Critics hit purchase of $1.78-M studio partly owned by troubled Crocus fund
Winnipeg Free Press
Friday April 8 2005
By Paul Egan
THE Manitoba government is in the movie business after paying $1.78 million to buy a struggling Winnipeg film studio.
Critics immediately condemned the government's purchase of the Prairie Production Centre sound stage as an overpriced taxpayer bailout.
The partnership that owned the studio included the crisis-stricken Crocus Investment Fund and firms controlled by wealthy Winnipeg businessmen Arni Thorsteinson and David Asper.
"This is essentially corporate welfare," said Adrienne Batra, Manitoba director of the Canadian Taxpayers Federation.
"This is $1.8 million that could have gone into classrooms, it could have gone into road repairs and it could have gone into reducing hospital wait times."
Culture Minister Eric Robinson and film industry officials defended the purchase, saying the continued operation of the studio is essential in maintaining Manitoba's competitiveness as a movie locale. The movie industry ci tes studies that show each $1 spent on producing a movie in Manitoba generates $13 in economic spinoffs. Robinson said nobody but the province was interested in buying the money-losing studio.
Asked why the province could not have purchased the studio for less if there were no other buyers, Robinson said: "That's a good question."
Provincial officials said an assessment of the studio's value was made by the Department of Government Services' land management services branch and the $1.8-million assessment was confirmed by the province's Land Value Appraisal Commission.
Tory culture critic Jack Reimer called the purchase a waste of taxpayers' money and suggested the actual costs will be much higher. "What is it going to cost taxpayers in the long run to run this facility?" Reimer asked.
The Crocus Investment Fund had $517,500 in debt and equity investment in Prairie Production and was a limited partner in the studio venture.
Tory industry critic John Loewen said he's worried that with Crocus sidelined, the government is now injecting provincial money directly into entities, such as Prairie Production Centre, once supported by Crocus. The 3,716-square-metre studio, which opened in 1999 on Pacific Avenue, includes a carpentry shop, wardrobe room, makeup studio, and offices. An expansion and improvements costing $1.8 million were completed in 2002.
The province plans to run the studio through one of its Crown corporations, the Manitoba Centennial Centre Corp.
A Thorsteinson company is the general partner in Prairie Production Centre and is liable for all the partnership's debts, according to the city r eport. Thorsteinson, the president of Prairie Production Centre Limited Partnership and of real-estate company Shelter Canadian Properties Ltd., was out of town yesterday and could not be reached for comment.
CanWest Global Communications executive vice-president David Asper, whose company Daremax Enterprises Ltd. is a limited partner in the studio, said his understanding is that any money from the sale is going directly to pay debt.
"I can assure you there is no money being received by me," Asper said. "Everybody is losing their money and the province is getting an asset that's worth a lot of money."
paul.egan@freepress.mb.ca