The Black Rod

The origin of the Usher of the Black Rod goes back to early fourteenth century England . Today, with no royal duties to perform, the Usher knocks on the doors of the House of Commons with the Black Rod at the start of Parliament to summon the members. The rod is a symbol for the authority of debate in the upper house. We of The Black Rod have since 2005, adopted the symbol to knock some sense and the right questions into the heads of Legislators, pundits, and other opinion makers.

Location: Winnipeg, Manitoba, Canada

We are citizen journalists in Winnipeg. When not breaking exclusive stories, we analyze news coverage by the mainstream media and highlight bias, ignorance, incompetence, flawed logic, missed angles and, where warranted, good work. We serve as the only overall news monitors in the province of Manitoba. We do the same with politicians (who require even more monitoring.) EMAIL:

Monday, August 09, 2010

Logic lacking: Asper's Stadium and your money

There are so many things wrong with the David Asper stadium deal that its hard to decide where to start.

They started digging a hole at the University of Manitoba last week although they don't know what they're building, they don't know how much it will cost and they don't know who will pay for it.

We do know that at some point unelected Premier Greg Selinger, the dirtiest politician in Manitoba, made a decision to channel millions of dollars into the pockets of the Asper family. Why would he do that? We'll leave it to your imagination to provide the answer while we provide the facts.

Selinger hid $115 million in the provincial budget for David Asper in a section so obscure and so buried nobody could find it without a knowing guide. There was no mention in the Throne Speech about a new stadium, never mind that the province was paying for it. Why do you think they were hiding it?

To skirt the law, which requires putting government contracts to tender, Selinger is "lending" $90 million to the Winnipeg Blue Bombers to spend on a new stadium, topped up by another $15 million as the province's share of the cost. The football club will then give an untendered contract for the stadium to Creswin, the Asper-family real-estate development arm.

Creswin is not a charity.

What's the profit margin in the construction industry? 10 percent? 20 percent? The Aspers will make millions on the stadium contract regardless if David Asper lives up to his commitment to pay back $75 million of the government loan.

Right now, all that David Asper brings to the stadium deal is his empty wallet. That's what's delayed construction for two months. Asper pledged to cover cost overruns. But even before excavators scooped up their first clump of earth, the estimated cost had shot up to $139 million, or $24 million over what they're now calling their "first estimate." He wants the government to cover the extra cost and accept his IOU. But the government hasn't got the money either.

Remember, the Selinger government is running a deficit of $545 million this year. With $115 million of that going to the Asper stadium, that means that more than one-fifth (21 percent) of the money that we're borrowing this year is going to the Aspers. There is no magic pot of money Selinger can dip into to get the extra $24 million. So nobody knows where the extra money is going to come from, but they've started construction anyway.

Of course, everybody expects the government will pay the entire shot eventually.

Even Selinger expects Asper to renege on repaying the "loan". That's why he's built into the deal a sort of safety net to (bizarrely) "protect" the taxpayer. If Asper can't come up with the $75 million he's pledged, the stadium loan will be "repaid" from property and school tax money to be raised from developing the Polo Park site of the current stadium.

However, that's also against the law as it's currently written. Under the Tax Increment Financing legislation, any new taxes from newly developed land must be spent in the area the development takes place. That's the incentive to develop the undeveloped land. What you pay now will be recouped later.

Instead, Selinger intends to take money away from schoolchildrens in St. James to finance a new professional sports stadium in Fort Garry.

If development of the existing stadium site was to bring the city and school board half as much in taxes as Polo Park, it will take 25 years to pay back Selinger's stadium loan. Imagine what the school board could do with $50 or $60 million in extra funding over a generation.

So a generation of children who will get no benefit from the "loan" will be responsible for paying it back? Does that make any sense?

For some unknown reason, the board of directors of the Winnipeg Blue Bombers football team want to sell the team to David Asper and only David Asper.

Except he has no money.

So the government of Manitoba is bailing him out by building a stadium at public expense and letting him buy his way into owning the Blue Bombers by someday paying back part of the "loan" to the team.

But why David Asper? Why him and not the highest bidder? If this is the game, why not allow the person who repays the most to own the football team?

The Polo Park stadium land is to be sold to Asper---IF he can come up with the money to buy it. But why is he the only one allowed to buy the land? That was to be the deal when people thought he had money and he was going to build a new stadium. But now that the government is paying for a new stadium, where's Asper's stake in the deal? Why do we need him at all?

Let him bid on the existing stadium site and bid on the right to "repay" the government loan for the new stadium. The city will get the best price for the land, someone will develop it, and the province will still get paid back for the cost of the new stadium, even if it has to take the money away from schoolchildren.

That's New Democonomics, Selinger style.

David Asper's sister Gail is already stiffing the City of Winnipeg on property taxes owed on her pet project The Canadian Museum for Human Rights. Shouldn't that be enough warning about doing business with the Asper family circa 2010?

Last week Mayor Sam Katz was interviewed on CJOB and asked about the stadium project as well as the long lost waterpark. You know, the waterpark that David Asper was once going to build along with a new stadium in South Point Douglas.

The waterpark, for which city council voted $7 million two years ago, is still a go, said Katz. A deal with Canad Inns fell through in 2009.

"They did put out an 'expression of interest'. They have gotten a response. I think there was dome due diligence being done. As you know the first time it was done not everything was complied with so there's been some more 'meat' put into the agreement," said Katz, adding he's hoping to hear within a month whether there's a deal or not.

Go figure. On a $7 million waterpark they've been doing due diligence for two years and they still have no deal, but for a $115 million stadium the Mayor and Premier whipped together a jerry-rigged, cockamamie plan with a, ahem, 'businessman' whose biggest asset is his father's last name.

How did David Asper become the "favoured son" of the city and the province, even though he lives in Toronto (with a crash pad in Winnipeg)?

Is this a clue?

The blog Waverley West did some research on the connection between Asper, Creswin and Katz, or should we say Katz's friend and colleague Phil Sheegl.

"On April 29, 1997 Asper Properties Inc. legally became Creswin Properties Ltd. Winnipeg media often treat Creswin Properties (893103879MC001) as if it was the personal property of David Asper, his “Go Bombers” plaything. It isn’t. Creswin is a valuable Asper family business.

As reported earlier the President of Creswin is Daniel Edwards. The 3 directors are Gail Asper (VP) David Asper (VP, Treasurer) and Leonard Asper (Secretary, VP). Creswin voting shares are entirely comprised of 100 shares owned by AFT Properties Inc.
AFT Properties Inc. has the same 3 directors, Gail, Leonard and David Asper. It has 5 Officers, Dan Edwards (President), Gail Asper (Secretary), Leonard Asper, VP), David Asper (Chairman) and J. Wayne Pestrak (CFO).
AFT voting shares are compromised of the following:
David Asper Holdings Inc. 250 Common
Leonard Asper Holdings Inc. 250 Common
Gail Asper Holdings Inc. 250 Common

When AFT was amalgamated in July of 1997 the Directors were Israel, Gail, Leonard, David and Ruth Asper. This is not at all surprising. What is surprising is the inclusion of the representatives of two of Winnipeg’s historically powerful mercantile families, Robert Akman (President) and Richard M. Leipsic.

Robert Akman was President of Creswin until June 1, 2003. He was President of AFT until July 2, 2003. Richard M. Leipsic left AFT that very same day.
Daniel Edwards became President of Creswin on October 20, 2003.
Controversial City Planner Phil Sheegl has long been associated with the Akman family. Besides being an Arizona development business partner of the Akmans he also helped gain City approval for the Akman family’s Winnipeg developments in the past."

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