TorSun article on Argos/CSA/York Stadium

[marktci]

Brick by brick

The Argos' stadium deal ...

By PERRY LEFKO, TORONTO SUN

ON THE morning of Sept. 29, the first-year owners of the Argonauts were summoned to the University of Toronto for a meeting that would forever change the future of the football club. It would be the latest meeting -- and, as it turned out, the last -- in the plans to build a $70-million football/soccer stadium on the hallowed Varsity grounds.

No sooner had the Argos owners met the U of T's new interim president than they were told the school had decided to discontinue plans to build the facility. Howard Cynamon and David Sokolowski looked at one another utterly speechless, completely caught off guard. As Cynamon recalled, it was like being hit by a stun gun.

Originally announced as a 25,000-seat stadium, the design had been shrunk by about 5,000 because of traffic and noise concerns from the neighbourhood and factions within the school. But there had been no indications-- at least to the Argos owners -- that the U of T planned to drop the stadium ball.

The meeting continued for another 60 to 90 minutes, during which Cynamon and Sokolowski made a proposal to personally add an extra $14 million to the rising cost of the project and cover any subsequent overruns.

"They said they would take 24 to 48 hours to think about that," Sokolowski recalled. "We thought the 48 hours would give us and the school the opportunity to sit down and assess our proposal further."

Cynamon and Sokolowski left the meeting and spent a couple of hours outside in the parking lot, watching a girls soccer game and wondering what had just happened. All the while, the university executive continued to talk about the project and, as it turned out, peer out the window at Sokolowski and Cynamon.

And then it happened. The U of T called an audible.

U of T's vice-president and chief advancement officer, Jon Dellandrea, approached the Argos owners and indicated the university had reconsidered and decided to formally withdraw from the project. While Dellandrea could not be reached for comment, Sokolowski said he had been told by the school official that there were people in the university who felt that, regardless of the cost of the project, it was inappropriate to have a private/public relationship with the Argonauts. Moreover, there had also been serious concerns by residents in the area.

Dellandrea told Sokolowski and Cynamon the school planned to announce its withdrawal with a press release the following morning, although the story already was being leaked.

"It was like you just got up from a beating and somebody kicks you in the head again," Cynamon said. "At that point our hearts were ripped out of our bodies."

"We were also told this was going to have (the U of T) governing council vote (in December)," Sokolowski said. "It never even got to the committee on the way to the governing council. It was pulled before it even got into the process. For whatever reason the university decided it was too much pressure or they didn't want to be associated with the Toronto Argonauts and the Canadian Football League; that it felt the business model wasn't strong enough."

Cynamon and Sokolowski had to gather their emotions and be at the SkyDome a couple hours later to watch their team play host to the Calgary Stampeders.

"We got to the game, but frankly I couldn't even tell you what happened," Cynamon said. "It was a haze. It was a cloud. I think we were trying to cover up with our bad acting that something was wrong. I don't remember who I saw that night. I don't remember what I said. That was really a bad moment."

The Argos beat the Stamps 49-22.

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AFTER U OF T withdrew, the Argos owners called Kevan Pipe, the Canadian Soccer Association's chief operating officer. The federal and provincial governments agreed earlier in the year to pay a combined $35 million toward the cost of the project if the CSA secured the rights to the World Youth Championship. That happened in July.

Pipe was in Toronto, preparing for his own meeting with the U of T the following morning, when the Argos owners called.

"I was pretty shocked," Pipe said. "It came totally out of the blue. We heard there were some rising costs, but we had already met with the architects to look at some solutions to contain some of those costs and those solutions had been reached."

The next day Pipe made a call to FIFA, the world governing body of soccer, to make sure the setback would not jeopardize Canada's chances of playing host to the soccer championship. FIFA indicated its desire to keep the tournament in Canada and to give the CSA additional time to work out the stadium dilemma.

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BECAUSE SOKOLOWSKI and Cynamon had vowed to build a stadium, they had to devise a quick change in strategy and go to the hurry-up offence. While the U of T issued a press release explaining its decision to back away from the project because of escalating costs -- an idea Cynamon denied quite emotionally in a radio interview -- the plan to shift to an alternative stadium site already had begun. Sokolowski phoned York University's chairman of the board, Marshall (Mickey) Cohen. The two had known one another from a previous deal Sokolowski's company, Tribute Communities, entered into with the university to build 400 homes on the perimeter of the school's property. In the summer of 2003, when Sokolowski's name started to surface as a potential buyer of the Argos, Cohen called him wondering if it was true. When Sokolowski confirmed it, Cohen told him the team needed its own stadium and that York had plans to build one for its own needs, so it could be a perfect fit for both parties.

