Lansdowne 2.0: a Half-Billion Dollar Boondoggle in the Making (Part 1)

Part 1 documents the absurdity of City Hall's latest developer sweetheart deal. Part 2 lays out how you can fight back.

As residents of Ottawa, we don’t expect a lot from City Hall. But we do expect our local government to manage our money with care and treat us with respect.

Treating taxpayers with contempt

With Lansdowne, the City is treating taxpayers with contempt.

The City is planning to put another half billion dollars into the site, which I have argued is a 1% Lansdowne Tax. This project goes to Council in October 2025 for a final go/no go decision.

Many outsiders are shouting from the rooftops asking why this project is still being considered.

• I’ve set up a petition calling for a referendum on spending half a billion to fix a sports stadium, that over 4,000 people have signed.

• Councillor Shawn Menard has provided an ongoing assessment of this project, with his latest analysis showing the shortcomings of the proposal.

• Commentator Ron Benn has pointed to 6 red flags that council is willfully ignoring.

• Hundreds of other residents have pointed to their own concerns with the project, through delegations to City Council, op-eds in local newspapers, letters to the editor, and more.

City repeating the same financial mistakes

My own analysis, as I argued in the Ottawa Citizen recently, is that Lansdowne 2.0 is repeating 3 of the worst financial mistakes this city has made in the recent past.

1. Believing the Partnership will produce meaningful profits for taxpayers

We know from the latest Lansdowne annual report that, to no one’s surprise, the Partnership lost another $9.2 million last year.

Lansdowne 1.0 was supposed to generate over $100 million in profits for taxpayers. That never materialized.

It is wishful thinking to believe that Lansdowne 2.0 will turn this around in any meaningful way.

But as noted in the chart below, the Lansdowne 2.0 proposal assumes that the site will be profitable going forward, despite its dismal track record. Lansdowne 2.0 will increase the site’s retail footprint by 2%, which OSEG believes will help turn this into a billion dollar retail leasing profit centre. (Seriously!) We can call that’s wishful thinking, or we can call it what the City’s due diligence consultant called it. Optimistic. That’s consultant-speak for highly unlikely to ever happen.

Source: Lansdowne 2.0 detailed financial projections. Note the projections shared with the public show only 5 year totals, which have simply been divided by 5 in this chart to show annual profit projections.

2. Squeezing a budget into an advertised price, increasing the risk of cost overruns and compromised build quality

Jim Watson famously said that Ottawa Light Rail would be “on time and on budget”.

By trying to squeeze the rail budget into an advertised price, we ended up with a lemon that has cost us even more.

We’re setting ourselves up for the same sort of mess with Lansdowne. Back in 2023, the City put the cost of Lansdowne at $419 million. In 2024, the Auditor General upped this to $494 million, on the basis that the City was not putting aside sufficient contingency funds.

I expect we will see a 2025 cost estimate from the City that meets the $419 million advertised price. But I suspect that estimate will:

1. be for a lesser product than what was promised in 2023,

2. have insufficient contingency funds available for cost overruns, and

3. not include features that City Hall will try to introduce later as “extras”.

In other words, we’re at risk of getting another lemon that will cost us even more.

The Mayor inadvertently acknowledged the heightened risk of cost overruns with Lansdowne when recently talking about rail projects:

“There are delays and cost overruns with every major infrastructure project in the world, that’s not unusual.”

Ottawa Mayor Mark Sutcliffe, 8 February 2025, CBC

So is he telling us to expect Lansdowne to come in over $419 million, despite what he is promising us?

3. Believing that we can sell off part of a public park and be guaranteed to get it back in the future

One element of Lansdowne 2.0 is to sell off property rights to a section of Exhibition Way, so that the developer can build a retail podium strong enough to support high-rise towers. City staff have said they can insert a covenant into the sales agreement guaranteeing the right of the City to buy back that podium and the land underneath at a future date.

But the public cannot rely on covenants in sales agreements. The people of Kanata are watching a golf course — that a sales covenant was supposed to protect as green space forever — turned into a new sub-division.

Why would the City rely on a failed legal practice that it knows can be easily overturned, as per the rulings of the Superior Court of Ontario and the Court of Appeal for Ontario?

Less with more

The truly crazy part of Lansdowne is that we are going to end up with an inferior product to what we currently have. I see 6 ways in which the proposed renovation is inferior to the current facility.

1. The football stadium will lose the roof on the north stands, along with 3,000 seats.

2. The hockey arena seating will drop from about 9,800 to 5,500 seats, despite the Ottawa Charge regularly bringing in crowds that fill the current stadium.

3. In tearing down the north stands and arena, we’ll demolish a structure valued at $130 million.

4. Ticket prices will go up, as attendees pay a surcharge for events and as facilities are redesigned to cater to a more affluent audience.

