Three ways to help Lansdowne succeed
Transparency and robust oversight still needed, writes Lavagnon Ika.
What city would not want to turn a crumbling sports facility into a world-class attraction? No one, however, can get there without good project management.
The City of Ottawa entered a 30-year public-private partnership (PPP) with the Ottawa Sports and Entertainment Group (OSEG) and has delivered a multipurpose urban centre including a football stadium for the Ottawa Redblacks, a refurbished arena, new condominiums, high-end shopping, restaurants, a large movie theatre and substantial green space. That was Lansdowne 1.0, which, although a good destination spot for residents and tourists alike, experienced cost overruns.
Ten years later, the city needs to replace some endof-life infrastructure and ensure the continual evolution of Lansdowne. Herein the objective of Lansdowne 2.0, which seeks to construct a mid-size event centre, redo north-side stadium stands, and build two-storey retail space and two residential towers.
The main expected benefits are economic (retail leasing revenues); social (housing) and ecological (a positive environmental footprint). According to the latest update from the Lansdowne Partnership Plan, the social infrastructure project is pegged at some $419 million, which includes a contingency fund for future surprises. Mayor Mark Sutcliffe argues: “It's already better than it was before, now we have an even better plan for an even better Lansdowne.”
A question, however, remains: Will benefits outweigh costs? Will Ottawans get bang for their buck?
As we await the city auditor general's report in June
2024, my research suggests that half of projects fail to deliver expected benefits. One in two fails to come in within budget.
Ottawans know that the city does not have a proven record for the projects it oversees (for example, light rail). So, they remain concerned with value for money. What can the City do to avoid underperformance? I offer three modest recommendations:
First, don't settle for “first is best”: Clearly, the city deemed the status quo — the “do nothing ” option — costly ($625 million over the next 50 years). But rushing headlong into the first and only option can be even more expensive. We read about affordable housing options, for example. But it is unclear what project implementation options the city assessed, how much each may cost, and what benefits each may deliver. There may be more than one way of redeveloping the park.
Second, do your benchmarking transparently.
Nobel Prize-winner Daniel Kahneman, who recently died, is clear. You are prone to underestimate the costs and overestimate the benefits of a project under consideration, even when you have considerable experience that past projects do not live up to expectations. So benchmark your project during design, construction and operation. The city notes: “A benchmarking exercise was also undertaken by an independent cost consultant and confirmed that the estimate lies comfortably within the range of recent projects of similar size and scope.” This seems to fit with best practices, but we do not know what projects were used as a reference class to draw a comparison of costs.
Third, reclaim oversight and learn from past failures in terms of citizen engagement. Remember the setbacks with the PPP delivery model on the LRT and the poor supervision of the project by the city. The Ottawa LRT Inquiry Commission states: “Public entities should avoid setting budgets too early, and remain flexible as project cost estimates evolve during the planning for such projects.”
In this case, the budget, pegged at a Class C estimate — that is, at the preliminary design phase before any project plan is written — is bound to increase when the project nears implementation. This has already been the case between 2022 and 2023, due to design omissions and additions to the scope such as 140 parking stalls.
In Lansdowne 1.0, the choice of the project delivery model was not transparent. While the city initially opened a public design competition to redevelop the entire park, it surprisingly called it off to form a PPP with OSEG. This led to taxpayer frustration, project delays, and costly lawsuits. The city talks about “due diligence.” The ultimate due diligence is project oversight, especially in the face of uncertainty as unplanned risks may occur and lead to cost increases. This heuristic might help: “Plan your work and work your plan but be ready for surprises down the road.”
As father of project management Albert Hirschman long suggested, infrastructure development is a matter of ambition but also modesty. The City of Ottawa is not short of ambition. But it needs to show more modesty — through prudent planning and diligent oversight. Will the city be up to the task?