The City of Ottawa in its negotiations with the Ottawa Senators has made a point of saying that the municipality will not subsidize professional sports in this community.
Fair enough … so why has the City of Ottawa been subsidizing professional sports in this community?
For the use of the city-owned Lansdowne Park arena and stadium the city, the revenue accrued by Fury, 67’s and Redblacks is part of the so-called waterfall of funds that goes to the municipality.
The waterfall to the city recently is a meagre $1.47 million annually. Included in that is a part of the revenue made by the above sports teams, if any. Lansdowne over the next 30 years is expected to make about $508 million. Of that the city is expected to receive about $33 million.
This after the city poured $211 million into refurbishing the stadium and arena plus rented very valuable land to Ottawa Sports and Entertainment Group on the site for a nominal fee. Revenue generated from the city waterfall goes back to refurbishing the city properties at Lansdowne like the arena and stadium.
So The Bulldog asked the city if the three sports teams pay rent. The answer from Geoff Cantello, senior legal counsel, is as follows:
“The question is not consistent with the business model that was followed for the revitalization of Lansdowne Park. The agreements between The Ottawa Sports Entertainment Group and the City are not based on simple lease arrangements. They are based on a closed financial system with distribution of Net Cash Flows to each partner based on a waterfall of priorities structure.”
So what I take from this is that revenue from the three sports teams is part of the $1.47 million a year the city receives from OSEG in the waterfall. In other words for all the money the municipality has put into Lansdowne, it would have garnered more revenue by putting that $211 million into a bank savings account.
So three sports teams which don’t pay rent due send some amount of $1.47 million paid to the city. What that is? Who knows but it’s probably a fraction of it.
So do the sports teams pay rent? No. They might, if they make a profit, or they might not. Such is the clarity of Lansdowne.
But no matter … the $1.47 million the city accrues annually from Lansdowne goes to refurbish city properties in the park. So the net gain for taxpayers on some of the most valuable land in Ottawa and paying $211 million to refurbish properties on the site is … nothing.
So do the Redblacks, Fury and 67’s pay rent to use city-owned facilities at Lansdowne?
In a word … no.
And so much for the argument that the city does not subsidize professional sport in this community.
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