Sokolowski agreed, but the stadium project shifted back to U of T when Maple Leaf Sports and Entertainment Ltd. suddenly jumped into the mix in December of 2003 with intentions to partner with the school on a multiple sports complex/shopping centre in the Bloor/Devonshire corridor. The Argos had no choice but to watch those developments because they potentially would be included at some point, possibly with MLSEL buying a percentage of the team.

Some three months later, MLSEL withdrew from the project because of the low return on investment and the Argos, along with the CSA, joined together in resurrecting the project at the U of T.

Now, following various twists and turns at the U of T, Sokolowski wanted to know if York still had an interest in building a stadium.

"So, you want your old room back?" Cohen jokingly asked Sokolowski.

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ENTER JOE VOLPE, the federal minister responsible for Ontario and the Greater Toronto Area. For the $27 million federal government funding to continue to be part of the project, it required a partnership with a public institution. Exhibition Place, which had long been mentioned as a possible site by both the Argos and the CSA, was owned by the province and municipally operated by the City of Toronto. The city could supply land on the site but couldn't provide any funding. Volpe said Toronto Mayor David Miller had called him earlier in the year indicating his preference for Varsity over the Ex. In fact, according to Volpe, Miller said the Ex "was just completely out of the picture."

So Volpe focused his attention on York after the failed Varsity project and contacted the school's president Dr. Lorna Marsden. York had a group of executives already talking internally about the stadium project, but wasn't prepared to move forward without government support.

Coincidentally, Marsden happened to be in Ottawa when Volpe contacted her and the two continued their discussion. Marsden indicated York's desire to make the project happen.

Volpe also spoke to the mayor of Vaughan, North York councillors, federal cabinet ministers, GTA caucus colleagues and the CSA to gauge whether they were interested in maintaining the project. He received a positive endorsement from everyone.

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ON OCT. 3, Sokolowski, Cynamon and their business manager huddled at York with its vice-president of finance, Gary Brewer, and a representative of Capital Canada, a consultant/financial house engaged by the university to help out with negotiations and provide advice.

The meeting took a few hours during which the financial splits of the deal were discussed along with a concept -- provided by the Argos -- of how the stadium would be built and operated so that it physically and culturally reflect the university's needs and realities.

Following phone and e-mail exchanges, the parties met three days later in the offices of Capital Canada and banged out the broader terms of the deal.

FINAL PARTICULARS

On Oct. 11 -- Thanksgiving Day -- York officials and the Argos put together the final particulars of the deal so it could be presented to York's 32-member board of directors. The deal consisted of the federal and provincial governments contributing $35 million, the university adding $15 million and the Argos covering the balance of the projected $70-million stadium.

A conference call was set up for Oct. 13 at 8 a.m. Some 20 board members were rounded up on the short notice and Brewer took them through the terms of the deal. The call lasted about an hour.

"The board asked all the right due-diligence questions and were absolutely unanimous in their enthusiasm -- students, staff, faculty, external governors," Marsden said. "They gave me permission to go ahead and make the deal on those terms."

Marsden called Volpe and indicated unanimous support for the project from the university's governors. Miller also was briefed.

On Oct. 15, York officials issued a press release indicating an important announcement at the school on Oct. 18. By this time, the word was out that the deal was done.

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IT TOOK only 11 business days to do the deal, but the seeds were sown long before that because of the Argos' relations with York and the co-operation of the CSA. But it was Volpe who proved to be a key pointman.

Volpe expressed the importance of making the deal happen at York or the government would remove its financial support.

"I just told everybody 'listen, if you guys aren't in, we're not in. Period,' " Volpe said. "It's a big slap in the face to everybody, it's a big black eye for Canada if this thing doesn't go. But we're not in the business of shoving money down anybody's throat. We're in the business of investing for Canada and Canadians, and if private interest, public interest, academic interest don't see the value in this, why should we?"

Had negotiations taken too long it could have added excess delays to the building process, which would have impacted on the completion of the stadium in time for the soccer championships.

"They didn't have as elaborate a process as the University of Toronto," Volpe said. "But it needed to be done quickly otherwise the whole thing would have gone up in smoke."

"It tells you how far along we were with York when we chose U of T," Cynamon said. "We had a deal we could have announced the same day with York. We were that close.

"We just picked the wrong date."