Lansdowne Park to generate far less money, updated projections say

UPDATE:The two Lansdowne annual reports for 2021 and 2022 were received by theFinance and Corporate Services Committee on May 2.

Lansdowne Park couldgenerate $218.7 million less over the next four decades than had been projected justone year ago, according to revised calculations by the Ottawa Sports and Entertainment Group and the City of Ottawa.

The municipality'sarrangementwith the Ottawa Sports and Entertainment Group (OSEG) shouldresult in $326 million over 40 years, a "significant drop" from the $544.7 million figure presented to the same committeelast May, according to a report headed to the city's finance and corporate services committee on May 2.Because of the way the Lansdowne partnership's complicated financial structure works, the city wasn't set to receive payments either way.

Both sets of figures assume no upgrades are made to the current aging arena and stadium, even though the last city council did set in motion a$330 million redevelopment plan dubbed "Lansdowne 2.0" in June of 2022.

• City council votes to move ahead with Lansdowne 2.0
• 'Lansdowne 2.0' includes new arena, stands, 1,200 more living units

OSEG presented the updated financial projectionsat theJan. 13 annual meeting of the public and private partners, but the city also rigorously reviewed them, saidOttawa's deputy treasurer Isabel Jasmin.

They're a better reflection of how the pandemic had an impact on concerts and sports games at Lansdownebecause the $544.7 million projection had beenmade after only oneyear ofCOVID-19 restrictions, she said.

The revised financial performance for Lansdowne also reflects the current higher interest rates, andOSEGrefinanced a loan at higherrates, Jasmin said. A minor annual adjustment grows exponentially when spread out over 40 years, she pointed out.

"It actually confirmed the risk of continuing the way we are today and it actually builds the case for redevelopment," Jasminsaid.

Lansdowne 2.0

Last term's city council had a big debate in May 2022and decided to start down the path ofrelocating and buildinga new arena, building new north-side stadium stands, and developing 1,200 residential units in high-rise towers.

The $330-million project waspresented as being revenue-neutral.

The new arena and stadium stands would be paid for in part by selling "air rights" to a developer who could build real estate towering above Lansdowne. The City of Ottawa put out a call for expressions of interest from prospective developers last week.

• North side sucks, and so does the arena at Lansdowne, report says

The city is also counting on receiving a few hundred million dollars in payments long-termfrom a more successful, second redevelopment at the site, which would help pay the financing on the debt needed to build the new sports facilities.

The first Lansdowneredevelopment was also supposed to lead to payments for the city, however.

Instead, the partnership has posted a loss every year since it began a decade ago, and OSEG covers each one.

Under the complicated financial arrangement, which sees any cash distributed in a "waterfall" to six different levels, OSEGis paid back first and that leaves nothing to flow to the municipality.

• Council votes to extend Lansdowne partnership with OSEG

Asked how the city could reassure the public the second round of Lansdowneupgrades would indeed be revenue neutral, given how greatly the calculations have shifted over the years on the first phase, Jasmin said the city was doing a sensitivity analysis.

"This time around, having gone through the pandemic, we will be looking at different scenarios, worst/best case scenarios," Jasmin said.

Many other aspects ofLansdowne 2.0, including its price tag, are being updated from the last report a year ago, but Jasmin couldn't say when thatnext report would go before the new Ottawa city council.