OTTAWA’S PUBLIC SQUARE
Lansdowne Park is often referred to as Ottawa’s Crown Jewel. And for good reason - In 1847, the then Bytown was deeded 24.5 acres by the government of the ‘Province of Canada’. Lansdowne would host exhibitions, welcome troops in the historic Aberdeen Pavilion, regularly showcase its rural roots as a fairground and has been owned by the people of Ottawa for over a century and a half. This history, and our own experiences attending Lansdowne Park, is where inspiration is drawn and why we fight for Lansdowne Park. It is a simple matter- This public space deserves the best of us. It represents us as a city.
In recent history, we have witnessed successive planning exercises that have allowed sole-sourced unsolicited concept plans from one private entity to consume city hall bureaucracy and deepen its grip over this historic place.
Lansdowne 2.0 is a highly unpopular plan that will tear out useful and valuable assets, and includes a financial strategy which will shift more risk onto the city, add significantly more long-term debt while relying on highly uncertain cashflows to service that debt, and ignores reasonable alternatives that would cost far less.
WHY IS THIS HAPPENING?
For the public to truly understand why this occurring so soon after the last redevelopment they must read these reports with the following lens:
- The City’s made significant expenditure of about $210 million on Lansdowne 1.0, and has a current balance of roughly $100M in debt. Under Lansdowne 2.0, the City will spend another $418.8 million plus $19.2 million for a developer parking lot for residential towers — totaling $648 million in public spending. That number does not include the $44 million for a retail podium and is likely to increase. The Ottawa Sports and Entertainment Group (OSEG) has equity in the deal mostly made up from construction cost overruns during Lansdowne 1.0 which they managed, and covering cash flow losses (for which they currently earn 8% interest) – for a business model that OSEG proposed to the city and has been responsible for operating.
- OSEG has a P3 contract with the city where they are responsible for maintenance of the civic centre arena and the north side stands, amongst other facilities. It is their responsibility to address and prevent issues, paid for through revenues to the partnership (ie: any issues with vendors citing bathroom repairs or water infiltration maintenance is the responsibility of OSEG).
- The city has signed a long-term P3 deal (and extended it) with OSEG that lasts to 2054 (now recommended to increase to 2075) and which has retail extension options past the year 2100. When the city signed this deal they never anticipated nor did they advocate for the demolition of the North side stands and historic Civic Centre. In fact those facilities are in good condition and the city invested a lot of money to ensure those assets would remain structurally sound until 2054 and beyond (understanding they would not function as well as a brand-new facility, quite obviously).
- As part of the original deal signed by OSEG, they paid rent at $1 a year to use all the entertainment and sporting facilities and fund any cash flow deficits at the end of the year. The cash flow deficits, especially in the early start up years where they have had to contribute more than anticipated, have worked out to more than anticipated for OSEG.
- From 2019 to today it appears that OSEG has actually contributed very little if anything to cover the cash flow deficits, and instead the city has been floating new loans, and backing the increase of existing loans, and allowing access to the maintenance reserve fund to float OSEG operations and ensure that OSEG doesn’t have to put in any more cash flow deficit funds. A critical departure from the original existing agreement where OSEG agreed to cover losses.
- Now it appears that despite the city making these concessions, OSEG has threatened to walk away from the deal and default. If they did this, they would not recoup any of their equity. If there were any deficits left at the end of the deal, the city would not be responsible for paying these, as this is part of the original agreement that was signed.
- OSEG was in a tough spot as a result and crafted another unsolicited proposal to the city to tear down the higher maintenance buildings (and some brand new retail), the city would take on a lot more debt and risk, but it would keep the partnership alive – critical for all the political promises made from 2012 to today. Hence – Lansdowne 2.0
- The city started negotiating with OSEG without a back-up plan in the event of OSEG leaving and, in fact, has spoken against creating a back-up plan (and council voted 12-11 against creating a back-up plan). Having a “Plan B” is fundamental to any negotiation. But so intertwined have they become with the P3 deal, that they could not imagine working with another partner or not-for-profit organization, or have in-house operation of Lansdowne Park. The city has right of first refusal on the Redblacks and 67’s to ensure the teams stay and, in fact, stands to benefit substantially through more independence and untangling itself from this long-term financially and legally risky deal.
