In fact, there isn’t one.
After pouring in a massive $211 million from taxpayers to this project, shouldn’t the City of Ottawa and the residents of this community receive revenue for their investment?
Where does the money come from? The waterfall. The complicated waterfall. But after the confusion trying to understand the waterfall, the results of this game of feints and dodges is how much revenue do taxpayers get back for rebuilding the arena and stadium at Lansdowne or the enormous park?
How much? About $1.43 million in each of three years. Let’s say you put your $211 million out to work through lending at two per cent for one year. You get $4.2 million. Over three years the city has earned through the waterfall about $4.3 million. At two per cent on that money, the city would have received $12.6 million or roughly three times the money it has received from the waterfall.
And that’s no-risk money when you lend it out. Throw it into a bank and watch the compounding interest grow.
So at least over the first three years of Lansdowne, it has been a financial failure for the municipality.
But there’s more to it than that.
The city is renting out some of the most valuable property in Ottawa to its Lansdowne partner at a nominal fee for 30 years plus two 10-year options. Why didn’t the city just sell the land or rent it out at market rates? Hard to say. That’s a lot of lost taxpayer money.
But this is the capper. The Lansdowne deal actually doesn’t produce any revenue for the city. That trickle of waterfall money of which we speak goes to refurbishing city properties at Lansdowne. It doesn’t buy a lump or two of coal for the light-rail system or a couple of buckets of cement to fill sinkholes on the line.
So the city renovates a stadium primarily for the use of three Ottawa Sports and Entertainment Group teams or concerts and the like, yet derives but a trickle of cash that goes into maintaining the city property that the private sports group uses. Taxpayers, having footed the bill for the new stadium, then get the privilege of buying tickets to the facility they paid to create. What a deal.
And valuable city property rented for almost nothing? What a deal again. The city is not working with a charity at OSEG but instead with some of the richest people in town. And now we know the smarts they have to get that rich.
Credit where credit is due. OSEG sure saw the city coming from a long way off. One has to admire their ability to swing such a deal past city staff, former mayor Larry O’Brien, Mayor Jim Watson and city council.
But as for the municipality, its principals did not take good care of city assets and money.
OSEG most certainly won this deal. Taxpayers lost it.
A tour of Lansdowne from the air.
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