CITY HALL – Ottawa council has decided to step in and help the Ottawa Sports and Entertainment Group (OSEG) at Lansdowne Park as COVID-19 significantly impacts revenue.
“The City of Ottawa released a report outlining staff recommendations to allow Lansdowne Park to deal with the significant impacts the COVID-19 pandemic has had on both its operations and finances and find long-term opportunities to improve the viability of the site, while protecting taxpayers,” city staff released in a statement yesterday (Nov. 4). “The report also provides the Annual Reports for Lansdowne Park operations prior to the pandemic.”
Lansdowne Park is a landmark destination in Ottawa, city staff said. Since opening six years ago, Lansdowne Park and TD Place sports and entertainment district has welcomed more than 20 million visitors and hosted more than 1,000 events. Four million visitors came to the site in 2019 alone. Fifty businesses are located onsite, creating more than 4,000 full and part-time jobs.
“The success of Lansdowne Park is possible due to the partnership between the City of Ottawa and OSEG,” staff said.
COVID-19 arrived in Ottawa in March and has impacted many local businesses. Lansdowne Park, and all its core activities, have closed.
“The pandemic remains an active and dynamic challenge both in our city and globally; it remains uncertain when ‘business as usual’ operations will return for sports teams including the Ottawa RedBlacks, Ottawa 67s, Ottawa BlackJacks, Atletico Ottawa, the Ottawa Aces (scheduled to being in 2021) as well as special events, concerts, retail operations, and all related activities required for a destination such as Lansdowne Park to succeed and thrive.”
Required closures and restrictions have had unforeseen and devastating effects on all revenue streams at Lansdowne Park and it will take some time after the pandemic is over for Lansdowne operations to return to pre-COVID levels. The estimated financial impact to OSEG of weathering the pandemic is $40 million over the next several years. The Lansdowne Park Partnership is structured so that OSEG is solely responsible for operating deficits. As of March of this year, OSEG had already contributed $152 million to the partnership, which is $97 million more than the original 2012 projections; equity unlikely to be recouped under the current partnership agreements.
“Given the significant added funds OSEG has already contributed and will not recoup, they cannot also absorb the substantial COVID-related impacts without modifications to the existing partnership agreements,” staff said. “Staff are recommending a number of solutions that, if approved, would better protect city taxpayers, support the local business community, protect the financial viability of the partnership and put Lansdowne Park on better footing to withstand and rebound once the worst of the pandemic has passed.”
The city’s recommended modifications to the existing partnership agreement with OSEG include adding 10 years to the partnership, modifying some of the terms of the retail rent agreement and giving OSEG one-time access to lifecycle funds to provide immediate support during the pandemic, which OSEG commits to reimbursing in later years.
“These changes will improve the city’s financial position over the life of the partnership by $4 million to $21 million, largely due to the requirement of OSEG to fund the lifecycle maintenance of the stadium and parking facilities, as well as fund any potential operating deficits, for an additional 10 years,” staff said. “These modifications protect taxpayers from any operational or lifecycle costs for 10 more years and provide OSEG with the flexibility they need to secure external sources of funding and more time to potentially recoup earlier investments.
The city is in a unique partnership agreement with OSEG and will do what is possible to ensure Lansdowne Park can weather the COVID-19 storm in the near and medium-term, to the benefit of Ottawa taxpayers. Without amendments to the Lansdowne Park Partnership agreements, there is a high probability OSEG will be unable to sustain the financial impacts and will choose to default. A default by OSEG would be a loss with lasting impacts on Ottawa’s vibrancy, community spirit and local economy, while also costing Ottawa taxpayers between $118 million to $407 million.
The Lansdowne Report includes a recommendation of a city-staff led working group with representation of OSEG. Staff will report back to council by the second quarter of 2021 on potential strategies to position the Lansdowne Park Partnership Agreement for success once the city emerges from the COVID-19 pandemic. Included in this process will be the development of a robust public engagement plan to ensure Ottawa residents are involved in the future success of Lansdowne Park.
“The City of Ottawa is doing everything possible to protect and support its residents and businesses during this pandemic,” Mayor Jim Watson said. “Today’s report on Lansdowne’s operations provides a proactive action plan that will benefit the City and enable Lansdowne Park to weather the active and dynamic COVID-19 crisis. The Covid-19 pandemic has created a perfect storm of negative conditions for the Lansdowne Park Partnership that threaten its long-term financial viability. That is why the proposed amendments to our partnership agreement make good business sense and will offer further protections to the city and to our taxpayers. I believe that a strong majority of members of council will support the staff recommendation to give this partnership a fighting chance of succeeding once the pandemic is over.”
A council sponsors group is also being proposed, comprised of regional representatives of Council, to liaise with the working group by acting as a sounding board and to review and facilitate the development of a public engagement plan.