LANSDOWNE 2.0 IS NOT SUPPORTED BY THE PUBLIC
In every region tested in the city, people are majority opposed to Lansdowne 2.0 when they discover what the city is planning.
Its no wonder that is the case, as the plan itself will result in a worse experience for park goers, sports fans and families with kids:
- It will have no roof over the north side stands
- It will remove 58,000 square feet of greenspace from the park / great lawn
- It will reduce seating in the arena (to just 5850) and the stands (by 3000 seats)
- It will increase ticket prices with the focus shifting towards high end less affordable options for families
- It will spend $8 million just to remove the green berm/hill where people peruse games from afar, remove half the height of the toboggan hill and 113 healthy trees as well as potentially scrap the Moving Surfaces artwork by Jill Anholt.
- It will tear out brand new valuable small business retail just built in 2014 in the ‘J-Block’ (including Goodlife, Beandigen café, cigar man, cinnaholic, etc) and instead pay $39 million to build nearly identical square footage retail it already owns. This may also mean GoodLife moves to the Horticulture Building with OSEG running the building instead of the parks department, which would displace many events which bring in $300,000 in revenue annually.
- It will mean 9-10 years of heavy truck construction to 2035 in a highly pedestrianized area, and the shut down of the great lawn for at least 2 years.
- It will strand the 2014 public investment of renovations including into the Civic Centre Arena and north side stands, and the city invested $23 million into the steel roof and other deficiencies. If the buildings were to be torn down the city would still need to continue paying down that roof loan, which has about $15 million remaining.
- The city would forego mandatory parkland funding normally paid for most other developments in the city, costing the city $4 million (we would lose greenspace and not recoup any funds because of the structure of the deal).
- The city would waste $10 million in leasehold payments to OSEG for the stands being lower capacity as a result of construction disruption. The city would also pay at least $1 million for temporary stands instead of the private partner.
- It will include no improvements to transportation to the site for urban, suburban or rural areas
NEW FINANCIAL FIGURES – COSTS AND DEBT HAVE GONE UP FOR LANSDOWNE 2.0 IN LATEST REPORT
It is doubtful the financial figures will be presented in this manner in the report so we are providing this for an apples-to-apples comparison between November 2023 to October 2025 estimates. Costs and debt have gone up, not down.
November 2023 City Cost Exposure:
Main Project $419.1M
Parking $18.6M
Total Project Cost 2023 $437.7M
Retail podium
loan (city guarantee) $34.7M
Overall cost exposure $472.4M ($331 million in new city debt)
Oct. 2025 City Cost Exposure:
Main Project $418.8M
Parking $19.22M
Subtotal 2025 $438.02M
Retail podium
Construction (direct cost) $6.7M
Total Project cost $444.72M
Retail Podium
Loan (city guarantee) $39.2M
Overall cost Exposure $483.92 ($340.2 million in new city debt)
The argument has been made that Lansdowne somehow inexplicably will only cost 1/3rd of its price tag. But this is a fundamentally flawed position for the following reasons:
- City property tax received from on-site buildings is not ‘free’. It is property tax money that would otherwise go to all services city wide. Contrary to what proponents of Lansdowne 2.0 say, the units would in fact develop over time in the area. 500 to 770 units are not being filled by brand new residents to Ottawa. It’s also not “new” or “extra” to what the city would receive. Building towers at Lansdowne doesn’t add to the total number of towers in the city and thus, property tax base —it just shifts where they get built. Developers already own land across Ottawa with city approvals for literally 1000’s of units in place, but they don’t build everywhere at once because of a number of factors like financing limits and market demand. So towers at Lansdowne doesn’t mean the city gets two extra towers and extra tax revenue. It just means those towers got built at Lansdowne instead of somewhere else (where the taxes would go to all city services instead of Lansdowne 2.0).
- The sale of public space/air rights is not ‘free money’, it is selling a city asset in a public park that could be spent on a variety of priorities such as paying down long term debt, transit, homelessness and community centres. Instead most of it is being spent on Lansdowne 2.0 (including some that is proposed to be diverted to parking and retail instead of affordable housing as directed by council).
