The hidden financials of the Lansdowne Partnership Project reveal a very skewed proposal that places all the risk, but none of the reward, on the city, according to Ian Lee, MBA director of the Sprott School of Business at Carleton University.
“The deal is unbalanced and people don’t recognize that,” said Lee at a press conference called by Capital Ward Coun. Clive Doucet on Thursday.
“It’s about the commercialization of Lansdowne Park and dumping townhouses, a hotel and 300,000 feet of retail into Lansdowne Park.”
The plan, as it was presented to city council earlier this month, calls for both the city and the Ottawa Sports and Entertainment Group to contribute around $125 million each, but Lee said that’s not true.
When you factor in the increased value of the land that will be used for housing, the city could be contributing up to $179 million. When the cost of professional sports franchises is removed from the equation, OSEG is paying less than $100 million, he said.
Despite that, Lee insists that OSEG will be getting a return almost two decades before the city starts to see any revenue.
“The city’s putting up all the money up front for a crown jewel. The city is assuming most of the planning and financial risk,” said Lee.
“But OSEG is extracting most of the value from Lansdowne Park and thus most of the profits for the next 50 to 70 years.”
Lee also expressed concerns that the Municipal Services Corporation that would be set up to manage the park would not be accountable to city council and could renegotiate the financial arrangement with OSEG as they see fit.
Doucet criticized city manager Kent Kirkpatrick and his staff for “abandoning” their key role as impartial judge in this matter.