes are made to the criteria in a competitive process, and to the winning bid itself, projects are re-tendered. This ensures fairness to all bidders and guarantees taxpayers get the best bang for their buck. Obviously that didn’t happen.
That brings us to the finances for the $115 million stadium itself – a $90 million provincial “loan” for the project, a $15 million provincial grant and $10 million in “development fees” by Mr. Asper's Creswin Properties. As the $10 million in “development fees” is likely what Mr. Asper's company will pay themselves to manage the project, virtually all the risk for the project is born by the public sector.
Further, the $90 million provincial “loan” is anything but a loan. By 2016, if Mr. Asper doesn't want to, or cannot afford to pay back the $90 million in provincial financing, he doesn’t have to; the government will use tax dollars to repay the debt.
Now consider this, Mr. Asper will have the right to be the sole buyer in the current stadium's valuable land. He won't have to bid against anyone for it. The idea behind the sweetheart option is that he'll develop the land and then use the proceeds to repay the $90 million “loan.”
If he pays off the $90 million, about 87 per cent of the cost of the stadium will be paid for by the private sector. Even with the shoddy process, that's a pretty good deal. Unfortunately, that’s a big “if.”
If the $90 million isn’t repaid, the project is 91 per cent financed by taxpayers – a debacle considering the lack of public input and the poor process.
One thing that is clear, our politicians ran an extremely shoddy dog and pony show. Hopefully it won’t be repeated.
Colin Craig
Prairie Director
