Looking into Lansdowne

Transportation: lighter than air

2012-02-08T19:03:00.002-05:00

Who can resist a smart remark when it comes to the Lansdowne project?
That was the approach that Mayor Watson took in suggesting that we should buy in to the project because the alternative was to leave the site as is forever. (Think of the anthropologists a millenium hence!)
I'm as guilty as anyone. At one point I commented to various people that the transportation plan has changed because none of the new drawings shows a dirigible (remember the beautiful picture of the sunset with the full stands and the lighter-than-air craft?). I said somthing along the lines of "Well I had assumed that the plan was to transport the thousands of fans to the games by lighter-than-air craft and I guess they have change their mind."
OK, I apologize. I was kidding.
I don't quite understand how everyone gets there, but we "make do".

So what's new?

2012-02-08T17:31:00.001-05:00

On Tuesday February 7 (yesterday as I write this), a standing-room-only crowd assembled at Ottawa City Hall for a presentation on the Lansdowne redevelopment proposals as revised through deliberations with the Lansdowne Design Review Panel. Apparently some thought that plans for Lansdowne had made great strides through the revision process. The Citizen ran a headline in Wednesday's edition "Modernist vision unveiled for a renovated Lansdowne". [What was the previous design -- baroque?] Metro was less enthusiastic with coverage on page 3 under the lead "City raises curtain on new Lansdowne design plans".
But in reality there was little new in the material released. The location of the various buildings has not changed for over a year. The elimination of the taller buildings along Holmwood Ave. was the product of the negotiated settlement before the Ontario Municipal Board which was completed some 10 months earlier.
The only new development was the decision to slice a chunk off the Horticulture Building prior to moving it eastward to facilitate the digging for the underground parking.
No doubt the the Design Panel had lengthy discussions about design features and quite possibly they did an excellent job in getting improvements in details of the proposal. However it would have been interesting to inform the public as to what those improvements are.
At the briefing everyone congratulated everyone else on the work they had done. But it was not obvious what (apart from the changes for the Horticulture Building) was achieved.
Once again we had new "eye candy" -- pretty pictures presented for the public -- but we were given no idea of the nature of the refinements introduced through interaction with the review panel.
Plans for the park are as understood months ago. The only new detail, and this is a troubling one, is that the "art feature" to the west of the "great lawn" will consist of vertical beams with LED images. The troubing aspect is that such LED arrays can just as readily become advertising billboards as they can be abstract art.
Plans for the stadium seem to present no surprise. We have known about the wooden "veil" around the stadium for more than a year. The really outstanding aspect to me was that the presentation failed to mention the arena buried under the northside stands. Fixing up the arena, known to most people as the Civic Centre, once had some importance. Now it seems to have been forgotten. It is not clear how you will get into the arena in the new plan because shops will fill the north side of the buildiing and there is to be an office complex to the west.
When it comes to the "urban village", a quaint name for the shopping centre, nothing has changed. Yes it is intended to have shops, restaurants etc. on the second floor of the buildings. We have always known that is required because the plans call for vast amounts of retail space. If the second floors were not to be used, the footprint of the commercial buildings would have needed to be much greater.
In the commercial complex the one design feature is that there would be increasing use of wood in the exterior of the buildings, the further those buildings are from Bank Street. Big deal!
So I can only call Tuesday's event a bust. We learned virtually nothing we did not know already.
And all the visual presentations coyly showed all the tower structures as transparent outlines. The justification for such an approach was that the detailed design for those buildings has yet to be determined. Conveniently it also removed from the presentation some of the more egregious aspects of the overall development plan. Out of sight is out of mind.
Tomorrow (Thursday Feb. 9) the second shoe drops. According to oral interventions by the City Manager, a staff report is to be released on the Lansdowne project for consideration at the meeting of Finance and Economic Development Committee (FEDCO) the following week.
Items to look for in the staff report include:
- update on the finances for the project
- report on the competition for air rights and for project construction
- what can go ahead regardless of legal proceedings underway
- what happens if the Court of Appeal fails to support the City.
As always the French-language press seems to be the only source for investigative journalism. Francois Pierre Dufault asks in today's (Wednesday's) Le Droit "The municipal adminstration seems not to be concerned about other approaches, stating even they have no plan B" (my personal translation).
As Maggie Muggins used to say "You never know what is going to happen tomorrow, do you Mr. McGarity."

