Lansdowne loses $11M, committee OK's 10-year extension to OSEG
Audit of city's public-private partnership coming Nov. 24
Councillors on Ottawa's finance committee, led by Mayor Jim Watson, unanimously supported adding 10 years to the city's partnership with Ottawa Sports and Entertainment Group (OSEG) at Lansdowne Park.
Early in their meeting Thursday, OSEG CEO Mark Goudie described how the public-private partnership ended the 2019-20 fiscal year with an $11-million net loss, in part because the Ottawa Redblacks ticket sales were lower than expected.
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The pandemic then caused a "perfect storm" that affected the retail sector and stadium that OSEG runs, said OSEG partner and Minto Group chairman Roger Greenberg. OSEG approached the city about tapping into money it put in a reserve fund but also to get extra time to recoup losses, if its owners — Greenberg, John Ruddy, William Shenkman and John Pugh — spend an extra $40 million to weather the pandemic.
Top city staff advised councillors that the city would be even better protected if OSEG kept the risk of running Lansdowne's stadium and commercial district until 2054.
"This is not a bail out. They have not asked for any money from the city, whether it be a loan or a cash infusion," said city manager Steve Kanellakos. "It's a business decision. We are in a joint venture agreement and this is in the best interests of the city and the partnership."
Coun. Shawn Menard, however, insisted there is a future value to amounts the city would give up, if the city agrees not to collect a share of rents, for instance, until 2066 — the year the city would share in the cash flow from retail rent.
What's the rush to do this right now?- June Creelman, Vice-president of Glebe Community Association
But after nine hours of hearing from residents, as well as from city staff and OSEG about complicated financial issues, Mayor Watson didn't call a vote and the report was simply approved.
"Thank you for all the money you have collectively put into this city-building project," Coun. Jan Harder told Greenberg and OSEG.
Praise for OSEG, but also questions
Dozens of people signed up to address the committee, and the first two hours saw many OSEG supporters, from those who have fundraised with the Greenberg and Ruddy families, to Redblacks podcast hosts and self-described "super fans."
Greenberg said OSEG asked supporters to come out to speak to show the non-monetary ways Lansdowne has helped the community.
He said he "bristles" when people say the city hasn't gotten anything from Lansdowne, when it has been transformed from a "decrepit" site that cost the city $3.8 million a year.
"I would suggest the city has received everything it asked for, and it wanted, in spades," Greenberg said, adding he and his partners did the redevelopment only to give back to their hometown.
Others want Lansdowne to succeed, but called on councillors to hold off extending the complicated deal until it's more clear how the pandemic will affect retail and events at Lansdowne, and until the city auditor submits a report on the complicated agreement on Nov. 24.
"Can we be sure this is in the public interest long-term? What's the rush to do this right now?" said June Creelman, vice-president of the Glebe Community Association.
For now, TD Place is closed, and no one knows when sports teams will play again for large crowds. Still, Greenberg is convinced Lansdowne's future remains based on having "sports at its core".
A working group made of councillors, OSEG and city staff will be created to work on the future of Lansdowne post-pandemic. Watson vowed not to develop the urban park, but is open to putting more housing on the site.
OSEG's requests will go to city council for a final vote on Nov. 25, and council will consider the audit of the long-term financial arrangement the same day.