The Auditor General Must Probe Lansdowne, Now

So let’s see what taxpayers get from Lansdowne 2.0.

More of Lansdowne 1.0.

Looking at this project, there is no way the City of Ottawa and its taxpayers can even remotely get their money back in reasonable time from this highly questionable project.

This deal does not work for taxpayers but it most certainly works for Ottawa Sports and Entertainment Group. So why is Mayor Mark Sutcliffe doing this? He shouldn’t and our councillors are in over their heads listening to the slick sales pitches from OSEG and the fawning, lame arguments of city staff. If they buy this pig-in-a-poke, staff is a pathetic embarrassment to the City of Ottawa.

LANSDOWNE: An Important Open Letter To The Mayor

Of course in the aftermath of the fiasco that is light rail outlined in the provincial inquiry on LRT, it’s hard to imagine how much more pathetic staff could get. But maybe Lansdowne 2.0 will be a new vista in pathetic.

You can drive a fleet of Mack trucks through the holes in this fiscal slice of Swiss cheese.

So let’s make this easy. What’s in it for taxpayers? Nothing. Less than nothing. We’re in negative territory here, folks. We’re losing part of a park for the arena. What’s in it for OSEG? Everything.

Does that cover it?

Let’s see …

1.OSEG or its parent companies get the pecuniary benefits from the real estate. Hard to say how much money comes from the real estate, but developers don’t build these things to lose money;

2. Commercial … does that revenue cascade into Waterfall 2.0? Remember, Waterfall 1.0 topped out revenue to the city at $1 million. But even that money went into a fund to repair the city buildings. Except that accumulated money was transferred over to OSEG because the pandemic was difficult for that consortium. That was done by our elected representatives. Thank goodness the pandemic wasn’t difficult for the rest of us or imagine the amount of money that would have had to be paid out to residents. Taxpayers turned over $4.5 million to a private entity.

3. Rent. Shouldn’t OSEG be paying rent because its teams play at a city facility? I called the city one time to ask how much the professional teams were paying in rent. The media relations department said it was very complicated (in other words, the media relations department didn’t understand it). But they added it comes from the waterfall. Waterfall, that’s a curious term. Well the city didn’t make any money from the so-called waterfall because it turned over $4.5 million which was to go into a repair fund to OSEG. So … how much money is OSEG paying in rent for its three somewhat professional teams? Nothing. Now you’d say that’s not much and a pretty poor return. Except it gets worse. OSEG operates the stadiums, holds events there and that money goes into the waterfall. How much money does the city get from the waterfall? Nothing.

4. Rebuilding the stadium. When all is said and done, the city will be pour close to half a billion dollars into Lansdowne as a whole. For that investment, Ottawa taxpayers get nothing. The three semi-professional sports teams get places to play and real estate, presumably, makes money for the private consortium.

5. Revenue from the real estate. OSEG and the developers keep that.

6. The proponents for Lansdowne say the huge residential on the site will yield property taxes that will pay for the stadium in 40 years. Someone building one of the many towers in the demolition of Westboro sends that same property-tax money to the city and it is not earmarked for a half-billion dollar Lansdowne development that yields no revenue for the city. The Westboro property taxes go to infrastructure and services. The Lansdowne residential property taxes go to paying off a stadium in 40 years which will need to be replaced at the end of that term. And the teams that play in the arena and stadium pay money into the mysterious dried up waterfall or, in other words, nothing.

7. The long-term future of the Canadian Football League? Not good. First, it’s minor-league football. This is not and never will be the National Football League in which Ottawans are very interested. The league has had difficulties with franchises in Vancouver, Montreal, Toronto, Hamilton and, most famous of all, Ottawa. Previous owners of the Ottawa football franchise did a study of the long-term prospects for a successful team here, got the results and folded the team. How long will it be before OSEG says it can’t afford to run the Redblacks? What if OSEG can’t produce a winning Redblacks team? We’ve already seen with the Senators that a poor club has difficulty drawing fans. No fans in the CFL means no team. And if there is no team, why are we doing all this?

Auditor Should Probe Lansdowne Analysis: BENN

8. The green roof to the proposed arena. Green it might be (the arena takes more park space however) but the previous rebuild of the arena was done, in part, because the roof leaked. When the Ottawa 67’s played their first home game there post-roof-repair, the roof leaked. Hundreds of millions of dollars spent at Lansdowne and OSEG and the city can’t fix a simple roof. You can do that with your home. Now the arena has a green roof which is more complicated than a conventional roof. How much do you want to bet the green roof leaks? And there’s no public access to the green roof so it’s just green and that’s all.

9. The arena will be built near the water table. The Lansdowne is not especially stable. Prior to Colonel By showing up and building his canal, that area was a swamp. Furthermore, building underground is not easy. Building underground on unstable land is all the much harder. If you’d like a second opinion on this, check out the light-rail tunnel. It wasn’t supposed to leak either.

10. The city’s history with big projects. Not good. Notwithstanding the LRT, the Hurdman bridge, the Vimy Memorial Bridge and the pedestrian bridge over the Airport Parkway had serious hurdles to overcome. The new central library is massively over budget.

11. The lack of mass transit to the site. No, we’re not building the Bank Street subway. Furthermore, parking at Lansdowne is a nightmare as is traffic on Bank Street.

12. Air rights. The new waterfall. Expect media relations to respond to questions on it with “it’s very complicated.” If it’s very complicated and people can’t give you an explanation, don’t do it.

13. The city says it will raise revenue for a half-billion dollar project through a ticket surcharge. The Ottawa Senators exacted a surcharge on fans because the Ontario government would not pay for an interchange to the arena on Highway 417. The interchange cost $27 million, not a half-billion dollars like at Lansdowne. The Senators, after many years of surcharges, were not able to pay for the interchange. Eventually the Ontario government picked up the cost of the interchange on its provincial highway. Why is city staff floating this punctured balloon that a surcharge can help pay for this? It cannot remotely cover but the smallest part of the cost. Why is the City of Ottawa misleading its taxpayers? Why?

Here’s another why. So why are we building this? Lansdowne 1.0 was an absolute mess. Lansdowne 2.0 looks like Lansdowne 1.0 … that is, a mess as well.

Why are taxpayers subsidizing a real estate deal dressed up as a shopping centre, stadium and arena?

There’s no pecuniary upside for this deal for taxpayers. It’s time for the auditor general to get involved.

Ken Gray

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