Open Competition

2012-01-09T23:12:00.000-05:00

Apparently City Council is to be provided with details concerning the bidding process for residential and office development at Lansdowne Park. We have already been told that Minto was selected for the residential projects but that no acceptable bid was received for the office building proposed for Bank Street. A Fairness Commissioner was appointed to oversee the competition.
All this is fine... so far.
But what will be interesting to learn is the number of bids received for the residential part of the competition. If there were many bidders, that is a good sign. If there were few, we should be concerned.
I fear that there is a sense in the community -- whether right or wrong -- that the fix is in. If that is what developers think, they would not bother bidding.
If there were few bidders we should not blame Minto, the fault lies entirely with the City. Just think back to the City's actions in earlier stages of the Lansdowne redevelopment project.
Because of the redevelopment of Lansdowne, it was determined that trade fair facilities would need to be built elsewhere. The City staff proposed to simply offer City funds to Shenkman Corp. to erect such a facility. Some Councillors thought that was a bit much -- maybe someone else could submit a competitive proposal. So the City ran a competition and Shenkman was the only bidder. This was not surprising -- City staff had already announced that they wanted to give the project to Shenkman. Now it is quite possible that Shenkman was by far the most competent firm to erect and run the trade fair facility. It has now opened on time under the name CE Centre, apparently with good success.
But the original idea of simply granting the job to Shenkman without competition compromised badly the subsequent competition. The fault is not with Shenkman, nor Council (for once); the blame is entirely with City staff.
So now we wait to learn about the competition for the residential buildings. I hope that the tainted competition for the exhibition facility did not negatively affect the competition for the residential development.

A question of process

2012-01-02T15:55:00.000-05:00

While we await the decision of the Ontario Court of Appeal regarding the case brought by the Friends of Lansdowne, it is interesting to consider similar issues which do not involve redevelopment of Lansdowne Park.
In the Globe and Mail of Friday December 30, there was an interesting article entitled "Does it matter if our laws are passed illegally?" by Peter H Russell, professor emeritus of political science at the University of Toronto. Professor Russell deals with the fact that Royal Assent was given on Dec. 15 to Bill C-18, the "Marketing Freedom for Grain Farmers Act. This is the legislation which ends the Wheat Board's monopoly for sales of wheat and barley from Western Canada.
Professor Russell notes that on Dec. 7 the Federal Court had ruled that the way Bill C-18 was introduced into Parliament violated the Canadian Wheat Board Act. My understanding is that the Wheat Board Act calls for a referendum among grain producers prior to a change in the monopoly provisions.
This seems to be very similar to situation which applied to City procurement procedures in the case of Lansdowne. The Friends of Lansdowne argued before Ontario Superior Court that the City had violated its own procurement regulations in the way it proceeded with the Lansdowne redevelopment scheme. The Court seemed to take the position that because City Council has the authority to amend its procurement procedures, it has full authority to do whatever it wants. The contrary view, held by the Friends of Lansdowne, was that Council should amend its regulations if it wishes to engage in an as-yet-disallowed procurement action.
So there is a similarity to the Wheat Board matter. The federal government could have first amended the Wheat Board Act to remove the requirement for a referendum, and then eliminated the monopoly feature in the Act. Similarly the City of Ottawa could have modified its procurement procedures, either its procurement by-law or its Ottawa Option procedure for unsolicited proposals, to provide a legitimate basis for its actions in striking its deal with OSEG.
Both the City of Ottawa and, I expect, the Government of Canada, will be needlessly spending resources defending their mistaken ways of operating. It's great news for members of the bar, but not so great for taxpayers.

