City staff recommend financial lifeline for Lansdowne

OTTAWA — Financially struggling even before sporting events and concerts were cancelled, the COVID-19 pandemic has widened the wound at Lansdowne Park.

Now, the Ottawa Sports and Entertainment Group (OSEG) that manages the retail space, runs the stadium at TD Place and owns the Ottawa REDBLACKS and 67s is asking the city, its partner in the Lansdowne Partnership Plan (LPP), for help to survive.

“We’re the sports and entertainment side of the business and that’s gone effectively to zero right now and zero for the foreseeable future and then we’re a retail operation and the retail operation is carrying on best it can with the restrictions that are in place,” said OSEG President and CEO Mark Goudie.

“We’re expecting it’s going to be about three or four years to get back to kind of where we were going in and over the next five years it’s going to cost about $40 million to operate the business, with the lion’s share of that or $15 million kind of in the next 12 months.”

The report says given those projections, urgent action is needed because “OSEG does not have the ability to absorb the full effects of the pandemic within the current parameters of the LPP Agreements, and is at real risk of default.”

A report from city staff to the Finance and Economic Development committee says if OSEG defaults, it would result in a loss of up to $407 million to the city.

By extending the lease and partnership for an additional 10 years, the report says the city would avoid costs between $4 million to $21 million because OSEG would still be operating and maintaining the assets it is now.

As a result, OSEG is asking for, and city staff is recommending changes to the agreement that would allow it to:

  • Use $4.7 million from a reserve fund for operations this year
  • Extend its 30-year lease by another 10 years so there’s more time for OSEG to recover some of what its lost
  • Establish a working group

Right now, money in the capital replacement fund by OSEG can only be used for approved capital projects.

The report states the working group would look at ways to increase foot traffic on the site, “assess aging infrastructure and to increase the density in keeping with Council’s urban intensification principles including affordable housing.”

The working group would report on the options in the second quarter of 2021.

“I’m confident in the fairness and the fact that its not impacting the taxpayers of Ottawa at a really difficult time so I’m quite confident that this is a reasonable approach to doing what we need to do and making sure we have the strongest, most viable Lansdowne coming out of the other side of COVID,” said Goudie.

Goudie says the occupancy rate for its retail space at Lansdowne is more than 90 per cent with staples like the LCBO and Whole Foods. Still, there have been many visible closures over the last few months including Structube and South Street Burger.

The report that came out late Wednesday night is not sitting well with some councillors. 

“There have been stores that have closed like the furniture store over here, some restaurants have been closing so it’s sad to see, we want to see this area come alive and be full of life and some things are just not happening,” said nearby resident Derek Allard. “This is a great part of Ottawa right by the canal and again you’ve got the 67s, and CFL so to have this place alive with some help from the city I think would be beneficial to everybody.”

The report will be discussed at the city’s Finance and Economic Development Committee on Nov. 12 before going to full council for a vote.

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