$419M cost, $300M in new taxpayer debt
By Carolyn Mackenzie
Mayor Mark Sutcliffe, like his predecessor Jim Watson, is eager to highlight successes at Lansdowne. He’s right that Ottawa residents have enjoyed great events and enjoyable moments – at least those who managed to get there despite the transportation challenges.
However, is this enough to ask taxpayers to inject another $419 million into Lansdowne and take on another $300 million in new debt? Are the benefits of Lansdowne 2.0 enough to outweigh these considerable costs?
To be clear, Lansdowne 2.0 is not on the table because Lansdowne 1.0 has been a great success; quite the opposite, the first go was a financial failure, losing about $10 million every year.
On the Friday afternoon before Thanksgiving weekend, the City released a staff report of over 200 pages, making some changes to the proposal and recommending approval.
In the updated proposal, the City abandoned its long-held assertion that this project will be “revenue-neutral.” So, what will City Council decide next, given the conditional approval in principle last June was contingent on the project being free? Unfortunately, the City has indicated no plans for public consultations or avenues for clarifications before Council’s decision.
Here are the key elements of the proposal:
- two high-rise towers of 40 and 25 storeys. A third tower has been removed.
- 10 per cent of units will no longer be affordable housing; instead, the City will get a $3.9-million contribution to build affordable housing elsewhere.
- $145 million for new north-side stands, with no roof.
- $210 million for a new 5,500-seat arena which will displace the berm/toboggan hill and part of the Great Lawn.
- Adding about half the public space lost to the arena where the third tower was to go.
- 50,000 sq. ft. of new retail space rather than 100,000 proposed earlier.
The proposal does not include new transportation solutions, even though trouble getting to and from Lansdowne has been a significant barrier to its financial success. There is little mention of the expected seven-plus years of major construction on the site.
On social media, some supporters of the project blamed the removal of one tower and downsizing of another to 25 storeys on pressure on the City from NIMBYs (Not In My Back Yard) in the Glebe who oppose so much new development. The Glebe Community Association recognizes there is a housing crisis and supports the City’s housing objectives, including affordable housing and the addition of some residential additions at Lansdowne. But it has also expressed concerns about overcrowding and reduction of greenspace which could make Lansdowne less appealing to the visitors whose spending is needed to make it a financial success. Those concerns are not unique to the Glebe; they were expressed even more strongly by the City’s Urban Design Review Panel (UDRP) in July. It recommended getting rid of one tower and scaling back another. However, the staff report did not mention the UDRP recommendations, allowing some to conclude the decision was driven more by local opposition than by the City’s own expert panel. That silence is not helpful to informed discussion given the significance of this change to the plan.
Taxpayers could bear the burden of hundreds of millions in new debt if this new plan fails. It will cost an estimated $16.4 million annually to pay interest on that debt for the next 40 years. The staff report also acknowledges the City is likely to encounter timing issues in getting its share of cash flows from the so-called “waterfall,” the proceeds from its partnership with OSEG. This is because significant returns aren’t expected until the latter half of the next 40 years. This mirrors the situation with the initial Lansdowne redevelopment. So, the big question: How will the City manage the financial burden over the next 20 years, especially with so many other budgetary pressures?
In a report to City Council last May, staff suggested, “The risk of revenue neutrality being impacted is very low, as long as the business plan and funding strategy as proposed in this report are implemented.” Isn’t that like saying, “Everything will go as planned, as long as everything goes as planned”? It is crucial that we demand more critical analysis and a more credible solution that strikes the right balance between updating Lansdowne’s sports facilities and addressing other pressing needs in Ottawa. We need a plan that continues to offer fun and enjoyment while remaining financially sustainable.
The City’s Planning and Finance Committees will vote on this plan on November 2, with full Council expected to hold a final vote on November 10. I urge you to reach out to Mayor Sutcliffe and Councillor Shawn Menard immediately and encourage residents from other parts of the city to contact the mayor and their own councillor. We are all taxpayers, and it is our money. Let us insist on having a say in how it is spent.
Carolyn Mackenzie chairs the Glebe Community Association planning committee.