A three-month race to completion

While most workers at B.C. Place Stadium took a break for a safety appreciation barbecue on June 28, B.C. Pavilion Corporation chairman David Podmore and Jobs, Tourism and Innovation Minister Pat Bell hosted another media tour of the stadium, which is undergoing a $563 million, taxpayer-funded renovation. (Click photos to enlarge.)

The installation of the roof fabric, originally set for February, is now taking place. The schedule was turned upside down after French cable-installation subcontractor Freyssinet encountered severe problems that led to Quebec steel contractor Structal telling shareholders it was liable for a $25 million cost overrun.

Podmore says the project remains within the $563 million budget and is on target for its scheduled Sept. 30 opening for the Edmonton Eskimos matchup with the B.C. Lions.

A public open house on Sept. 25 remains a "very slight possibility," according to PavCo owner's representative Roy Patzer.
"When the public comes in here I'd like to see a finished product and wow factor," Patzer said. "We can't sacrifice schedule for having the public in here. If we're far enough advanced we'll probably do that."

Patzer explained that substantial completion was originally pegged at Nov. 1, based on the contract with PCL that allowed for partial occupancy under an unfinished roof. He said the date was brought forward to Sept. 30 when PavCo decided to forego holding events earlier.

A portion of the retractable roof fabric hangs from the centre node and more is coming July 7. The tower that supported the centre node is all gone. Workers dangle from harnesses among the maze of cables that partially obscures the sky. A glass ring, which will separate the fixed fabric from the retractable fabric, is nearing completion. Large parcels containing fabric are resting on the ribbing. German company Hightex has the retractable job, while USA Shade from Dallas is working on the fixed fabric. Patzer said the roof would be commissioned through the month of September to have it ready for opening and closing on Sept. 30.

The installation of 54,500 new red and grey seats has begun. Excavation crews are digging up the floor for a new drainage system to be installed before the synthetic turf surface is applied.

Meanwhile, talks continue with Paragon Gaming about the move of its Edgewater Casino to a parcel of land west of the stadium. Vancouver city council voted against the casino's expansion in April, but not its relocation.

Podmore neither confirmed nor denied that PavCo is negotiating to sell the naming rights for the stadium to Telus. Sources told The Sport Market in March that Telus was the successful bidder and the stadium could bear the name of the company's Optik TV brand. Concert Properties chairman Podmore has a direct pipeline to senior executives of the telecommunications giant and its union. Concert's board includes Telus's investment management director Garnet Andrews and treasurer Robert Gardner and Telecommunications Workers Union president George Doubt and business agent Lee Riggs. Podmore is also on the board of Fortis BC. The former Terasen Gas sponsored the Olympic cauldron built on Jack Poole Plaza at PavCo's Vancouver Convention Centre.

The Vancouver Whitecaps debut in B.C. Place on Oct. 2. The Vanier Cup national college football championship is Nov. 25 and the 99th Grey Cup on Nov. 27.

PavCo says cost overruns not its problem

What's up with B.C. Place Stadium's roof, you say?

Well, for one thing, the price.

TSX-listed Canam Group (CAM) revealed on April 21 that it would take an "after-tax reserve of $25 million" for 2011's first fiscal quarter for "additional costs for the completion of the cables" on B.C. Place Stadium's retractable roof.

"The corporation believes this reserve represents the likely loss until completion of the project, while adding that discussions to reduce the impact of the reserve are ongoing with various project participants," said a news release.

Further information is to come April 27 when Canam Group president Marc Dutil will conduct a teleconference with financial analysts and media. Spokesman Jasmin Gosselin said Dutil was not available for earlier comment on the B.C. Place overrun.

Canam's Structal Heavy Steel Construction unit announced Oct. 28, 2009 that it scored a contract worth more than $100 million from PCL Constructors Westcoast. Steel was to be sourced from St. Gedeon de Beauce, Quebec and Sunnyside, Wash. by the company that supplied steel to 53 North American stadiums and arenas, such as Air Canada Centre, the new Giants Stadium and Red Bull Arena.

"Both the deliveries and the erection work will begin in the early part of 2010 and continue until the end of the year," said the 2009 news release.

Based on that news release, the schedule has already gone overtime. The last of the 36 steel masts was not in place until Jan. 13 of this year. The original deadline was the end of December 2010. Installation of the roof fabric was supposed to begin in February, but that won't happen until May. B.C. Pavilion Corporation CEO Warren Buckley told me earlier in April that testing of the finished retractable roof would happen at the end of August or start of September with a public open house on Sept. 25. Reopening night is Sept. 30 when the B.C. Lions host the Edmonton Eskimos.

B.C. Pavilion Corporation chairman David Podmore and Buckley did not respond to email queries about Canam's $25 million overrun. Buckley was not available when I called his office Tuesday morning, but spokesman Norman Stowe said via email: "Canam’s issue has no impact on PavCo which has a fixed price contract. No one is looking to PavCo for any shortfall."

