Cullen Condemns Lansdowne In Letter To Mayor

04/26/2023

Former long-time Bay councillor Alex Cullen has written an open letter to Mayor Mark Sutcliffe concerning Lansdowne 2:

Dear Mayor Sutcliffe:

As you know, the City is continuing to pursue the Lansdowne 2.0 proposal to resuscitate the City/OSEG partnership. Tomorrow (Thursday April 27) at 6 pm is a City public information session on the project, starting at 6 pm via Zoom.

This is a major project. Attached you will find a front-page article from the April edition of The Mainstreeter (Old Ottawa East’s community newspaper) which provides a sober analysis of the Lansdowne 2.0 project that is well-worth reading. This is a project that would involve direct City spending of $332 million plus loan guarantees of close to $500 million – all to support a private for-profit sports venture (Ottawa Sports & Entertainment Group).

A FAILED OTTAWA: A Formula For Success Lost

In my view this is not good or appropriate use of taxpayers’ money.

And remember, the NHL is waiting in the wings regarding a new arena downtown for another private for-profit sports venture.

Alex Cullen

Mainstreeter article mentioned above and provided by Cullen:

Lansdowne 2.0
Whatever happened to the promise of public
consultation?
ALEXANDRA GRUCA-MACAULAY

A FAILED OTTAWA: The Forgotten Origins
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 “checkin” 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.”

City’s combined debt, OSEG guarantees under
Lansdowne scheme may near $500M

Six community groups ask Mayor Sutcliffe for meaningful consultations before any final

decisions are made

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’s 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