Lansdowne 2.0 – Another Wasteful Boondoggle
These days at City Council, it increasingly feels like there isn’t a single bad idea that isn’t brought to the table. From the LRT to the proposed airport hotel bailout, City staff continue to push bad ideas as though they are vitally necessary for our communities. The latest such proposal is the Lansdowne 2.0 plan – a scheme that will indebt our City, and put other vital priorities further out of reach.
According to City staff, the plan will create a new event centre, new stadium stands, two residential buildings, a replacement of some of the existing mixed-use space, and some public realm enhancements. It will largely benefit sports teams and their fans, giving a massive subsidy to the Ottawa Sports and Entertainment Group and other businesses in Lansdowne.
Since its inception, there has been no positive cashflow at Lansdowne. It continues to lose money, and even the most optimistic assessments from the City – assessments that count all kinds of revenues to the City that could be achieved even if the City did not retain an ownership stake at all – suggest that the Landsdowne 2.0 plan would see the City will lose hundreds of millions of tax payer dollars over the course of the partnership. This doesn’t even include the top up that the City is proposing to give to OSEG to cover existing Lansdowne shortfalls.
City staff anticipate $55 million from the sale of subterranean and air rights, $20 million from other levels of government, and some modest annual revenue increases in property taxes, tourism funding, and general economic activity. Even if all the money were new revenue directly as a result of the partnership, it would only amount to $259 million over 40 years, which is about $400 million less than the costs of debt incurred.
Looking more closely at the financials, the picture becomes much worse.
The City expects to pay $16.4 million in annual debt servicing costs associated with this supposed investment. By way of comparison, actual annual revenue anticipated from the partnership in the form of ticket sale trickle downs and OSEG rentals is $1.2 million, or less than 10% the debt servicing costs. This is to say that the real net-losses, not including all the erroneous revenues that the City could realize even without this absurd plan, could be upwards of half a billion dollars over the course of the partnership.
Most importantly, many of these supposed revenues do not actually require the City to be the investor or owner of any property at Lansdowne. Just like everywhere else in the City, property tax revenues would still exist, and indeed could be much higher, if the City simply rezoned and sold the asset and got out of the way. Public money from the province and feds could still be sought for a more profitable project or a project that is more clearly in the public interest.
There is no reason to waste so much money so exorbitantly or to ask our children and grandchildren to foot the bill for such excess.
As our infrastructure crumbles, as our roads become unusable, as our communities need traffic mitigation measures, as the housing crisis worsens, and as our City faces immense budgetary pressures, it is deeply inappropriate for the City to be considering throwing more good money after bad. Every dollar that is spent propping up the Lansdowne money pit is a dollar which could have been spent on any number of these vital priorities.
Public dollars should go toward public services and infrastructure, not into private pockets. I am entirely opposed to the Lansdowne 2.0 plan and will be encouraging my colleagues on Council to consider a new plan for the site. The City should simply sell its stake in the money pit so that we can instead invest in public priorities across the whole of the Ottawa, rather than in private interests in a small part of it.