PCL inked a $318 million fixed-price contract for the roof work in November 2009. The announced cost of the taxpayer-funded renovation is $563 million (it was supposed to be $365 million).

An announcement is expected soon that the stadium will be renamed for a brand of telecommunications giant Telus. Sources say the company won the bidding for naming rights.

APRIL 27 UPDATE

Canam reported a $39.7 million first quarter loss on April 27 and blamed it on "fierce competition in some business segments as well as the provisions for B.C. Place."

Dutil said Canam's Structal division got the B.C. Place contract in spring 2009 but the final contract wasn't executed until the fall of 2009. He said Structal's scope of work included the columns, compression beams, catwalks, arches and facade elements.

On a teleconference after his company's April 27 annual general meeting, Dutil said Structal "encountered severe delays in the cable portion of the work" in the first quarter after relying on the expertise of France-based Freyssinet.

"We are not cable experts and therefore relied on a third-party to estimate, price, plan and execute the installation of the cable work required to support the fabric roof, the centre node and all the elements required for the retractable roof system," Dutil said.

"During this first quarter we encountered severe delays in the cable portion of the work and hence we estimated that a $25 million after-tax reserve was warranted at this time. We hope to be able to recover a portion of this amount. Our first priority remains to deliver a safe, quality and timely project to our customer PCL and the end-user, B.C. Pavilion Corporation... The circumstances of the B.C. Place job are very difficult, but they confirm that even in the face of such challenges we do not run away."

"We had indications that the erection portion of these cables would be a lot faster and cost a lot less than it's turned out to be. It is my understanding that the taxpayers of B.C. are not on the hook for this, this was a contract where we have to perform at a fixed-price and we'll negotiate between ourselves and third parties. No one intends to refill the bill to someone else.

Dutil said Structal is in talks with Freyssinet to resolve the matter, but his company's work will be done in late July or early August.

"It's going to be a marvel. It's going to be well-done, safe and you're going to enjoy it for many years in Vancouver. It will just cost a little more than expected -- to us."

Asked for comment on the Canam overrun, PavCo CEO Warren Buckley told me: "This is a Canam matter and has nothing to do with the delivery of the completed stadium within the scope of the fixed price contract. There is not impact on budget and we are very confident that we are on track for a Sept. 30 completion."

Name game

A new name is on the way for B.C. Place Stadium.

Taxpayers are on the hook for much of the $563 million budget to renovate the 1983-opened stadium. Some of the costs are supposed to be defrayed by the sale of naming rights.

B.C. Pavilion Corporation chairman David Podmore told me in mid-January that the corporate naming deal could be decided in late March or early April. Timing for the announcement would hinge upon both government approval and the marketing strategy of the sponsor itself. Though he refused to offer any hints, he said the companies involved in negotiations were not government enterprises. Podmore also said Paragon Gaming and its Edgewater Casino were not in the running for the name. B.C. Place general manager Howard Crosley said Budweiser was not a candidate, despite becoming the official stadium beer.

So the speculation continues.

Four highly active sectors appear to be the most logical from which to draw a naming rights sponsor: financial services, telecommunications, energy and retail.

Scotiabank already sponsors arenas in Ottawa and Calgary, is the naming sponsor of Nat Bailey Stadium in Vancouver and is the official bank of the Richmond Olympic Oval. If its name went up on the B.C. Place marquee, would shareholders question whether it's in the banking or stadium business? BMO already has its name on Toronto FC's stadium. Which might make RBC the most logical suitor. RBC has had a low profile since it sponsored the 2010 Winter Olympics and its torch relay.

Telus hung up on Canucks Sports and Entertainment after General Motors decided to drive out of its deal for "the Garage" early. Rogers slipped in last July, weeks after Bell slapped its name on the jerseys for the Vancouver Whitecaps. Bell is also the name on the Empire Field pitch. Expect the Whitecaps to play on Bell Pitch beginning in October. Vice-president Loring Phinney told me the company is not bidding for the building's name.

Telus CEO Darren Entwhistle said at the March 9 unveiling of the $750 million Telus Gardens office complex proposal that the stadium naming rights are of interest to his company.

On March 1 Terasen Gas became FortisBC. Natural gas is plentiful in B.C. where Fortis is the biggest distributor. The Newfoundland-based company has utility operations in five provinces, plus hotel and commercial properties. The Fortis board of directors includes Podmore. Podmore was instrumental in convincing Fortis to underwrite the Olympic cauldrons at B.C. Place Stadium and Jack Poole Plaza. Could Podmore also convince his fellow directors to turn the stadium into FortisBC Place?

In January, U.S. discount retailer Target bought leases for Zellers' 220 stores for $1.8 billion from Hudson's Bay Company. The Minnesota company plans to convert as many as 150 to Target by 2014. Naming rights to the stadium would be beneficial, if it were to begin the makeover early,

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.