City playing hardball with Katz Goldeyes owner grounding out in lease-extension negotiations By: Mike McIntyre Posted: 7:00 PM CDT Wednesday, Oct. 21, 2020 Last Modified: 11:12 AM CDT Friday, Oct. 23, 2020 Updates

Opinion

Hey there, time traveller!
This article was published 20/10/2020 (1532 days ago), so information in it may no longer be current.

Love him or loathe him — and you can find many in this town who have strong feelings one way or the other — there’s no disputing the fact Sam Katz hit a home run with the Winnipeg Goldeyes.

The longtime city businessman and former three-term mayor brought baseball back to town in 1994, then ushered in beautiful Shaw Park in 1999. The Goldeyes draw more than 200,000 fans downtown every season, among the best for independent teams in North America, and have won 10 division championships and four league titles.

In other words, Katz and pro sports have been as good a combination as peanuts and Cracker Jacks. And yet, you’d have a hard time knowing that by the treatment some members of Winnipeg city council have given him recently. In their eyes, it seems, Katz is nothing but a snake oil salesman who shouldn’t be trusted.

How else to explain Tuesday’s contentious 4-3 vote by the executive policy committee (EPC) to reject a 15-year lease extension that would require the Goldeyes to pay $1.275 million in rent over that time — $75,000 annually over the first five years; $85,000 in the middle five and $95,000 in the final five.

That’s a massive increase from the $1 per year Katz and company have been paying since 1999 on a 25-year deal set to expire after the 2023 season.

Looks like a pretty good deal from the city’s perspective, no? Councillors Brian Mayes, Scott Gillingham and Jeff Browaty think so, voting in favour.

But it was a swing and a miss for councillors Sherri Rollins, Matt Allard and Cindy Gilroy, along with Mayor Brian Bowman, who broke the deadlock. They seem to think Katz isn’t being transparent when it comes to his club’s financial situation, despite not offering a shred of evidence in that regard.

Now the matter heads to a full council debate next week, with the result in limbo and the fate of the Goldeyes hanging in the balance. Nine “yes” votes among the 15 councillors and Bowman will be required for it to pass.

And if doesn’t?

Forget about a Field of Dreams. This has the potential to become a nightmare for the city if some common ground, along with some common sense, can’t quickly be found. Time is of the essence, as Katz doesn’t want to commit to another five-year extension with the American Association until he knows his team’s long-term future.

The city is playing a dangerous game, one that could come back to bite them.

Not only would they fail to collect a single penny of that rent if the Fish end up fleeing town, they’d be left with a white elephant in the form of an empty ballpark with no team to play in it. Good luck finding another owner who would step in to fill the void. Especially in this economy, with the COVID-19 pandemic still wreaking havoc?

Don’t forget, the Goldeyes are coming off a 2020 season where they didn’t play a home game, nor did they bring in any revenue. Who knows what 2021 will bring?

You could also kiss goodbye the $300,000 in annual property and business taxes, $100,000 in game-day parking revenue for the city, and more than 300 full time and part-time staff with an annual payroll of $1,700,000. Many of those are teenagers working their first jobs and learning valuable life skills. For full disclosure, that has included my two children in the past.

Look, I understand the need to be careful when it comes to negotiating deals with sports teams. You can find plenty of examples where rich owners are given breaks that allow them to boost their hefty bank accounts, while grassroots organizations that can use all the help they can get are left to fend for themselves. It’s not just bad policy, but borderline criminal.

Furthermore, I understand Katz hasn’t endeared himself with many in town over previous business dealings that have come under scrutiny.

Just look at the Phil Sheegl matter, with the City of Winnipeg currently suing its former CAO, alleging fraud and conspiracy in the construction of the police headquarters.

In court documents, RCMP claim the contractor, Caspian Construction, paid Sheegl a $200,000 “secret commission” to curry favour in the awarding of a contract. Sheegl allegedly split the money with his close friend Katz, who has denied any wrongdoing and is not among the two dozen defendants named in the lawsuit. The matter remains before the courts and none of the allegations have been proven.

According to Sheegl’s lawyer, Robert Tapper, RCMP recently confirmed in court this payment was not a bribe but a legitimate real estate transaction. The disclosure came during an Oct. 6 motion pertaining to the ongoing litigation against his client.

So is this a case of one’s reputation, fair or unfair, preceding them? It certainly seems that way. Katz and the Goldeyes are being put through all kinds of hoops that other entities that have done business with the city have not. For a recent example, look at Starlight Investments. The Toronto-based developer behind the proposed redevelopment of Portage Place received EPC support for a grant of up to $5 million earlier this year.

Mayes said as much this week, questioning why Katz is being treated differently.

A financial audit has been completed, detailing what the Goldeyes say is all elements of their operation that are “non-proprietary.” That’s still not enough for some, with Bowman asking this week for additional details regarding parking revenues and tax subsidies from the city, which the Goldeyes say prevented them from losing money the last couple seasons. Others say there is nothing else to be gained here.

“The admin report indicated any further disclosure would start to get into private business matters, and we couldn’t force them to disclose any more,” Mayes told reporters.

Eyebrows were raised last month when Katz partnered with the Ottawa Sports and Entertainment Group to sign a 10-year lease to bring pro baseball back to the nation’s capital. Some saw it as a power play for leverage, but in reality this was a separate deal that had long been in the works.

Katz wants to keep the Goldeyes in Winnipeg. Why wouldn’t he, considering how much of a success they’ve been?

But a relationship has to work both ways. Now it’s time for the city to step up to the plate and show the grass is really greener here at home.

mike.mcintyre@freepress.mb.ca

Twitter: @mikemcintyrewpg

Mike McIntyre
Sports columnist

Mike McIntyre grew up wanting to be a professional wrestler. But when that dream fizzled, he put all his brawn into becoming a professional writer.

   Read full biography