Committee decides OSEG should get more support

Thursday's finance and economic committee meeting on the possibility of extending a public-private partnership at Lansdowne Park and unlocking financial assistance to the Ottawa Sports and Entertainment Group was like a referendum on the city's deal with the company.

An amateur football organization, business groups, the live music industry and football fans lined up in the virtual meeting to support OSEG's request for help from city hall. Even OSEG's landscaping contractor sent a deputation to back the sports company.

On the other side of the debate were the skeptics, many of whom have consistently, over the past 10 years, challenged the city's interest in relinquishing partial control of Lansdowne to the private sector.

After a nearly nine-hour meeting, the committee chaired by Mayor Jim Watson voted unanimously in favour of helping OSEG.

More than 40 public delegates signed up to speak. It felt a bit like 2012 — when the city signed off on the redevelopment deal with OSEG — all over again.

Eight years later, controversy lingers.

OSEG needs help to survive its Lansdowne partnership with the city, especially now under the financial crush of the COVID-19 pandemic, and it's trying to find other private investors.

OSEG is projected to pay another $40 million over the next five years in the Lansdowne partnership, bringing the owners' total investment close to $200 million. In 2010 they thought it would only be a $30-million investment.

The company wants access to $4.7 million in an asset-maintenance fund to help mitigate its operational losses. OSEG, which alone contributes to the account, has agreed to repay the money after the pandemic.

More consequentially for the long term, OSEG wants a 10-year extension of its partnership with the City of Ottawa from the current expiry date of 2044 to provide more opportunity for the partners to recoup some of their investment in the redevelopment. In turn, the city wouldn't have to worry about the operating costs for an additional 10 years.

Another staff recommendation calls for an end to the “participation rent” — which compels OSEG to, in addition to $1 annual rent, pay a portion of the retail lease profit to the city after the initial 30-year financial “waterfall” scheme — if OSEG transfers the retail component.

The city also wants to form a working group to “improve the partnership” with OSEG.

Most public delegates spoke in favour of OSEG's involvement at Lansdowne and the company's contribution to Ottawa through the sports franchises and philanthropic work of its owners.

Others warned councillors about making major changes to the Lansdowne agreement without public input.

June Creelman of the Glebe Community Association said the organization supports allowing OSEG to access the $4.7-million maintenance account, but argued that recommendations to extend the city's agreement with the company should be part of a larger consultation.

Creelman also called on councillors to hold off on a decision until, at least, after an audit on the Lansdowne waterfall scheme, which is due to be released later this month.

“What's the rush to do this right now?” Creelman said. “Let's take our time, get it right.”

Angella MacEwen, an economist at CUPE, warned the city about making significant long-term changes to the Lansdowne partnership in the middle of a downturn caused by the pandemic.

Coun. Shawn Menard, who represents the Lansdowne community, but isn't a member of the committee, wanted councillors to pay attention to revenue the city might give up in the long term from the rent and profit-sharing in the retail area of the site.

OSEG co-owner Roger Greenberg, the executive chairman of the company, said the partners are willing to keep spending money on the partnership despite a weak financial outlook.

“We want to keep this going,” Greenberg told the committee. “We believe in what we're doing and we're prepared to inject another $40 million into this partnership.”

Greenberg also defended the success of the Lansdowne redevelopment against suggestions it provided nothing to the city, pointing to the fact that the city would still be sinking millions (about $4.6 million annually, according to the finance department) into a decrepit Lansdowne property if not for the partnership with OSEG.

City manager Steve Kanellakos also defended his recommendations on helping OSEG.

“We are not bailing them out,” he said. “It's a business decision.”

Kanellakos pointed out that the city has not paid any money toward operations of the OSEG portion of Lansdowne during the partnership.

As part of the redevelopment, the city paid $210 million to revamp the stadium/arena complex and create the urban park, which includes the Aberdeen Pavilion and the relocated Horticulture Building. The city borrowed $127.6 million to pay for the stadium underground parking and borrowed $26.4 million for the urban park.

With a council endorsement on Nov. 25, the city will begin the work of figuring out how Lansdowne should evolve.

Watson doesn't think the city is necessarily in for another acrimonious battle over the future of Lansdowne.

“We can't keep fighting old battles,” Watson said in a news conference after the meeting. “We have to move forward.”