Pro-Lansdowne Mayor, Councillors unfazed by risk factors, debt load in approving Lansdowne 2.0 project

JOHN DANCE

The massive Lansdowne 2.0 (L2.0) plan is proceeding despite the opposition of most urban councillors and growing city-wide dissatisfaction with the massive expenditure.

The approved project will see a City expenditure of at least $418.8 million and, over the next 7-10 years, the demolition of the existing covered north stands with the arena beneath them. In their place, the plan will see the construction of two 40-storey residential towers, new commercial space, new uncovered north stands, and an event centre (arena) that will occupy a third of what is now parkland and the toboggan hill.

City staff and the Lansdowne partner, the Ottawa Sports and Entertainment Group (OSEG), successfully made its case to the mayor and 14 councillors – all but two of them from the suburbs and rural areas – to proceed with the plan to replace the “functionally obsolete” north stands and arena with (i) the new stands that lack a roof and provide 1,600 fewer seats and (ii) a new “entertainment centre” that has 3,000 fewer seats than the existing arena. Improved accessibility, lower facility operating costs, and massive economic benefits were other claimed key aspects of the financial model.

Key to the L2.0 financial model is the premise that “Market growth within the [entertainment] industry is predicated on an efficient venue with less seats and higher costs per seat to allow for better returns,” as per the report that went to councillors.

New vs existing facilities

A decade ago, the City spent $210 million to renovate Lansdowne Park, with the expectation that by now its partnership with OSEG would have returned almost $100 million to City coffers. In fact, no profits were generated for the City and OSEG incurred growing losses prompting OSEG to propose – with the City’s support – the now-approved rebuilding of the major facilities.

The first renovations included a new roof for the north stands, improvements to the arena, and “Block J,” a new commercial area immediately to the north of the arena, all of which must be demolished to make way for the new facilities. Although commercial space will be built with L2.0, the net increase will be just 2.3 percent.

Construction of the new entertainment centre begins this month and the Great Lawn and the toboggan hill will be fenced off for the next three years. The event centre is scheduled for completion in 2028 and the north stands are to be completed by 2030 with the two towers beginning “after 2031.”

The “hauling road” for removing the demolished building material and contaminated soil and for delivering construction materials will be on the south side of the south stands. Trucks will proceed under the Bank Street bridge, along Queen Elizabeth Driveway and Wilton Crescent before going north or south on Bank Street.

Financial basis of the plan

Mayor Mark Sutcliffe has said the “net” investment and cost for City taxpayers will be about $130 million rather than the full cost of at least $418.8 million because the new facilities, commercial space, and residential towers are projected to generate substantial revenues.

But most of the L2.0 expenditures will be funded by City debt, and 75% of the municipal taxes from the towers will be diverted to help cover a fifth of the debt’s repayment. A similar “property tax uplift” approach was taken with the initial Lansdowne project. This diversion means all taxpayers must cover most of the cost of incremental services for the new Lansdowne residents and this increased cost will be simply covered by increased taxes for every taxpayer.

The City forecasts that the City – OSEG partnership agreement will generate more than a third of the revenues needed to repay the Lansdowne debt. This presumes that retail rentals, a 22% increase in ticketed attendance, and increased ticket prices will financially turn around operations, where the bulk of the profits are only projected to start after 2052.

An increased municipal accommodation tax and an increase of OSEG annual rental payments from one-dollar to $500,000 are forecast as the other new sources of revenue to pay off the debt.

Significant opposition was voiced

A growing number of people objected to the proposal with many fans of the Ottawa Charge of the Professional Women’s Hockey League (PWHL) objecting to the reduced size of the new event centre.

After Council approved the L2.0 plan, Amy Scheer, executive vice-president of PWHL business operations, declared “We will not play at Lansdowne 2.0.” Last season, the Charge averaged 6,592 fans in their 12 games played at Lansdowne – about 700 more than the seating capacity of the new entertainment centre.

Capital Ward Councillor Shawn Menard led the campaign for a “Better Lansdowne” alternative by which much less would be spent and the existing facilities would have annual improvements to extend their life and undergo needed changes like better dressing rooms, washrooms, and updated accessibility features.

In the end, he and most of the other urban councillors were successful in getting agreement on some changes, notably restoration of about $5 million in funding for affordable housing “that would otherwise have been syphoned off to pay for private parking for the luxury towers”; a requirement that staff develop a financial oversight model that will give greater scrutiny to, and transparency of, the L2.0 financial performance; a guarantee to keep the Ottawa Redblacks and Ottawa 67’s at Lansdowne until at least 2042 (previously, they were free to leave after 2032); an agreement to improve the pedestrian experience throughout Lansdowne; and funding to install a much-needed bus shelter on Bank Street to provide greater comfort to transit riders.

“We fought hard over the past months to tell Ottawa residents about the many downfalls of the proposal, and we achieved that goal,” Menard told attendees of the recent Old Ottawa East Community Association (OOECA) annual general meeting. “We brought accountability to that decision and helped stir up a city-wide discussion.”

“Now with the project approved, our focus will continue to be affordable, impactful quality-of-life improvements for residents, including overseeing next steps for construction at Lansdowne to mitigate negative impacts as much as possible,” Menard concluded.

At the AGM, Menard thanked Alexandra Gruca-Macaulay, OOECA’s Lansdowne chair, who led the critical financial analysis of the proposal, working with colleagues in the Glebe, Old Ottawa South and elsewhere. The trenchant analysis of Gruca-Macaulay and the Glebe’s Neil Saravanamutoo, June Creelman and Carolyn Mackenzie exposed the many problems of the L2.0 plan but, in the end, the mayor, and suburban and rural councillors didn’t seem fussed by the risk factors and the debt load that the analysts and local residents warned against.

The City is offering a public information session on the L2.0 construction at 6 – 8 p.m., Wednesday, December 17th at TD Place Arena, Concourse via Gate 2 off Exhibition Way or via accessible entry at Gate 1 on Bank Street.