Lansdowne 2.0

Question: What is the Lansdowne Park Partnership Plan (LPP) and what benefit is it to the City?

The Lansdowne Park Partnership Plan (LPP) sets out that the City of Ottawa is a “Limited Partner” in the Master Limited Partnership established to manage construction of the Lansdowne project, oversee its ongoing operations, and share in the subsequent revenues that will be distributed through a closed financial system, also called the “waterfall”(see question below for the ‘waterfall’ definition).  Under this closed system, OSEG is responsible for any deficits that may occur from operations. The primary benefit of this P3 agreement for the City is that the City is protected from having to contribute any money for asset lifecycle maintenance or operating deficits for the Stadium, Parking, Retail or sports teams throughout the now 40-year agreement.

The LPP is made up of several components, including the stadium/arena, retail, residential, Urban Park, parking, the CFL sports franchise, and the OHL sports franchise. The City retains ownership of the land and is leasing the stadium and the land it sits on as well as the land for the retail. Underground parking has also been constructed for the use of all components, with the cost of the parking shared by each partner and the residential condominium corporations. The Urban Park (including the Horticulture and Aberdeen Pavilion buildings) is not included in the Partnership Agreement, and those costs are borne solely by the City.

Question: Do you have a short outline of why the Lansdowne proposal is good in the interests of City of Ottawa taxpayers?

After almost 10 years of operating the park with the existing facilities, it is clear that sustainability of the site and the partnership need to be revisited.  This proposal aims to revitalize Lansdowne Park and ensure the site can live up to its potential as a City-wide destination and be financially sustainable over the long-term.  Having more diverse retail and state-of-the-art Event Centre and North Side Stands that replaces antiquated facilities, will create more event days and attract more visitors to the site.  Through modern, more comfortable venues that meet current day accessibility standards, the user experience will be enhanced, and will attract events that will have a significant impact on the local economy. 

The redevelopment is proposed to be paid for by a combination of the sale of air rights over the existing Civic Centre, allocation of the incremental future property taxes, a ticket surcharge, additional returns to the City from the waterfall due to the improved financial projections resulting from the revitalization of the park and a restructuring of the current waterfall distribution model.  The City and OSEG share more equally in the net revenues throughout the entire term of the agreement and OSEG continues to pay any operating deficits in any given year.  The business case seeks to ensure that the proposed business plan pays for itself.  The source of funding available to pay for the construction is a direct result of the proposed redevelopment on this site and is an integrated package. This financial proposal means the City does not need to divert funds from capital infrastructure budget, does not delay other critical infrastructure investments, and does not result in increased taxes for residents.  

The redevelopment concept is consistent with the new Official Plan (OP) policies regarding the Lansdowne Special District, it replaces inefficient facilities with sustainable energy efficient building and supports and recognizes the role of Lansdowne as a destination for festivals, year-round sports, residential, commercial and public space. This helps with the overarching goal to attract 5 million visitors to the site annually.

Question: Why has OSEG created the proposed concept plan for Lansdowne Park?

The City and Ottawa Sports and Entertainment Group (OSEG) have a 40-year Partnership committed to the success of Lansdowne Park. In December 2020, City Council directed a working group made up of City and OSEG representatives to consider options to enhance the sustainability and long-term financial viability of Lansdowne’s operations and the Partnership. 

Prior to the pandemic, OSEG already had to contribute significantly more equity to date than it would be able to recoup in the waterfall, and there were serious operating and financial challenges with the operations of the 50+-year-old north stands and arena. Work was also underway to try to bring more reliable foot traffic on non-event days, with an overall goal of attracting five million visitors to the site each year.

Further in 2021, City Council  approved a framework and asked staff to bring forward detailed plans and cost estimates for the revitalization of Lansdowne Park including a funding strategy for the City’s portion; an assessment of revenue neutrality and assessment of the financial implications for the City for the term of the Partnership agreement.

Question: How will this plan improve commercial space at Lansdowne?

The plan involves the development of a new Event Centre, new North Side Stands, a new mixed-use development in the location of the existing Civic Centre, comprising 100,000 square feet of retail. 

The addition of 1,200 residential housing units on the site will give more consistent life to the site on non-event days. It will create an on-site population base to help support the retail activities and provide more customers for Bank Street businesses

Through a proactive commercial program, a multi-year strategy will be developed to attract a curated mix of retail offerings that will position Lansdowne as an entertainment and lifestyle destination in the heart of the city.