Diligence overdue

2011-07-04T23:45:00.000-04:00

In the hearing before Ontario Superior Court which terminated last week, the lawyer for the Friends of Lansdowne maintained that the only independent review of the financial arrangements supporting the Lansdowne Partnership plan, was the study in 2008 by Deloitte. That study was never released to the public, nor was its existence made known to members of City Council.
The lawyer for the City denied that claim and said there were other studies conducted. It is difficult to take that counter claim seriously.
It was said that the financial arrangements were studied by Graham Bird Associates(GBA) and by PriceWaterhouseCoopers (PWC). But Graham Bird Associates was retained to carry the process through the administrative and legal hoops, not to analyse the deal. Although I believe the contract between the City and GBA is not public, it is difficult to imagine that the firm did not have a strong financial incentive to move the project forward. It is unlikely that GBA would minimize their revenue by placing obstacles in the quick execution of the LPP.
As for PWC, they were retained by GBA, not to analyse the financials of the deal but rather to create a business model based on assumptions provided by the City and their "partner" Ottawa Sports & Entertainment Group.
In arguing the City's case, their lawyer also claimed that the two reports issued by the City Auditor General constitute an independent analysis of the LPP financials. While the Auditor General is independent, his range of examination was tightly controlled. Moreover, the report which the Auditor General received from an independent US consultant on the LPP is not available.
So the bland assurance in staff reports that due diligence has been conducted with respect to the financial arrangements behind the LPP seem to be pure and simple puffery.

A great landlord

2011-07-03T13:52:00.000-04:00

Sitting in Court for seven days provides an opportunity to learn much. One thing I learned is that the City of Ottawa is a very generous landlord.
The Friends of Lansdowne (FoL) are challenging the City's arrangement with Ottawa Sports and Entertainment Group (OSEG) known as the Lansdowne Partnership plan. FoL indicates that the City is providing an illegal "bonus" to OSEG by providing the land for the development of the shopping complex at a mere one dollar per year for a term of thirty years. According to the explanation given to the Court by the City's lawyer, the City is not conferring a "bonus" in its $1 leasing arrangement because there is provision for a payment to the City.
It is in examining that payment that we learn how generous and understanding a landlord the City is.
According to the argument presented to the Court, a calculation of the value of the land was undertaken by the City and the market rent was ascertained. It was then discovered that if the City were granted "deemed equity", and a return to the City on that "deemed equity" were established, a revenue stream equivalent to rent could be projected by using the financial model created under the Lansdowne Partnership plan. No doubt the City's lawyer would say that it is a mere matter of semantics whether such return in considered "rent" or "return on deemed equity".
But there is a bit of a problem with the City's argument. The return on "deemed equity" is only payable at the fifth level of the "waterfall" -- the series of prioritized payouts from the "net cash flow" of the entire Lansdowne Partnership. What this means is that every other financial obligation is to be satisfied prior to the City of Ottawa receiving any return whatever on its "deemed equity".
Payments are made to OSEG not only to provide a return on its investment but also to repay what OSEG has invested (including any payments for cost over-runs on the stadium) before any money is available for the City as a return on its "deemed equity".
So all of this makes the City of Ottawa a remarkable landlord.
Normal landlords don't care about your other financial obligations. If you don't pay your rent in full and on time, you are out on the street. A normal landlord would not allow you to defer rent payment to allow you to pay your bar bills or keep up your car payments.
By contrast, the City of Ottawa is an ideal landlord. The City is happy to permit its tenant to give priority to every other imaginable demand before expecting that any payment equivalent to rent be effected.
May we all be so lucky as to have as splendid a landlord as the City of Ottawa!

