City's role in stadium deal questioned

A former policy adviser to Winnipeg Mayor Sam Katz is questioning the city's role in a deal that would see prime retail land at Polo Park sold for much less than it could be worth down the road.

Brian Kelcey says in a self-authored report that more scrutiny of plans by David Asper's Creswin Properties' plans to purchase the current site of Canad Inns Stadium for about $30 million is needed.

The proposal is part of a business agreement between the city, the province, Creswin and the University of Manitoba that will see construction on a new stadium for the Winnipeg Blue Bombers begin next month.

Kelcey says after the land at Polo Park is developed by Creswin for retail use, its assessed value could climb to $241 million, a figure that the city' property assessment department confirmed to CBC News.

'It's a spectacular deal for Creswin.' Brian Kelcey, former policy adviser to Mayor Sam Katz

In fact, the city said its future assessed value could be worth as much as $244 million.

He admits that Creswin would likely have to spend between $113 million and $122.5 million on developing the site for the assessed value to climb as high as this.

However, Kelcey said the city may be better off allowing the free market decide what the land is ultimately worth by seeking bids on it from alternate buyers.

"At first glance this is not just a good deal," Kelcey said. "It's a spectacular deal for Creswin."

In 2007, Asper signed a memorandum of understanding with the city to take control of the land as part of a deal for a new stadium for the Winnipeg Blue Bombers.

Under the terms of that MOU, he currently retains exclusive rights to it and has stated plans to demolish the crumbling current stadium and construct a ritzy, 650,000-square-foot retail complex called The Elms.

Originally, Asper said he planned to use revenue from The Elms to finance the purchase the CFL team and build a new stadium.

But that plan was largely scuttled last month when delays prompted the provincial government to announce it would contribute $90-million in bridge financing to fast-track construction of a $137.5-million stadium development on the U of M campus.

Asper has the option of paying back $75 million of the financing by March 2016, which would allow him to own the team. The stadium, although managed by Creswin, would forever remain a publicly-owned facility.

Should Asper not pursue his option to buy the team, the city and province have said it would use the taxes generated by the development to pay back the bridge financing.

Currently, the land generates no tax dollars.

On Wednesday, city councillors have what will likely be their final say on the city's role in the deal. They are voting on whether to declare the Polo Park land surplus and therefore allow it to be sold to Asper.

'It's also unclear why the city would agree to an exclusive option on its property in advance of any agreement on the option's value.' Brian Kelcey

If they do, the city admits the process of selling the land will no longer be scrutinized in the public domain because it will be conducted as a private business transaction.

But Kelcey said in his report that councillors are not being given enough information to base their decisions on. According to Kelcey, they have only been given a report from the city's Executive Policy Committee recommending the sale to Creswin without disclosing the current assessed value of the Polo Park property.

The "Report does not specify the expected benefits for Creswin, as though these are not relevant to the deal proposed," Kelcey writes.

The report also doesn't spell out how the city will determine what the fair market value is for the land, Kelcey stated.

"It's also unclear why the city would agree to an exclusive option on its property in advance of any agreement on the option's value.

"Given the value of the sums at stake, councillors have the right to know and to openly compare estimates of the value of the [Polo Park land] against Creswin's own contributions to the project," Kelcey wrote.

He proposes four alternatives be considered prior to council considering the deal, including developing a joint agreement between the city and Creswin that sets out what the fair market value of the land is.