OSEG defends Lansdowne 2.0, as committee defers vote

Ottawa city councillors are no closer to providing a decision on a contentious $419-million deal to redevelop Lansdowne Park, ending two days of 10-hour discussions without a vote. 

More than 80 people gave delegations about their concerns or support for the project, which would see two residential towers erected next to a newly rebuilt north-side stands and an event centre added east of the stadium.

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The public-private partnership with Ottawa Sports and Entertainment Group (OSEG) has only ever operated at a loss.

But OSEG executives bristled at suggestions that it's been a failure.

"I kind of cringe a little bit every time I hear that the city has lost a lot of money," said Roger Greenberg, OSEG executive chairman. "Everything that the city put in, they're getting back."

Greenberg said the city did not get any profits from the complicated financial system known as the waterfall, but it gained by no longer having to foot the bill for its 60s-era infrastructure.

"The city is no worse off, in fact much better off, for at least having a new south-side stands and parking and has saved all that other money... I think it's been a tremendous success from the city's perspective. It hasn't been a great success from our perspective."

That relationship is at the heart of the new proposal, which staff prepared with an eye for evening out the risk between the partners and ensuring financial sustainability.

The deal on the table predicts a healthy return over the course of the decades-long agreement, but also a $5-million per year investment of tax dollars for debt servicing, along with hundreds of thousands of dollars pulled separately from parking reserves.

Week's break to allow for compromise

Councillors came into the meeting Thursday morning with a goal of hearing from the public, gaining insight from staff and then coming to an agreement on the best way forward.

But at around 2:30 p.m. Friday after the final delegation had logged off, Mayor Mark Sutcliffe proposed to shelve any decisions until next Friday's special council meeting.

Many feared their exhaustion might limit meaningful debate. They suggested a few days to digest the dozens of motions to adjust the deal could inspire behind-the-scenes collaboration.

But Coun. Shawn Menard, who represents the ward where Lansdowne Park is located, worried it may cut discussions short.

"Everyone will have ample time," assured Mayor Mark Sutcliffe, who said there will be the option to extend the council meeting to several days. "There'll be no effort to limit debate or discussion on this issue."

Councillors weigh options

The rest of the meeting saw councillors focus on some of the key sticking points of public delegations: fiscal priorities, transportation issues, the amount of on-site affordable housing and accessibility issues at the current facilities. 

College ward Coun. Laine Johnson asked several rounds of questions about the viability of the plan and risks for the city.

"We are stewards and we have a fiduciary responsibility to look at the risk to the City of Ottawa. That is why we are here today," she said.

Johnson expressed concerns about a key shift in the city's arrangements with OSEG.

Under the first redevelopment deal, OSEG was on the hook for cost overruns from construction — and ended up shelling out $160 million. In Lansdowne 2.0 that risk is transferred to the city.

"I spoke to OSEG about whether or not they'd like to have those cost overruns back," Johnson said. "They said no." 

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Some councillors, including Somerset's Ariel Troster, expressed discomfort with asking for any money from taxpayers for what can be described as a "want-to-have" rather than a "must-have."

"I just think it's quite immoral," said Troster, referring to residents who may never go to the site helping to pay for its rejuvenation rather than adding a heftier surcharge to ticket sales.

"What will the market bear? Well, the question is what should residents bear?"

Others struggled to understand complicated financial manoeuvres put forward.

That includes a plan to have a developer build the residential towers from the underground parking lots up, but agree to sell back the main-level retail — while still maintaining ownership of parts of the lobby, elevators, stairs and mechanical rooms.

Isabelle Jasmine, the city's deputy treasurer, later described that plan as the "simplified" version.

Menard said the day's revelations in no way reassured him of the deal's value.

"The large portion of debt that comes along with this in what we're facing right now as a city, is still is a huge concern," he said after the meeting. "And I think that will remain a concern for a number of councillors, regardless of the tweaks that might come through motions."

Motions could dramatically change deal

Yet, the motions up for discussion next Friday could change elements of the deal, resurrecting previously eliminated source elements and diverting more money from the sale of property rights to fund affordable housing projects.

Sean Moore, the city's director for the Lansdowne Park project, said the city had reasons for kiboshing the third residential tower — one of the motions that appears to have support from several councillors.

"Staff are not recommending it," he said.

Greenberg also had reservations with the flurry of proposed changes.

"With all due respect, it's not a question of one partner saying 'we're going to institute all these changes,'" Greenberg said. "There were a substantial number of concessions that we made to get to last year's report."

"We are pushed, in my view, very close to the line," he said.

Staff assured councillors at several points that whatever decisions are made next week, there will be opportunities to alter the agreement.

Sutcliffe told reporters this decision has been a "long time coming" and councillors cannot put it off any longer.

"Most of the people who want to see us pause are actually people who don't want to see this project go ahead. They're using the idea of pausing as a proxy for stopping it from happening," he said, adding that postponing the plan postpones new housing.

"I don't think that's wise."