Foolishness versus illegality

2011-07-02T10:19:00.000-04:00

In the seven days in which Ontario Superior Court has heard the case of Friends of Lansdowne versus the City of Ottawa, the complex Lansdowne Partnership Plan has been discussed in great detail. As I have listened to the lawyers present their clients' positions, is has been clear that there is much to criticize.
But for the Court, no matter how unwise or even foolish the arrangement may be, the issue is: do the City's actions constitute a violation of law?
The question of legality goes beyond what is sensible. There is no law against making a bad decision, or, put more bluntly -- stupidity can be perfectly legal.
The argument from the Friends of Lansdowne centres on three issues:
- Can the City of Ottawa ignore its own procurement policies without violating the requirement in the Municipal Act that it establish and maintain such policies;
- Has the financial arrrangment struck with Ottawa Sports and Entertainment Group provided a benefit to a private party which is contrary to the Municipal Act; and
- Has the action of the City in withholding information or in presenting misleading information to the public and to elected officials constituted bad faith.
If the Court finds that any one of the allegations by the Friends of Lansdowne is valid, there may be a basis on which the the actions of the City may be nullified.
But in looking forward to the prospect that the Court might indeed quash the City's arrangment with OSEG, what exactly would that mean in practical terms?
While such a decision by the Court would certainly be a major story in the media and could be a political bombshell, it need not set back the redevelopment of Lansdowne Park in a major way. If the City really wants to rebuild the stadium and fix up the arena, it can go ahead and do so. After all, the City is putting up all the money for the redevelopment. If the City would like to have another organization take on the management of the facilities or to take responsibility for maintenance, it can readily run a competition to select firms to supply such services. If the City wants to sell or lease some of the property to generate revenue, it can do so.
In the hearing last week, the Lansdowne Partnership Plan was likened to a marriage. These days there are all sorts of ways in which relationships develop which are not marriages. And many of us would advise our adult children that rushing into marriage can be unwise.
If the Court decides that the LPP marriage should be annulled, that might be the best outcome for both parties.

Rube Goldberg remembered

2011-07-01T17:31:00.000-04:00

Back in the thirties and forties, there was a noted cartoonist, Rube Goldberg (and a similar British humourist, Heath Robinson) who drew pictures of very complex arrangements of mechanisms to accomplish mundane tasks. Bubbling tea kettles and bouncing balls combined with other devices to turn pages in newspapers or stir soup pots.
After sitting in court for seven days listening to the description of the Lansdowne Partnership Plan, I could not help thinking of those cartoons from the past. The lawyers from both sides described an extraordinarily complex business arrangement. But try as I might, I could not see the need for such complexity.
Much of the humour in the old cartoons comes from imagining the foolishness which would prompt anyone to assemble such ludicrous arrangements. I would have enjoyed the humour in the complexity of the Lansdowne setup, but I kept remembering that somehow I was paying for it all.
In fact, the more the complex arrangement was explained to the judge, the less funny it seemed. The complexity looked as if it were designed to conceal the reality of the arrangement rather than actually contributing to a positive outcome.

Myths about the process

2010-07-15T16:29:00.000-04:00

Today I had the pleasure of appearing on CFRA as one of the candidates running in the upcoming municipal election and I was asked about the Lansdowne Partnership plan. When I said that I considered Council's decision to proceed was unwise, I was asked to elaborate.
I commented that there are two essential steps in considering a public/private partnership.
The first is to calculate what the project would cost if done as a purely public undertaking. The second step is to solicit bids for alternative approaches from private sector partners. I said that neither of these steps had been accomplished in Ottawa's involvement in Lansdowne.
I was challenged with an assertion that a costing for a public undertaking had been prepared. My retort was that I did not consider that anything approaching a satisfactory examination of the cost of a public project had been done. I continue to believe that is the case and would invite anyone out in the blogosphere who believes this basic first step was done to correct me.

A very proper Auditor General

2010-06-20T22:51:00.000-04:00

Much of the press coverage about the Auditor General's report on the Lansdowne redevelopment scheme has been highly misleading.

In his report delivered June 17, the City Auditor General was very clear that he had a tightly defined mandate. Put simply, he took the figures provided by the proponents of the project, he accepted their hypotheses about flows of funds, and verified that the numbers could produce the results the proponents claimed. Stated more bluntly, he checked the arithmetic and but was not allowed to question whether the calculations made any sense.

Quoting directly from the AG's report -- "The audit scope was limited to an assessment of the financial information contained in the LPP proposal. The audit did not include generating independent figures, nor was it intended to provide an opinion on the development itself. As such, it does not represent an evaluation of the merits of the underlying concepts for re-development of the Lansdowne Park site as presented in the LPP proposal (e.g., a private-sector partnership, revenue neutrality, the use of property taxes, the optimal site for a stadium, etc.)."