Question: How will the City ensure that affordable housing is including in the new units being proposed?

The City is recommending that the new residential component have a minimum of 10% affordable housing or approximately 120 units. 

Staff will work through the air rights disposal with the future air rights developer and non profit housing provider to advance any and all options to increase the level of affordability and number of affordable units.

Question: What would happen if OSEG and the City do not move forward with the proposed revitalization?

In 2021 Council considered a status quo option and a refurbishing of the Civic Centre and North Side stands. The status quo option was not recommended as both the Civic Centre and North Side stands were built in 1967 and are approaching functional obsolescence. While the facility remains structurally sound, reviews conducted by City staff and two independent engineering firms conclude that it will become harder to retain and attract guests and events to TD place with the facility maintained in its current state.

If the status quo is maintained, the structure will continue to serve, maintenance alone will never address the underlying functional deficiencies of the 54-year-old building. The facilities will continue to decline in commercial usability, making it harder for the Partnership to successfully compete for events at the stadium and arena. The impact of this means it will be extremely difficult for the Partnership to meet its commercial, operational and financial sustainability requirements. This is expected to worsen as the facility ages. It will become more difficult to attract events, it will continue to be energy deficient, and will not meet accessibility standards. The asset will continue to depreciate over time, needing more funding to address on-going maintenance, with an end result, a large obsolete concrete structure in a prime City destination.

Question: Would roughly comparable economic benefits also accrue to Ottawa if a $332.6 million investment was made elsewhere in Ottawa? 

This is a self-contained proposal and revenue neutral per Council’s direction in July 2021.  It relies on additional revenues from 1,200 new residential units and additional retail space and revitalized sports and event facilities to fund the investment, while at the same time increase foot traffic to enhance the commercial, operational and financial sustainability of Lansdowne as a whole. The economic benefit is specific to this proposal only.

Question: What is being done to protect and improve the public realm?

The detailed investment plan for the urban park and public realm would provide more opportunity and options for programming as well as simplifying the operations of existing facilities while considering pedestrian and cycling safety and creating a more welcoming outdoor realm. Improvement priorities will be vetted through feedback received from residents, working groups and staff. The current plan includes the beautification of the site through a renewed landscape plan, additions of outdoor seating and shade cover to allow for passive use as well as improving access to washroom facilities.

Question:  What are the environmental impacts of this plan? Does this plan contribute or detract from the City’s ability to progress climate change objectives? 

The rebuild of the site in 2014 transformed an asphalt and concrete campus into a destination where people can live, visit, shop and be educated and entertained. The redevelopment brought greenspace, play areas, sports venues and restaurants and retail. It also became the first neighbourhood in Canada to be awarded the LEED ND: Plan (v.2009) Silver certification for a design and implementation that meets high levels of environmentally responsible, sustainable development. Those elements remain in place today and will be carried forward with the proposed redevelopment.  

The existing facilities at Lansdowne are highly energy deficient, with the arena being one of the largest energy consumers in the City’s real estate portfolio.   The new Event Centre will strive for a high energy efficient design, with a live green roof, that can be sustainable and reducing operating costs. The new design will target the City’s Green Building Policy and will also aim for LEED silver certification, at a minimum. 

Question: What does the proposed plan mean for the current berm?

The berm will be re-built around the new event centre, allowing a gathering space for visitors and residents of the site. The park will continue to serve the needs of the growing community, and visitors to the site. The design and reconfiguration of the new berm is ongoing, and will be an element of consultation as we move into the next stage of the plan.   

Staff, as directed by Council, are examining the cost and feasibility of making a publicly accessible event centre roof.  The findings and analysis will be part of the next report to Committee and Council.

With respect to the impacted soils within the existing berm from the spent ash, a result of historically heating buildings by coal, they are currently safely capped at a depth approved by the Ministry of Environment, Conservation and Parks (MECP). With a relocation of a new Event Centre the soils will need to be removed safely and sent to a licensed disposal facility. The City, and its contractors, will need to abide by the rules set out by the MECP when excavating and managing the soil on site. This will include monitoring measures and dust control. A fulsome Soil Management Plan will need to be developed with the MECP, if this project proceeds.   

