Murray Wood: Feint by numbers?
The City of Regina is using some interesting math to justify why it should sell a big chunk of its exhibition associatio...
A former mayor of Regina is giving a clear nod of approval to a potential sale of some facilities at the city’s REAL District.
Michael Fougere spent 23 years on Regina City Council, including five terms as a councillor in Ward 4 and two terms as mayor. During an appearance on The Greg Morgan Morning Show on Monday, Fougere said he likes the offer the city is considering, which would see several buildings at the REAL District sold to the Brandt Group.
Read more:
- Regina’s REAL District sale plan draws support, calls for caution
- City of Regina plans partial sale of REAL District to Brandt, promises cost savings
- Uncertainty around REAL makes booking live events challenging: CEO
Fougere said the long-term result of this deal, if it goes ahead, could be greater investment in the REAL District that wouldn’t happen otherwise, because the organization’s current business model is struggling.
Mosaic Stadium and the REAL District in Regina. (Lisa Schick/980 CJME)
Listen to the full interview with Fougere, or read the transcript below:
The following transcript has been edited for length and clarity.
GREG MORGAN: What did you think, initially, and have you taken any extra time to digest and dig a little deeper to see if it’s in our best interest?
MICHAEL FOUGERE: I like this deal a lot. This is going to solve some big problems for REAL, and therefore the City of Regina, and it’s going to call for investments that would otherwise not be taken.
The value of these buildings is less than the cost of repairing them. Brandt must invest $15 million in two years. That kind of equity investment is not going to happen by the city, and those buildings will be fixed up.
I think this will be a great addition to the property itself. We retain the ownership and control of what I consider to be the major, newer buildings: Mosaic Stadium, Co-operators Centre, AffinityPlex, (the International Trade Centre). But we are divesting buildings that are just simply old, like the old Commercial Cattle Barn, the Stockman’s Building and the Agribition Building.
We’ll work with them to fix the parking lot to the west of Mosaic. The Canada Centre Building is also going to go over to Brandt, so we’ll see what happens, but I do believe that there’s no other way for the city, at this point, to fix those buildings on the property.
REAL has been struggling. They asked, a couple of years ago, for $12.7 million just to stay afloat, so the business model right now does not work. So, the question is, what do we do? Is this the best deal? We could always look for something different, but Brandt stepped forward and put a deal forward that I think is reasonable and fair and will really animate that property over time, so I’m pretty pleased.
MORGAN: A lot of citizens seem to focus on just $6.5 million, and that it seems like a ridiculously low assessment, and question if the land is worth more. What do you think about that?
FOUGERE: There’s no question that the city would have done an appraisal of the building and the land. That would be done. The issue is that the buildings themselves have no value to them. They’re falling apart, or beginning to fall apart, and they’re not in good shape and they need to be fixed. That’s why the value is where it is. I’ll accept that number as being part of due diligence.
MORGAN: There are a few clauses, including that the buildings to be purchased by Brandt are going to be exempt from property taxes for five years. Do you think the city is giving the Semples too many breaks in this deal?
FOUGERE: No, I don’t think so, because there’s no tax being paid on those buildings right now. I think this is part of the package of saying “Take the risk – a risk the city cannot, and REAL cannot actually assume right now – in exchange for the equity investment of at least $15 million,” and I know that there’ll be more investments that will happen across the piece. That’s just what’s in the proposal today, and that’s fair at that tax jump for five years.
MORGAN: In the long-term, do you think this deal could prove promising economically?
FOUGERE:I think there’s no question that this just begins to put in place a vision for that property that a private owner can do, in the context of what the city owns as well, to be something that would not happen otherwise. A new arena, as far as I know, is not part of this agreement at all.
It might happen, but I think that’s down the road a ways. I think there will be investment in the stadium right now. That’s my understanding. I hope that people take the long view of this.
The long view is an animation and investment of that property that otherwise would not take place, because REAL’s business model is struggling, and they just simply cannot provide for the repairs of those buildings.
