Latest Lansdowne plan repeats the errors of the past

Article content

As residents of Ottawa, we expect City Hall to spend our money wisely. We also expect City Hall to learn from its errors. Repeating the mistakes of the past, however, is exactly what our local government looks set to do.

With Lansdowne 2.0, it risks repeating three major financial mistakes.

The first mistake is to take a proponent’s rosy financial projections at face value.

Article content

A decade ago, the City of Ottawa entered a public-private partnership with the Ottawa Sports and Entertainment Group (OSEG) to redevelop Lansdowne, which included the promise that taxpayers would receive close to $100 million in profits. Those profits never materialized.

The city recently released the 2024 Lansdowne Annual Report, which showed another $9.2-million loss last fiscal year.

The Lansdowne 2.0 proposal promises more than $350 million in profits to taxpayers. Those largely come from Lansdowne producing $1 billion in retail leasing profits. For most of us, it is very hard to see Lansdowne as a billion-dollar retail site. The city’s own consultant, hired to perform due diligence on the Lansdowne financials, called those projections “optimistic.” That sounds like consultant-speak for highly unlikely to ever come true.

The second mistake is to assume that we can legally enforce the public interest after we have sold public land to private owners.

The city believes it can sell some of Exhibition Way, the main street through Lansdowne, to one property developer and reacquire that land once construction is complete. The city assures us it can buy back this land in the future by putting a covenant into the sale contract.

Article content

The people of Kanata know better than anyone how little protection covenants provide. In 1981, the municipal authority agreed for a parcel of land to be developed, but with a covenant in the agreement that 40 per cent be kept as “open space” forever. A recent Ontario Superior Court decision has ruled that covenant “inoperative,” paving the way for its current owner to develop the entire site.

The Kanata ruling should end any illusion that once the land is sold, the city is guaranteed to regain ownership or control of Exhibition Way. Plus, if the developer ran into serious financial trouble during the project, assets could be sold off to the highest bidder. Would we be ready to risk a section of Lansdowne Park being acquired by a private equity firm? Or a Russian oligarch? Or a Chinese state-owned enterprise?

The third mistake is to start with an artificially low budget, then design the project around that number.

A tale of two roofs

The city appears so determined that Lansdowne come in under its advertised $419-million price tag that it is cutting features back to the bone. The “green roof” on the new Event Centre has now become a roof that is painted green. The other roof — the one on the north-side stands that is so important to many RedBlacks fans — has been eliminated entirely from the design.

Article content

What’s even more concerning is whatever Lansdowne 2.0 functionality is being stripped out of the project to meet the $419-million cap, but which could be added in later as a new specification requiring additional funding. Taxpayers are fully on the hook for any Lansdowne cost overruns. Don’t be surprised to see all sorts of upgrades come out of the woodwork once the project has tjhe green light from city council.

This is former mayor Jim Watson’s 2010 “on time and on budget” promise for light rail all over again. The city achieved neither, and ultimately provided taxpayers with a stripped-down and significantly compromised transit system. Locking in a budget number too early, and setting it at an unrealistically low level, ultimately cost us much more than if this had been properly budgeted from the outset.

Some city councillors have done their best to raise concerns about the Lansdowne financials. But most of council has turned a blind eye to the flaws in the proposal. It is falling on ordinary residents to give voice to these concerns. Everyday citizens have become the last line of defence in protecting the city’s finances against a council willing to repeat the mistakes of the past.

Article content

I’ve argued elsewhere that renovating Lansdowne will be the equivalent of a one-per centage point property tax increase for all of us, at least for the next couple of decades. Let your councillor know if you think the residents of Ottawa deserve better. It’s people like you speaking up who will save this city from repeating the costly mistakes of the past.

Neil Saravanamuttoo is a director of CitySHAPES, the author of the 613 on Substack and the former chief economist of the G20’s Global Infrastructure Hub. His analysis of the Lansdowne financials, along with a petition calling for a referendum on whether the City proceeds with this project, can be found at BetterOttawa.ca.

Article content