Monday, January 24, 2011
Another week, another scathing review of the Lansdowne deal. This one courtesy of Rosen & Associates, which bills itself as "the premier independent litigation and investigative accounting firm in Canada."
Rosen & Associates prepared the 37-page report for Friends of Lansdowne Park and the two individuals fighting the redevelopment plan in court. It's a response to material filed by the City and OSEG, which has intervenor status in the case. The firm's findings are a startling check on the claim that we'll break even on the Lansdowne deal.
The report points out the overlooked fact that the city has no obvious plan to set aside property tax from the redevelopment to finance its project-related debt. As far as the Rosen & Associates (and anyone elses who's analyzed the plan) can figure out, tax revenue derived from a redeveloped Lansdowne Park will end up in the general pool, and Lansdowne debt will be serviced from the same pool of money. It is therefore "misleading," concludes the firm, to claim the redevelopment will pay for itself. Rosen & Associates says removing tax revenue from the equation will in fact result in a deficit of between $111-million and $208-million. That's a long way from revenue neutrality. That claim, says Rosen, tends to "grossly overstate the city's probable financial benefit" from the plan. Furthermore, the financial terms "raise serious financial concerns," and "an analysis of the overall project cash flow clearly shows an imbalance of risks and benefits." An imbalance that favours OSEG every time.
There's a body of evidence piling up here. Add this report to last week's affidavit by municipal tax expert Harry Kitchen and various submissions from lawyer Steven Shrybman and other experts, and there should be enough to cast doubt in the mind of even the most ardent Lansdowne booster. But will it? Earlier today city councillors Rick Chiarelli and Rainer Bloess dismissed the Rosen report without having read it. Supporters have so far gotten a lot of mileage out of dismissing opponents as spoiled Glebites and anti-development NIMBY's. Carleton business prof (and Friends of Lansdowne ally) Ian Lee says the city can still move ahead with the Lansdowne plan, but it can no longer pretend it's a good deal for taxpayers.