By contrast, we have seen all sorts of press statements such as 24hours which ran the headline "makes sense" with the sub-head "City's AG gives thumbs up to Lansdowne partnership".

The reality of what our cautious City Auditor General said is quite different from the unrestrained boosterism of the local media.

Defiance of Council by City Manager

2010-06-20T22:28:00.000-04:00

Who is running things at City Hall?

I have just begun to read the report of the Auditor General which was delivered at a Council meeting on June 17. Right at the front of the report the AG notes that Council had approved a motion (77/11) on November 9, 2009 in which the City Manager was instructed to "commission an independent study to evaluate the various consequences of dedicating property taxes to a single expenditure in the City's budget and the Auditor General verify the methodology".

The Auditor General notes that "Management did not complete the independent study referred to in Motion 77/11. As such, the Auditor General could not verify the methodology."

So Council directs the City Manager to deliver a study, but nothing is done. In spite of the fact that this is one of the studies that Council directed to be delivered in conjunction with its consideration of the so-called Lansdowne Partnership plan, it seems that Council is about to proceed to consider the plan regardless.

This is the same City Manager that cancelled a design competition for Lansdowne Park even though it had been approved by Council. The City Manager failed to come back to Council to seek its approval for the cancellation -- apparently he just went ahead and did it on his own. Later he did indicate, without remorse, that this may have been an error. Such reversal of a Council decision is something that Council itself cannot do easily, but it appears that the City Manager can do as he wishes.

Now we have the second time the City Manager has defied Council and refused to carry out its instructions.

It is time for a motion of censure to be brought before Council. In addition, any further discussion of the infamous Lansdowne Partnership plan should be deferred until the report called for in motion 77/11 is delivered and considered by Council.

Puzzled by Roger and friends

2010-05-30T14:49:00.000-04:00

It is becoming complex maintaining two blogs simultaneously. The other blog is for the election (I am a candidate for Councillor for Ward 17) while this blog is all-Lansdowne all the time. At any rate, the Lansdowne issue is the big issue in Capital Ward at least until June 28, so much of my work on the election side overlaps with my Lansdowne interest.
With that explanation, here is a message I posted on my election blog (http://brocklebank.blogspot.com/)---

I would recommend reading the article in the Ottawa Citizen of today (Sunday May 30) entitled "The Lansdowne Four".
The prime spokesman for the Ottawa Sports and Entertainment Group, Roger Greenberg, is quoted as saying "What I'm not used to is people taking facts and deliberately changing them to suit their purposes. I've never seen that before. But I guess that's part of the game. I'm just not used to playing that game." I think Mr. Greenberg would do everyone a big favour by going further and listing the specific facts and how he considers that those facts have been distorted.
Another point that Mr. Greenberg could usefully elaborate is the fine distinction he is making in his statement "This is clearly not a sole-source contract. This was an unsolicited proposal."
First, I'm not sure that I understand the difference. Maybe Mr. Greenberg has a valid point; I just don't understand what that point is.
Second, I find the idea that it is an unsolicited proposal is hard to square with a passage earlier in the same article, a passage worth quoting:
The way Greenberg tells it, OSEG learned that its modest plan to lease Frank Clair Stadium from the city was a non-starter after meeting with Mayor Larry O'Brien and city manager Kent Kirkpatrick in the fall of 2007.
"Their comeback to us was, 'Guys, listen. We're not going to spend upwards of $100 million in taxpayers' money to fix up the stadium so you can play 10 games of football a year'" Greenberg recounts.
If the businessmen wanted to propose something more comprehensive, O'Brien and Kirkpatrick told them, the city would listen.
This raises two questions --
(a) Does the discussion with the Mayor and the City Manager constitute solicitation of an offer? If it does, I guess the "unsolicited proposal" description does not apply.
(b) Is the timing (autumn of 2007) correct? It is worth remembering that Council's approval of a design-to-build competition for Lansdowne was in late November of 2007. The announcement of the CFL conditional franchise was in March 2008. The suspension of the design-to-build competition was May/June 2008. The Lansdowne Live proposal indicating OSEG was moving beyond a simple stadium rental was revealed on October 17. 2008. If the timing in the Citizen article is correct, the most senior elected official of the city plus the most senior member of city staff had been in discussions with OSEG for a year prior to the public statement of the intention by OSEG to submit an "unsolicited proposal".
I share with Mr. Greenberg the desire to have the facts stated clearly. Those facts can be interpreted differently, but we continue to need facts.