- The risky reliance of cash flow from waterfall payments is in no way guaranteed, and has been identified as a top risk. Original waterfall amounts never materialized under Lansdowne 1.0 for the city despite assurances they would. Under the city’s own projections, these are accrue in much later years after 2050 (back end loaded), adding further risk to this uncertain return.
THE COST OF DOING NOTHING – DISINGENUOUS AND GLARING OMISSIONS
Much has been made by various actors indicating that the cost of doing nothing is higher than the multi-hundreds of millions about to be expended. Here is what is being relied upon to make that argument.
A November 2020 city report suggests a possible cost range of $118 million to $407 million over 40 years in a worst-case scenario with no operator and limited activities on site. Not often disclosed by the actors making this argument is the key assumption that underlies this range estimate: “depending on the length of time the impacts of the pandemic are experienced,”. When challenged on this as being unrealistic, new figures were created by staff to help justify that the cost of doing nothing is somehow inexplicably higher than the $437 million price tag for Lansdowne 2.0.
- The initial assessment assumed $4.5 million to $12.5 million/year of city spend to fully operate Lansdowne with the following assumptions:
- This was calculated with pandemic level attendance figures
- Nearly all activities on site are assumed halted
- OSEG defaults and leaves the deal with the city doing nothing to find a not-for profit or other entity to run the site.
- When pressed for a more detailed and reasonable approach, staff resorted to the following: $8.5M a year city spend based on cash flow deficits over the first 12 years of Lansdowne P3 operations and dividing by 10.
- This includes the exceptionally costly initial start-up years (ie: $37 million deficit in year one) that are irrelevant to any estimate going forward.
- Finally, in this report, it appears finance staff are taking only the last 5 years of operations (including the pandemic) and extrapolating to say about $8 million in annual cost for the city.
- This is a total disconnect from the independent analysis provided by EY in its 2023 Due Diligence Report that shows Lansdowne 1.0 being essentially cash flow neutral from 2025-2030 and cash flow positive as of 2030 and beyond.
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- EY’s graphic below (annotated with red and blue text for emphasis) clearly depicts this.
Graphic Source: Ernst & Young Lansdowne 2.0 Financial Due Diligence City of Ottawa Reliance Restricted report, September 13 2023, p. 89
As EY reported:
“Under this scenario, annual cash flows become positive for a short period in 2015 and 2027 and then starting again in 2030.”
If the city is to use a simplistic and unrealistic approach to evaluating the cost of doing nothing with it being their main talking point, why would they at least not base it on EY’s actual forecasts? These forecasts show that “doing nothing” comes with positive cash flows ahead, and having avoided a $437M spend.
ARE THE NORTH SIDE STANDS AND CIVIC CENTRE BUILDINGS “END OF LIFE”?
The proponents of Lansdowne 2.0 have vested interest in communicating as negative a story as possible on the state of North Side Stands, the Civic Centre, the new small business Retail built in 2014 and the public grass berm (which OSEG terms Cheapskate Hill).
To do so, they mostly rely on one engineering report that called the buildings ‘functionally obsolete’. Meaning that the civic centre doesn’t function as well as other sports facilities. Now staff are inexplicably saying this ‘function’ is only acceptable until 2037.
Engineering reports, auditor general reports and city staff reports have all contradicted the claim that the north side stands and the arena are ‘end of life’, and indeed show significant investment into the north side stands, brand new roof repairs, arena, brand new retail (all set to be torn down) and other measures consistent with the long-term operation of the existing facilities:
2007-2009 Assessment of North Side Stands/Civic Centre – Structurally Adequate and Good Condition
“The North Side stands/Civic Centre were the subject of extensive building and structural condition assessments from 2007-2009, during the initial period of the Lansdowne Park redevelopment discussions. The City commissioned Adjelian, Allen, Rubeli Limited (AARL) to complete a structural adequacy report for the North Side stands/Civic Centre complex in 2007. This report recommended additional investigation for specific structural elements. Fourteen engineering reviews were completed by AARL on behalf of the City from 2007 to 2010. The summary of condition showed the Civic Centre complex and North Stadium Structure to be in generally good condition. The Arena complex was deemed to be structurally adequate and capable of supporting anticipated loads. Reports prepared for OSEG by Morrison Hershfield at the time of the Agreement reached similar conclusions.”
