City, OSEG at odds over added Lansdowne costs
$17 million in repairs to corroded steel beams needed to be done, OSEG says
Unexpected repairs to the roof of the Ottawa Civic Centre have raised the cost of the renovation of Lansdowne Park by $17 million, and the city and its private partner are at odds over who should pay for the fix.
Ottawa Sports and Entertainment Group has been working to renovate the civic centre alongside the football stadium at Lansdowne when workers discovered corroded steel beams on the Civic Centre. The more work done on the arena, the more corrosion the workers found, said Roger Greenberg, one of the partners at OSEG.
"Initially we actually thought it was a very small issue... it's just been growing. Completely unexpected," said Greenberg.
With looming deadlines to get the stadium and civic centre ready for 2014 - the CFL's RedBlacks play their inaugural season this year - OSEG has gone ahead and is making repairs.
But Greenberg said who ultimately covers the extra $17 million in costs would need to be resolved.
"We'll be having discussions with the city in the new year, as to who ultimately is responsible for the payment of those costs," he said.
City says OSEG should cover costs
The city, however, said OSEG would cover the costs, according to a statement from Marco Manconi, the city's manager of design and construction at Lansdowne.
"It is the City’s view that, with regard to the funding of these unexpected costs, the provisions of the Lansdowne Redevelopment Plan Project Agreement related to the City’s guaranteed maximum price require OSEG to pay for the costs of the work that are in excess of the project contingency that is contained within the Guaranteed Maximum Price," Manconi wrote in a statement.
As part of the Lansdowne deal, the extra costs would add to OSEG's minimum equity, giving them a potential greater share of future earnings from Lansdowne.
Councillor Bob Monette said city council was assured this exact scenario wouldn't happen.
"A lot of us asked, are there going to be any other costs down the road, and they everybody said no. So I don't think taxpayers should be on the hook for the full amount, that's for sure," said Monette.
Greenberg said if his company and the city can't come to an agreement, they would go to an arbitrator.
But the cost overrun won't delay the opening of Lansdowne next year.