Descent into cynicism

2010-05-19T09:19:00.000-04:00

I have always been a conspiracy denier. I've never thought there were spooks or reds under every bed.
But as a regular reader of the Ottawa Citizen, I am wondering about journalistic integrity at our leading, maybe-again-solvent, newspaper. I wonder if the news and editorial comment would be a bit different if I took out full-page ads every weekend to sell real estate.
I note that the blog by Maria Cook, the one and only Citizen blog that ever gives any credence to critics of the Lansdowne Live boondoggle, seems frozen in time. Strangely enough, when you take a peek, there is nothing more recent than May 4. Some say there was other material which has mysteriously disappeared.
This is not the first time that the Citizen has engaged in self-censorship. I seem to recall that there was a critical comment by the distinguished architect who designed the UofO SITE building. I'm told that his comments were not glowing praise for the Lansdowne Live proposal. It strangely disappeared, never to be seen again.
Not only is dissent being suppressed, the propaganda machine at the Citizen is in full flow, churning out praise for the latest revelations about the Lansdowne operation. As prime example, I would cite the column in today's Citizen by Ken Gray. He trots out the tired canard that the only alternative to the Lansdowne Live scheme is to do nothing and allow mould to cover the park. He claims that the tide is turning and that those who have dared to question the scheme are now coming around to buy in to the Lansdowne Live proposal.
Well, I guess I missed my chance. The Citizen and other Canwest papers were up for sale. It seems they were well and truly purchased.

Read your own paper!

2010-05-01T16:13:00.000-04:00

Life is complex and it is difficult to keep up. However this is no excuse for the apparent muddled thinking of the Ottawa Citizen editorial board. Apparently the people who write the editorials do not read the news stories carried in their own paper.

On Wednesday April 21, the newspaper carried an editorial with the title "Rush to judgement". The position taken in the editorial was that the Glebe Business Improvement Area was too hasty in criticizing plans for the commercial development at Lansdowne Park which had come to their attention.

But the editorial contained two "howlers" that call into question the capability of the authors to make any statement about the Lansdowne project.

First the editorial said "Planner George Dark and his colleagues’ proposal for Lansdowne Park isn’t expected to be unveiled until May 10". In fact it is not George Dark and his team, but rather the five design teams working on the Lansdowne Park "front lawn" -- really the backyard -- whose designs are to be received and released to the public.

It is not clear that the "master plan" which is to bring together the various separate designs, and which is Dark’s mandate, will ever be made public. As far as anyone knows, Dark’s comments on the "unique" retail experience proposed for Lansdowne are not for public consumption. Maybe George Dark and his two colleagues will whisper a few remarks in the ear of the Mayor, or may slip some information to Roger Greenberg, but there is no stated intention of telling the public what those three highly-qualified team members think.

Later in the editorial appears the comment that "It’s too bad the city didn’t conduct a study of the business effects of the new Lansdowne on Bank Street...". My understanding is that, as a participant in the Lansdowne "partnership", the city funded a study that conveniently concluded that plunking a major shopping centre in Lansdowne was just fine and would have no negative consequences for existing businesses. In addition, the city provided support for the study undertaken for the Glebe BIA which concluded that the capacity of the Glebe and Ottawa South to absorb new retailing was much more modest than that proposed by the promoters of Lansdowne Live. So to try to reconcile the irreconcilable, the city is now paying for a report which would try to bring these two studies to a common conclusion. In addition, your taxes are also supporting a further study to attempt to specify the unique nature of the shopping proposed at Lansdowne.

All these studies have been reported in the pages of the Ottawa Citizen. What is really too bad is that the Citizen editorial board has not learned of their existence.

Readers might wonder why it is necessary to define the unique nature of shopping at Lansdowne. After all, many of the shops at St. Laurent are the same as those at Bayshore and this does not seem to bother anyone. This drive to make Lansdowne unique is to justify the extraordinary financial arrangements proposed in an attempt to justify the Lansdowne Live boondoggle.