Question: What does the proposed plan mean for the Aberdeen Pavilion and Horticulture Building?

The City is seeking to make capital investments into both the Horticulture Building and Aberdeen pavilion which would involve retaining experts to explore opportunities to improve climate control methods, such as air conditioning, and heating, while maintaining heritage considerations of the City buildings. The work will include costing and options that will be reported back to Council in 2023/2024.

Question: How can the City improve residents ability to access the site by foot or using cycling infrastructure?   

Staff are proposing a medium to long-term plan for initiatives that will enhance connectivity for pedestrians and cyclists and improve on-site safety for all users and reduce conflict between transportation modes. The proposal will address connectivity concerns surrounding Lansdowne and will incorporate measures as part of the revitalization, as identified by key stakeholders including the NCC.

A series of 22 suggested connectivity improvements, along with a key map, is listed in Document 3 (Lansdowne Park – Proposed Active Transportation Upgrades) of this report. 

Question: What is the incremental cost to make the roof fully accessible? 

Staff have been tasked to report back to Council on this and make recommendations on the final funding strategy and business case.

Question: Why is the City seeking a rezoning for the site?

The following zoning modifications are required to implement the proposal from OSEG: 

• A change in the land use designation to allow for a portion of the new Event Centre to be constructed within the Open Space subzone, shifting the boundary between the zones by up to 50 metres. 

• New land use permissions and performance standards, to be established for the respective zones, 

• An increase in dwelling units above 280 which is not in keeping with the 2011 Minutes of Settlement and OMB Decision, and 

• Amendments to the current height schedule to establish new maximum building heights to support high-rise development.

The proposed development would be subject to consultation with the Urban Design Review Panel (UDRP), with all applicable Council approved design guidelines to assist in the detailed design and future Site Plan Control applications.   Consistent with current practice, there will be public consultation on all aspects of the planning process.

Question: How will the public be informed on the proposed plan?

The rezoning application will be subject to City procedures for public engagement (details outlined in the staff report), circulation and notification, and will follow with a report to Planning Committee and Council.  If Council believes the minor change required for the Event Centre should proceed more quickly, it can be separated from the other amendments and consulted on individually.

Staff are planning and will undertake a robust public engagement plan, including through Engage Ottawa, Councillor updates, advertising, social media, As We Heard It Reports, targeted workshops, pop-up engagements, survey’s and community public consultation.

A report will come back to Council before construction can proceed that will include what was heard during the multiple consultation activities. 

Question: What is the ‘waterfall’?

The current financial arrangement for the LLP, also known as the waterfall, is based on a closed system that defines equity contributions from the City and OSEG to be used solely for the purposes of the total project. OSEG must contribute minimum equity and additional equity to cover any excess stadium/parking construction costs or to cover any negative operational cash flows. Annual net positive cash flows from the stadium, sports franchises and retail operations are distributed to each partner (the City and OSEG). To date there have been no net positive cashflows. 

The distribution of net positive cashflows, is based on a “waterfall” of priorities; after first making a mandatory contribution to the Stadium and Parking Lifecycle Replacement reserve regardless of positive cashflows; second, return on equity to OSEG and the City (which is zero for the City as it did not contribute any equity); third, return of OSEG additional equity; fourth, return of OSEG minimum equity; fifth return on the City’s deemed equity; and finally, any remaining balance is shared equally by the City and OSEG. Return on equity is set at 8 per cent non-compounding interest.

Question: What is the issue with the current ‘waterfall’?

The problem with the current model is that it didn’t contemplate OSEG contributing so much additional equity, primarily to cover year over year deficits since inception. As of March 31, 2021, OSEG has contributed $160 million, which is $100 million more than projected in 2012, primarily to cover year over year deficits. They have also accumulated $60.2 million of interest on this equity at 8 per cent interest. Projecting this accumulating equity and interest there is no expected returns from the waterfall to be paid to the City for the term of the agreement. This is primarily because the City only gets paid after all equity and return on equity is paid back to OSEG first.

Question: How has the waterfall agreement been improved to benefit the City of Ottawa taxpayers?

In the current agreement, OSEG is paid back first, in the proposed Lansdowne 2.0 we reprioritized the waterfall so the City does not have to wait until OSEG is repaid its equity. 