5. We’ll lose over 40% of the green space on the Great Lawn.

6. The much-loved berm to the east of the stadium will be removed and rebuilt at half its current height and size.

So what exactly are we getting for half a billion dollars?

1. A modern mid-sized Event Centre that will be fully accessible, unlike the current structure, and more energy efficient, although only to the bare minimum of LEED certification.

2. The ability to forgo spending about $1 million a year on maintenance to the existing north stands and arena.

3. About 8,000 square feet in additional retail space along Exhibition Way, increasing the total retail footprint at Lansdowne by about 2.5%.

Does anyone think this a good use of half a billion dollars of taxpayer money, given other priorities facing the City?

The evolving City rationale for Lansdowne 2.0

The Mayor and many City Councillors have been tying themselves in knots justifying why taxpayers should spend half a billion to renovate Lansdowne. And that rationale keeps shifting.

1. North side facilities are “end-of-life”

Initially, the Lansdowne proponents justified the stadium rebuild because the facilities were “end-of-life”. No one is denying they are old, but the City’s own consultant has said that those facilities can be maintained for another forty years for a total cost of $40 million.

2. North side facilities are “functionally obsolete”

Realizing the factual inaccuracy of their statement, the proponents switched to calling the facilities “functionally obsolete”. Again, no one is saying these facilities are state of the art. But they are good enough for the job they have to perform. The north stands are only used a dozen or so times a year, mostly when the RedBlacks have home games. Other sports teams, such as the Atlético Ottawa soccer team (playing in the photo below) house all their fans in the south stands and leave the north stands empty.

The City has highlighted the issue of accessibility in the north stands and arena. Yes, those facilities are not fully accessible, as is the case with many city-owned buildings. To improve accessibility, it would make more sense to invest in specific accessibility retrofits to Lansdowne as well as other city facilities.

3. Costs of doing nothing are enormous

The City has created a laughable “cost of doing nothing” analysis, which they have pegged at $12 million a year. This analysis assumes that if 2.0 does not move forward:

1. OSEG would exit the partnership and terminate the RedBlacks and 67’s sports teams

2. The City would manage the site as it is currently being run

3. Site attendance would be based on pandemic levels.

If OSEG left the partnership, and even if they additionally folded the sports teams, obviously the City would shift to a new approach for Lansdowne. One alternative proposal would be to create a community hub onsite, which brings in visitors 365 days a year. This would have new revenue streams to replace whatever is lost from the current event-driven approach. The city has never allowed alternative proposals to come forward, so we have no way of quantifying the impact of OSEG exiting the partnership.

A more accurate estimate would be to say that the real “cost of doing nothing” is closer to the $1 million a year required to maintain the current facilities.

4. We’ll lose out on major events

The Mayor’s most recent line of attack is that the City will lose out on major sporting events without a renovated Lansdowne.

That’s hard to comprehend. Lansdowne was good enough for the 2025 World Juniors Championship. It was also good enough for the 2023 World Men’s Curling Championship.

At this point, Mark is throwing any rationale against the wall to see what sticks.

My theory about what’s really going on

I believe the whole Lansdowne 2.0 project is more about making the private partner whole than it is about renovating aging facilities in order to create a sustainable business model. Remember, those facilities were considered good enough when we did the first overhaul of Lansdowne in 2014.

As part of the Lansdowne package, the City is auctioning the rights to build residential towers to one developer. I imagine the existing facility on Exhibition Way does not provide a strong enough foundation to support two large residential towers, and hence, we could not do build those towers overlooking the field without tearing down and rebuilding the adjacent stands and retail block.

We know that Lansdowne is a money loser. It has been a financial failure. And that the Ottawa Sports and Entertainment Group has been responsible for covering the losses of about $10 million a year.

The OSEG partnership includes major local developers. One thing those developers know how to do is make money from building luxury residential towers.

The profit on those towers could presumably cover past losses on Lansdowne. Those profits may be large enough to additionally cover potential losses going forward.

If that’s correct, and if an OSEG partner were to win the right to build the towers, then the private partner could be made whole for past losses. And covered for potential future losses. Those private partners would be less reliant on the Lansdowne business projections panning out, as they have an alternative source of revenue.

The only loser in this situation would be the taxpayer. Taxpayers will be counting on partnership profits to cover a share of our annual debt costs.

I’ll note that during Council debates on Lansdowne, one motion brought forward was that OSEG partners be prohibited from bidding on the development rights to build the towers, to avoid any possible conflict of interest. That motion failed, and accordingly OSEG partners are able to bid on the development rights.

My theory may be correct. Or not. I would certainly invite the City to point out any flaws they see.

What do you think? Let me know in the poll below.

What you can do to stop the madness?

With Lansdowne, I do not believe that City Hall is acting in the best interests of the people of Ottawa. Ordinary residents have become the last line of defence in stopping this giveaway.

Part 2, coming shortly, talks about tangible actions that you and I and others can work together on to stop this absurd project.