Auditor General—Audit of Lansdowne Accounting/Waterfall November 2020
“When the Lansdowne 1.0 reconstruction was finished in Q3 2014 the city valued the stadium/arena post-renovation at $134,264,049 with a 60-year lifespan to 2074.”
2015 Loan to fix steel roof repairs
$23.5 million was spent with a city of Ottawa backed loan to permanently fix corroded steel in the former Ottawa Civic Centre when it was redeveloping TD Place at Lansdowne. About $15 million of this loan remains and would remain on the book to pay off if the buildings are torn down.
2019 TD Place Functional Obsolescence Report by ROSSETTI
“The renovations to the Stadium North stands and Arena, started in 2012, addressed many of the essential “physical life” cycle needs…”
2019 Morrison Hershfield Report – Building Condition Assessment and 35-year Capital Repair and Replacement Report TD Place – Lansdowne Park
“September 30, 2019 - Morrison Hershfield Limited was retained by Ottawa Sports and Entertainment Group (OSEG) to review and assess the current conditions of the existing components to create a 35-year capital repair and replacement plan until 2054 (40-year plan from the 2014 date of construction). The Capital Repair and Replacement Plan includes a five-year plan and a 35-year plan. The plan is based on the continuation of the current use of the building for the time period. The plan assumes that the building will continue to be used as an arena and stadium beyond the 35-year timeframe of this report (e.g., the plan does not assume demolition of the facility...).”
2020 Action Plan: Morrison Hershfield Report – Updated TD Place Capital Plan
- Some expenditures between 2044 and 2054 year were deleted with the expectation that increased maintenance could achieve a longer service life of existing components. Individual components can be replaced upon failure as needed under the operating budget.
- Some expenditures between 2039 and 2049 year were adjusted to account for capital repairs including repairs, rebuilding (e.g. pumps), partial replacements (e.g. ceiling tiles), and rehabilitation of systems (e.g. heat exchangers) to achieve a longer service life of existing components.
- For the TPO membrane roofs, the second scheduled replacement in years 2041 (arena and north stands) and 2044 (south stands) was removed. It is assumed that a more durable roofing membrane (e.g. modified bitumen) with a longer typical service life will be installed at the first scheduled replacement.
“Current estimates from Morrison Hershfield based on a 40-year capital repair and replacement plan for the facility and to keep the old building operational and demolish it at the end, would require an investment in the order of $40 million.” ($1 million/year) - City of Ottawa’s Next Steps report.
2022 April 26, 2022 “Lansdowne Partnership Sustainability Plan and Implementation Report”
“The facilities, built in 1967, remain structurally sound, however even with an annual maintenance budget of over $1 million, the facilities remain below current (2022) building standards.”
A point that is important to remember in all of this is that there are brand new south side stands and brand-new retail and brand-new greenspace complementing the older structurally sound facilities. We have a mix of both new and historic in Ottawa at Lansdowne. It is outlandish that the city is tearing down its useful and valuable facilities in order to ensure OSEG is financially benefitted for a deal that they signed and now want to break.
GREATEST RISKS IDENTIFIED ARE COMING TO FRUITION
EY was wisely engaged to produce an independent report including the risks the city faces with this deal. Nearly all of those risks have come to fruition. This is early enough that the city can recognize these high risks, mitigate these risks by saying no and ensure due diligence in the expenditure of public funds.
“The greatest risk comes from waterfall distributions that are not guaranteed” (source: -Page 124 of October 2023 City Staff Lansdowne 2.0 Report).
This included:
- Stabilized growth rate of operating expenses and revenues
- Number of new events
- Sponsorship and naming rights
- Average mortgage interest rate
“Based on the foregoing, there are a number of factors that elevate the overall risk profile of the Lansdowne 2.0 redevelopment project above other competing projects of similar scale.” (Source: Ernst & Young Lansdowne 2.0 Financial Due Diligence City of Ottawa Reliance Restricted Report, September 13 2023, p. 87.)
EY flagged many risks – indicating that Lansdowne 2.0 is more uncertain than similar projects of its kind.
- Warning of an overly long 40-year projection period (confirmed): Inherently risky, and EY warned that its economic model may not accurately reflect what will happen over such a long time.
- Sports Risk (confirmed): Revenues are tied to team performance – Redblacks have below-average attendance, and north side stands without a roof won’t help this.
