There was a lot of skepticism when the proposal to redevelop Lansdowne was presented.
Arguments aside about how it was developed, I think there is one thing that many of us can agree – Today’s Lansdowne is a thousand times better than it was.
The park improvements, farmers’ market, sports and entertainment, pedestrian-focused streets offer visitors a fabulous place to go.
Like Mooney’s Bay and ByWard Market, Lansdowne Park is an asset that all residents enjoy.
I have enjoyed my fair share of Rough Riders games, Redblacks, the Grey Cup, watching the woman’s World Cup, the Ottawa Fury play, multiple concerts, the Ottawa 67’s championship runs, Panda Games – the list goes on and on of what you can see and do.
The results of the revitalization are seemingly perfect.
But how we got here is complicated – and accordingly, far from perfect.
Let’s backtrack for just a moment,
To fix an out-of-date and falling apart City-owned facilities, it signed an agreement with the private sector.
Along came the Ottawa Sports and Entertainment Group – OSEG.
With two local and well respected business leaders at the helm, John Ruddy and Roger Greenberg, the ideas of building up and building a Lansdowne of the future seemed not only attainable but also reasonable.
The park’s revitalization added usable green space, play areas, sport and event space, retail and restaurants, and restored valuable heritage buildings.
The commercial and residential developments generated revenue to unlock investments to refurbish the Stadium, remember the south side stands concrete failures…
When Lansdowne finally reopened, there was a lot of hope and enthusiasm. And attendance. According to the staff report, since it opened six years ago, there have been over 20 million visitors to the park.
But Lansdowne does not generate the revenue assumed it would because of the uplift cost to reinvest into the stadium, parking lot and surface treatment.
The partnership the City penned with OSEG, the Lansdowne Park Partnership Plan, established how the two parties work together in two separate agreements.
The main point is that the City retains ownership of the land, leases the facilities and land to OSEG. (This does not include the park, the Horticulture or the Aberdeen Pavilion spaces)
No one could have predicted a global pandemic.
And so, here we are now, COVID hit every resident and business in this City. The pandemic has directly impacted everyone.
Lansdowne, as a sporting event facility, has not seen an event since March.
For this type of agreement, this is devastating.
So what now? It would be foolish for Council not to allow the extraction of a small amount of equity in the very complex financial structure to ensure survival. We are talking $4.7M –similar to what property owners do when considering leveraging a mortgage.
This amount and the financial flexibility allow for a safety-net during this most challenging period.
This decision protects the City – which, if it does not allow this to go through, could be left holding the whole bag.
The equity amount would allow to absorb the current period, while securing jobs and the viability of one of the City’s latest budding attraction.
PRE-COVID: Losing money
The current proposal makes sense. What other option does the City have to protect itself? However, I believe there is a more significant concern.
The question is, what of the financial viability of the agreement was at risk pre-COVID?
The private side, OSEG, spent way more money than anticipated to renew the facilities and expansion of the Lansdowne experience, to a total of $152M – $97M more than projected in 2012.
I do not know many businesses who stay in place for long if they don’t have a positive financial outlook: OSEG is losing money since it began operating in 2015. Its financial outlook was becoming favourable and the plan was to be out of the operating deficit in 2022.
Could the City sever the ownership at Lansdowne to protect public interest and ensure sustained investments by releasing the Stadium & arena while preserving the heritage buildings and the park? I think so.
If you see this merely from a black or white, I believe you miss the critical structural question City council must consider at this point:
Which elements at Lansdowne are of public interest?
Let me go out on a limb and attempt to define which elements are of value:
- The park (lawn, basketball, play structures, garden boxes and public spaces) and both public buildings (Horticulture & Aberdeen)
- The elements that are part of the agreement and should be left to the private sector are the commercial and residential buildings and the Stadium (including the arena)
Suppose the City was to negotiate a sale of the Stadium and rink to OSEG. In that case, the lifecycle cost of the agreement and flexibility for the private partner to restructure their business model could become interesting.
The biggest question is should a City be in the sports business? The answer is probably no.
The City should stop being in the business of holding on to facilities for professional sport only.
So the obvious answer for Council to find a new approach on how the Stadium and Arena relates to our public interest. Ultimately, keeping sport and community access alive, while ensuring renewal of the asset itself.
It is important to point out that OSEG has made no commitment to keep the sports teams beyond 2021. As part of any consideration, we must make sure OSEG reconfirms its intent to continue with sports past 2021.
A lot of details would need to be negotiated. Now more than ever, we need to create an agreement that allows protection of the public investment and the City spaces, all while allowing OSEG to re-tool their business plan to ensure long term viability of the stadium, arena, residential and commercial spaces. I believe that creating a working group of leaders and experts – this could be achieved.
Now let’s begin the conversation, who maintains ownership of the underground parking lot?
The P3 isn’t working for the private entity in the agreement; extending the contract will only leave the City arena and Stadium at the end of life (lifecycle), which resets the issues back to where we were in 2010. Why would OSEG entertain more capital investments in the Arena and Stadium without extended guarantees in current financial challenges. When the City did not have the millions available to invest in the Stadium, OSEG came along.
Ultimately, I believe, to meaningfully advance this issue, the City needs first and foremost to protect the public amenities. It must also retool and rethink of the best way to ensure reinvestments in the Stadium and Arena by releasing, or rather selling all but the commercial, residential, arena and stadium to OSEG.
I believe we can reset the course and bring what has long been promised and lost along the way – viability to Lansdowne. Following the P3 playbook will only set us up for expensive public investments or a drop off the agreement. It’s no time for a Hail Mary, there’s a short play we can do now to ensure we can be competitive and entertain with residents of Ottawa a Lansdowne for all.