It has been suggested (sometimes with a straight face) that the property taxes on the retail component at Lansdowne will pay for the debt incurred for the stadium/arena renovation and for other city costs associated with the proposed project. This dubious idea is founded on the assumption that the retail operation at Lansdowne, built on city land offered rent-free, would never have been contemplated elsewhere in Ottawa. Moreover the retail at Lansdowne is assumed to make so few demands on city services that 75% of the taxes paid is not needed to fund services and can be diverted to the stadium/arena redevelopment.

This idea that the retail at Lansdowne is special is one of the most curious parts of the whole confidence game now underway. It is exactly the suspicion that Lansdowne will be just another mall or "power-centre" that has likely stimulated the Glebe BIA to make its concerns known. Apparently the plans indicate that the promoters of Lansdowne Live believe that a grocery store facing on Bank Street would be something new and exciting for Ottawa. Please excuse my yawn.

While I nap, perhaps the members of the Citizen editorial board would like to read some back issues of their own paper.

Transportation study - haste makes waste

2010-02-04T14:27:00.000-05:00

To the astonishment of folk close to the Lansdowne project, the terms of reference for the transportation study are to come before the joint Transportation and Transit Committee on Monday Feb. 8. Until a couple of days ago, the plan had been to have the standing committee look at the terms of reference on Feb. 17.
Obviously someone is in a big hurry.
Another indication of the perceived need for speed is the proposal that the contract for the study be let without competition. Who cares about value for money when you're in a rush?
It is said that the company that did the initial transportation study for OSEG has been preparing the terms of reference for the next study and it is the firm who will (without competition) be awarded the next study. We should learn if this is the new modus operandi around City Hall.
And without getting into a lot of the detail about the next study, I think it is being misconstrued in the media. In today's (Feb. 4) Citizen the study is described as determining "how the Lansdowne Live project will affect traffic". That is not what the Council resolution back in November demanded. The motion asked the study to ascertain "...whether or not impacts on traffic circulation and on-street parking resulting from the implementation of the LPP can be reasonably accommodated...".
The clear implication is that if the transportation issues cannot "be reasonably accommodated", the plan cannot proceed.
I believe it is important that the transportation study be required to explicitly demonstrate that the transportation issues can be addressed. Failing such a demonstration, the project should be halted.

Why now?

2010-02-04T14:04:00.000-05:00

Councillor Clive Doucet has been outspoken in his criticism of the Lansdowne Live proposal for redevelopment of Lansdowne Park. His concerns about process have seemed reasonable enough. He has shown less interest in the financial side of this give-away proposal than I would have expected, but he has been consistent in questioning the wisdom of the so-called partnership arrangement.
Now suddenly he has written to the National Capital Commission asking that the NCC buy Lansdowne Park from the City. It is not clear to me why Mr. Doucet thinks selling the park to the NCC is a good idea nor is it obvious why this idea has been sprung on the NCC at this moment.
Whether we like it or not, the City has managed to get the NCC to become a partner (maybe a reluctant partner, but a partner all the same) in the Lansdowne Live implementation exercise. The NCC was represented on the stage when the design panel led by George Dark was introduced in mid-January. The NCC is to be involved in the design competition for the "front lawn".
I consider the Lansdowne Live approach to be wrong-headed. I hope that the NCC will come to the same conclusion as it is more deeply exposed to the arrangement.
But I do not think that the NCC is going to change course instantly. A large organization does not turn on a dime.
Rather than coming out now with the idea of the NCC taking over the Park (an idea I don't particularly support), it would be much better to give the NCC ample time to become disillusioned with the process.
Possibly Councillor Doucet does not really want to have the NCC take over Lansdowne; maybe his letter is just an expression of his frustration with the process up to now. But I think it would have been better to allow public opinion to drive a wedge between the NCC and the promoters of Lansdowne Live at City Hall, and then suggest an NCC takeover.

