Alexandra Gruca-Macaulay
JOHN DANCE PHOTO
The City of Ottawa proposes to demolish the GoodLife fitness facility and the row of adjoining commercial buildings constructed just nine years ago. This is part of the overall scheme to demolish the entire northside stands and the arena below, and then build new northside stands, three 40-storey towers and a separate entertainment centre to the east of the playing field.
City of Ottawa staff are charging ahead with Lansdowne 2.0 once again.
As reported in the June 2022 issue of The Mainstreeter, the City’s proposed plan to rescue the financial sustainability of its
partnership with the Ottawa Sports and Entertainment Group (OSEG) involves a new expensive construction project at Lansdowne.
Despite public assurances by then Mayor Jim Watson and City staff that the approvals of the Lansdowne 2.0 report last June were only intended as a “check- in” with Council to be followed by robust public consultation before any decisions are made, staff are now moving forward with the 2.0 plan and intend to ask the City’s Finance and Corporate Services Committee for final approval in early July.
Although the City had already spent $173M on revitalizing Lansdowne just ten years ago, its partners are dissatisfied with Lansdowne’s financial performance to date. The Lansdowne 2.0 plan would involve the City spending a further $332M, and much more as well for related infrastructure, soil remediation and a number of other uncosted items, and would require the tear down of the newly built retail space that houses Goodlife, as well as the Civic Centre and North side stadium stands.
Construction would involve a new retail platform/podium, topped by 3 high-rise towers ranging from 29 to 40 storeys. The North side stands would be rebuilt, and a new arena and event centre would be moved under the hill (berm) that sits at the east end of the stadium. The City would fund its costs from a variety of sources, including $239M of new debt.
To help repay this debt, the City plans to syphon away 90% of the amount of property taxes assessed when the project is “good to go” from the new retail podium and towers and then divert these property taxes to debt repayment each year for 40 years – a scheme that the City has named “Property Tax Uplift.”
If the project goes ahead, the City would be exposed to about half a billion dollars in either direct or indirect debt repayment obligations. In 2013, the City took on $154M in debt to help pay for “Lansdowne 1.0”—$239M more is needed for 2.0.
Along with this direct debt, the City has issued several guarantees in support of long-term loans that would need to be repaid by the City in the event of default. In 2014, the City Manager used his delegated authority to issue a guarantee for OSEG’s retail loan—about $100M of this loan is still outstanding. Then, in 2015, the City and OSEG settled a dispute over the $23.6M that OSEG had spent to fix the Civic Centre roof.
Under threat of legal action, the City settled with OSEG by having the Partnership take out a loan to repay OSEG and getting the City to guarantee this loan –the roof loan still has about $18M outstanding (the roof itself would be torn down under 2.0).
In 2020, OSEG asked to restructure some of the terms of its partnership agreement; the City staff report cautioned that if OSEG’ requests were not approved, there was a “very real risk” that OSEG might choose to default leaving the City (i.e., taxpayers) responsible for repaying both guaranteed loans.
Finally, Lansdowne 2.0 would require the City to issue a guarantee in support of OSEG’s $30M retail podium loan. If Lansdowne 2.0 goes ahead then the City’s total outstanding Lansdowne debt would be approximately $339M, and its loan guarantees would be about $148M – close to $500M in total.
On top of that, the City would fund $93.6M from other sources for the remainder of its costs. With concern mounting that time is running out for the possibility of engaged consultation for a very costly -second only to the LRT – yet, poorly understood City project, the Old Ottawa East, Glebe, and Old Ottawa South community associations, together with the Federation of Citizens’ Associations, Parkways for People, and Synapcity wrote Mayor Sutcliffe and City Councillors in late February asking that “no further decisions…be taken until there has been meaningful consultation with the community.”
Given how much the economic climate has changed since the Lansdowne 2.0 financial projections were presented, the letter also called for an update of financial data, as well as a risk analysis—particularly on financial projections associated with Lansdowne’s retail space—the part of the Lansdowne plan that shoulders the greatest burden for generating future financial success.
The letter also called for full disclosure of financial statements for each part of the Partnership “bubble”: Retail, Stadium, Redblacks, and Ottawa 67s.
In early March, the City, through its Engage Ottawa site, launched its public engagement strategy with a survey that Councillor Menard has called “concerning.” The short survey asks, what some have called, limited, “marketing” type questions: e.g., “How did you hear about the proposed Lansdowne 2.0 revitalization?”
Community representatives have asked staff to include “Property Tax Uplift” on the site’s list of defined terms, to inform the public of the berm’s loss of 58,000 sq. ft. of public park greenspace due to the new event centre’s non-accessible roof, and to include the fact that the Lansdowne 2.0 staff report has stated that the Civic Centre and North side stands are structurally sound.
Staff thus far have been unwilling to update the information as requested.
