Stadium casino deal: more questions than answers

British Columbia Premier Gordon Campbell and B.C. Pavilion Corporation chairman David Podmore gave themselves a pat on the back March 26 for finding some revenue to pay for the $563 million B.C. Place Stadium renovation.

Less than a week later, the deal began to look rather underwhelming.

Paragon Gaming announced March 26 that it planned to build a $450 million casino and hotel complex in a parking lot west of the stadium. The land was put up for lease by PavCo, the taxpayer-owned Crown corporation that operates B.C. Place.

The stadium closes April 4 and the air-supported fabric roof will be deflated May 3. A $458 million retractable roof will be applied in time for the stadium to reopen in summer 2011. The B.C. Lions will play in a temporary stadium at Empire Field in 2010.

Tourism minister Kevin Krueger, whose ministry is responsible for PavCo, told a budget hearing on Wednesday that Paragon was among just two bidders that responded to the request for proposals in spring 2009. He refused to name the runner-up. The B.C. Liberal government has a problem with credibility and transparency, so skeptics will wonder if there was really a runner-up. But I'll give Krueger benefit of the doubt for now.

Could the tiny response to such a lucrative opportunity be because banks are reluctant to lend to developers who do not own the land they are building on? That is the basic reason behind the City of Vancouver bailout of Vancouver Olympic Village developer Millennium. Wall Street hedge fund subsidiary Fortress Credit Corporation took the risk that no mainstream bank wanted to and then walked away when the recession hit.

Paragon has a 70-year lease at $6 million annually. It'll be adjusted for inflation after 10 years. PavCo wants to sell the name of the stadium, more advertising inside, book more events and lease more land. The business plan and financing formula, however, are shrouded in secrecy. Both Campbell and Podmore told me that it won't be published. Cabinet secrecy is the reason. The government doesn't trust taxpayers (shouldn't it be the other way around), so you and I are unable to learn about the most-expensive stadium renovation in Canadian history.

Krueger also confirmed that T. Richard Turner phoned him to discuss the Paragon proposal. Turner is a director of VANOC, chairman of ICBC, former chairman of the B.C. Lottery Corporation and frequent donor to the B.C. Liberals. He is a minority shareholder in Paragon's Canadian subsidiary which operates Edgewater Casino at the Plaza of Nations in downtown Vancouver.

Krueger said Turner “called me to make sure that I knew that the retractable roof was if not a deal-killer, at least Paragon wouldn't be able to make the same proposal that it had made to (PavCo), and that was our only conversation.”

PavCo CEO Warren Buckley claimed Turner did not participate in negotiations or influence the content of the lease. But the optics are certainly odd.

Why is PavCo relying on a casino company part-owned by a friend of the Premier when the Vancouver Whitecaps' ownership group and B.C. Lions' owner David Braley have deep pockets and stand to gain because of the renovations? This is, after all, a government that privatized B.C. Rail and has entertained all manner of partnerships with the private sector.

The governing Liberals were dead-set against gambling expansion when they were the opposition and the NDP was considering "Monaco-style" casinos in the 1990s. A B.C. Medical Association study called Stepping Forward: Improving Addiction Care in British Columbia was published. It says alcoholism and gambling addiction are more prevalent in B.C. than drug addiction. An estimated 159,000 people in B.C. are addicted to gambling -- that's more people than attended the opening and closing ceremonies of the 2010 Winter Olympics and the men's gold medal hockey game!

Until Campbell and Podmore realize they're playing a high stakes game with taxpayers' money and taxpayers deserve transparency, I will wonder if this is another Fast Ferries or Convention Centre scandal waiting to happen.