- Competition from a new sports and entertainment district (confirmed): A Senators arena downtown (and now Live Nation’s new 2,000-seat venue) both now confirmed, served by the LRT, pose major competition.
- Ticket Surcharge Risks (confirmed): The city assumes it will recover significant costs through ticket surcharges. But EY says the city takes on all the risk, with no control over ticket sales or pricing. Only $300K is guaranteed in the first 10 years, although $700K is included in debt service plan.
- No Opportunity Cost Analysis (confirmed): No analysis was done to weigh this $437 million investment against other city priorities or options served by the LRT.
- OSEG Track Record (confirmed): OSEG have failed to meet their own projections to date, incurring initial cost overruns, and steady operating losses. The City hasn’t disclosed EY recommendations rejected by OSEG that impact financials.
WHAT IS THE ALTERNATIVE
OSEG, as party to the partnership agreements, currently is legally obligated to operate, manage and administer those sections of Lansdowne Park that are governed by the Master Limited Partnership Agreement, Project Agreement, Retail Lease, Stadium Lease and other material agreements. While OSEG has asked the city to accept its unsolicited proposal, if the proposal is not approved, the “no” vote would not release OSEG from performing these legal obligations.
In 2020, city council provided further substantial benefits to OSEG, and OSEG agreed to ensure that the sports teams would continue to play at Lansdowne for 18 years from the lease commencement date of 2014 – to 2032, just 7 years away.
A “no” vote would simply reject the unpopular Lansdowne 2.0 proposal as presented. It would not be a vote to end the partnership. OSEG would remain bound to its partnership obligations.
Should they choose to default for convenience, the city would not need to pay anything to OSEG nor any equity accrued, and the city would have right-of-first refusal for the teams. The City would also receive all of the retail component rent revenue streams that are being generated now (where Whole Foods, Cineplex, and Sporting Life are the anchor tenants). This is in fact the most financially beneficial scenario to the city.
Focus on Inexpensive Improvements
The city should:
- Improve transportation to and from the site for rural, suburban and urban area with modest investment in shuttle service for more events, increase park and ride and dedicated transit access for events, and ensure connectivity with the canal (Transportation Appendix 12 of 2023 report -point 6 – “TDM plan for special events under Lansdowne 2.0 will be largely the same as the current TDM program”)
- Focus on 9-5 programming and dead zone improvement at Lansdowne Park with work hubs, further animation of Aberdeen Square, expansion of 613flea and farmers market, community hub services in Horticulture Building and Aberdeen Pavillion and winter activities for families.
- Improve accessibility both inside the sporting facilities and outside gated ticketed access areas including conversion to accessible on street parking, new ground way finding, accessible seat conversions and bathroom accessibility renovations.
- Keep the loved facilities we have – the roof over the north side stands, the new small business retail, the berm and trees on site, the great lawn square footage, the historic civic centre capacity and invest in maintenance of these facilities for another 30-40 years.
- Immediately assess management performance, with on-site hands-on expertise including where savings could be achieved in operations and investigation into various legal disputes and their impact of fees on financials and the non-arm’s length deals that may be adding cost to operations.
- Allow OSEG to continue operating the teams on site if they wish and rent the sporting facilities at market rates.
- Give consideration to a renewed business model that would involve an expert Board providing management oversight to Lansdowne Park as a whole. Sports teams, facility and retail leasing operations should be contracted directly and transparently, in the process of facilitating improved oversight by Council.
- The city’s commissioned engineering reports noted that the north stands and arena, currently valued at roughly $100M, can be maintained for another 40 years for $1 million a year. Far less than the expensive and risky proposal in front of Council.
CONCLUSION
Lansdowne 2.0’s financial plan will shift more risk onto the City, add significantly more long-term debt while relying on uncertain cashflows, and ignore reasonable alternatives that could cost far less.
There is no stadium emergency.
It's hard to rationalize a $483.92 million investment at Lansdowne with $340.2 million in new debt when Ottawa has:
- A $10.8 billion infrastructure deficit to support essential city services,
- A housing crisis, with record high rates of homelessness,
- A $120 million transit budget deficit,
- Community facility centre repair and replacement deficits it can not fund
For a city that claims it is financially strapped, Lansdowne 2.0 just doesn’t make sense.