In the Lansdowne 2.0 the City’s assets will be newer and require less lifecycle spending and the City is receiving more distributions because we start sharing in the profits right away. The projected distributions are increasing primarily because of the increase in retail space and additional events revenue.  

The projections for additional revenue from events and sports are conservative estimates tied directly to the increase in premium seating and the ability to hold events and stadium games concurrently which is not operationally possible today.  

The key proposed waterfall changes include:

• Eliminating OSEG minimum equity and interest earned to date and City’s ‘deemed equity’
• Eliminating the eight per cent interest going forward
• Reprioritizing the waterfall distributions such that OSEG and the City are repaid their equity contribution at the same time

Question: Is Tax Increment Financing being proposed for Lansdowne 2.0?

No. Tax Increment Financing is not being contemplated for Lansdowne 2.0. 

90% of the additional property tax will be dedicated to debt servicing and only the amount set at stabilization date (2027-2029), the remaining 10%, and all future tax increases, will be used to fund city services. Education tax is still transferred to the province.

Question: How do we know the air rights will provide the money needed?

The City commissioned an external appraisal firm to assess the land sale prices on a per square foot of anticipated development density.

The City’s internal appraisers reviewed the findings and reconciled the data in relation to the OSEG proposal. Based on the preliminary plans showing an anticipated development density of 850,000 square feet the estimate of market value attributable to the residential development air rights is $43.5 million.

By following the same process as was done during the initial redevelopment, with oversight by a Fairness Commissioner, staff believe the sale or lease of these air rights creates significant added value by generating revenue to offset the project costs and helps to make the overall business case affordable to the City. 

Question: Does the plan address the increased traffic generated by the new residential and commercial spaces?

A preliminary analysis of the potential transportation impacts associated with the residential in-fill development on the site has been completed. 

The preliminary review assumed an additional 1,200 dwelling units on site with the primary access being Bank Street and Exhibition Way. The preliminary assessment found that the intersections along Bank Street between Fifth Avenue and Sunnyside Avenue, including the lane reduction along the Bank Street bridge can accommodate the additional number of site generated trips. 

As part of the forthcoming land use planning applications, a Transportation Impact Assessment (TIA) will be prepared as per City guidelines to assess the proposed trip generation from the additional commercial and residential development, along with the potential impacts of additional parking supply related to these uses. City staff will consult the public on traffic, parking and site circulation following the results of the TIA.

Question: How are we going to engage with residents on Lansdowne 2.0?

The Lansdowne 2.0 project team has developed a robust, city-wide engagement strategy to ensure that all residents voice their ideas, inputs and perspectives.

The engagement, which will run for several months, will seek input and feedback from residents and businesses on a proposed Lansdowne 2.0 project.  

The consultation will include a series of online and in-person surveys, a public newsletter, community consultations, business consultation, public workshops as well as pop-up engagement activities. The engagement opportunities will provide an opportunity for residents and businesses to learn more about the project, ask questions, and provide feedback.

Question: What would be the seating capacity of the new Event Centre and new North Side Stands?

North Side Stands capacity is 14,072 seats going to 11,200 seats (12,000 with standing) and the Civic Centre is going from 10,585 for a concert to 6,600 for a concert (9,500 for a hockey game to 5,500).

Question : Is the City part owner of the RedBlacks and 67’s?

A Lansdowne Master Limited Partnership (LMLP) was established for the Lansdowne Project.  The City and OSEG are limited partners, each owning 49.995% of the units.  OSEG as General Partner owns an additional .01% and has exclusive management and control over the purpose and affairs of the Limited Partnership.  A limited partnership was created for each of the components of the project, namely the Retail, Stadium, 67’s and REDBLACKS. The limited partner for each of the components is the LMLP and OSEG as the General Partner maintains .01% in each component.  OSEG has transferred its right, title and interest in the components to the LMLP.   The City does not own the teams, but does have right of first offer in the event of a sale or relocation, but only in the first 8 years of operation (this was extended by ten years in 2020).   The professional soccer franchise is not included in the LMLP, they pay rent to the LMLP for the use of the stadium.   As a limited partner, City has no day-to-day management rights or obligation for the component limited partnerships and is not responsible for funding any negative cashflows.

Question: How can we stay informed on the project?

The best way to stay informed on the project is to visit engage.ottawa.ca/lansdowne-2-0 and click “Subscribe” for project updates.

If you have an additional question, please ask us your question below.