'No realistic prospect' for province to get back part of Investors Group Field loan
Former NDP government had planned to get back $85M plus interest through taxes at old Winnipeg Stadium
The University of Manitoba has officially acknowledged there's little chance it will ever see roughly $118 million it's owed from a loan to build Investors Group Field, and the province is responsible for the shortfall.
The school had acted as a middle-man for a loan of $160 million from the province, which it then handed over to Triple B Stadium Inc., to go toward the stadium's construction under the former NDP government.
The repayment plan devised at the time split that loan into two portions: Phase 1 and Phase 2. Phase 2, worth $75 million, was to be repaid by the Winnipeg Football Club, which has been making its regular payments on schedule.
The other chunk, Phase 1, was for $85 million, and was to be paid back through property taxes on the site of the old Winnipeg Stadium near Polo Park mall. The money would have flowed to the university and then back to the province.
But that repayment plan assumed the old site would be fully developed by the end 2019, something it's not on track to do.
Instead, the old Target building sits empty next to a "field of weeds," the province said in a backgrounder emailed on Wednesday. With interest, the balance for the loan now stands at $118 million.
In its 2018 financial report, released in June, the university says it's concluded there will be "insufficient amounts available to repay" the loan on schedule, and the province agrees.
"Even if there is some revenue once the land is developed, the province will have already been paying interest on these debts for years," Finance Minister Cameron Friesen said in a written statement.
"At this time there is no realistic prospect for Manitobans to be reimbursed for the amount the NDP promised they would receive in return for the loans."
'Deliberate plan' to understate costs
Friesen called the loan repayment structure "overly complex and confusing," and accused the previous government of setting it up to mask expenses from the stadium project.
"It was a deliberate plan to understate the actual financial obligation of the province to the project," he said in the statement. "As a result, over $100 million of costs to date have been written off by the province."
The NDP declined to comment.
Lynn Zapshala-Kelln, vice president of administration for the U of M, said in an emailed statement that the university isn't responsible for any funding shortfall and student programs aren't affected.
The school has made two allowances — one to the revenue and one to the expense — in the amount of the loan plus interest that offset each other and have no impact on the school's bottom line.