Role of the design panel

2010-02-04T12:14:00.000-05:00

The appointment of the design panel (George Dark, Rick Haldenby and Marianne McKenna) is a positive step.
At the press briefing, the point was made that the panel would provide guidance for the design of the entire Lansdowne site. This was described as encompassing three parcels of land -- the stadium/arena, the commercial development, and the "front lawn". The "front lawn" seems to include the Aberdeen Pavilion, the Horticulture Building and all the empty land (now acres of asphalt) stretching eastward to the canal.
But we do not seem to know all the details. It would be interesting to know if there were terms of reference established for the design panel. If so, is there any reason that document has not been made public?
I would be particularly interested in knowing how the panel is to provide guidance for the stadium/arena and commercial elements. In an interview with Ken Gray of the Ottawa Citizen, Councillor Chiarelli describes the panel as "adjudicating" the design of the stadium and shopping complex. It would be interesting to learn if the panel's views are to be issued in public or if they are simply to be whispered in Roger Greenberg's ear. I hope the former.
There is also a bit of confusion about the design panel on the one hand and the competition for design of the "front lawn" on the other. I would imagine that the design panel would provide advice in writing the documentation for the competition. Perhaps they would enunciate how the "front lawn" is to relate to the canal or how the heritage of the site is to be respected.
But the design panel is not the jury for the selection of the chosen design for the "front lawn". Indeed the press release is confusing on this point. According to the press release, the City plus the NCC and Parks Canada will chose three to five design teams which will be funded to come up with their ideas. There is no indication that the design panel will be involved in that selection.
Then there will be a design workshop in March at which the three to five teams will present their ideas to a select audience. The City, with NCC and Parks Canada, will select people to be invited to the workshop. If any of the design teams wishes to have any other consultation with members of the public, that is up to them.
In May the three to five design proposals will be released to the public. The press release says this is to "foster further public comment". I find that statement peculiar because the only public comment sought to that date is the result of the public consultations held in January and February of 2008 (to which the the three to five design teams will be granted access). It is worth noting that the two public consultations held in 2008 did not result in any formal report being issued because the design consultation was shut down. In the absence of such a report, we can only speculate about what material will be provided to the design teams.
After the designs are revealed in May public reaction is to be "collected and reviewed" by the Dark design panel, by City Council, the NCC and Parks Canada. What happens to that analysis of public comment is unclear because it may have nothing to do with the outcome of the competition.
A jury is established by the City, Parks Canada and the NCC to select a winning proposal from among the three to five submitted. Having chosen one submission (with or without regard for the analysis of public comment), the recommended design is then considered by the Rideau Canal Superintendent, by a design advisory committee of the NCC, the board of NCC and Ottawa City Council. Presumably each of these four bodies of deliberation is to approve or disapprove the selected design. Whether each has an equal voice is not clear. Nor is it evident how a decision will be reached if the Canal Superintendent and the NCC Board like it, while the NCC advisory committee and City Council dislike it.
And to add to the complexity, the design panel of Dark, Haldenby and McKenna have apparently no say whatever in the selection of the winning design. Their role seems to be limited to the collection and review of comment centred on the May public disclosure of the three to five designs.

End of quiescence

2010-02-04T11:31:00.000-05:00

The period of dormancy surrounding Lansdowne Park seems to be over. Not much has happened since City Council held its nose and decided to press ahead with the grand Lansdowne Partnership Plan back in November.
On Jan. 14 we had the announcement of the design panel headed by George Dark. Both Dark and Rick Haldenby from the University of Waterloo were quoted in the press with less than complimentary comments about the plans for Lansdowne seen so far.
Then in the debate about the City Budget for 2010, the questionable provision for repairs at Lansdowne were trimmed back. This is no big surprise. Not only has Council been consistent for decades in failing to properly maintain Lansdowne, but the proposal for expenditure in 2010 included fixing up the south side stands - the part of the stadium which is slated to be demolished.
The request for proposals on providing alternative trade fair space has been issued. It was strange that staff had proposed back in November to just ask Shenkman to offer up a proposal and then to invite others to try to match or beat Shenkman. I understand that even officials of Shenkman Corp. thought this was a strange approach.
But this week, we have seen additional indication that the pressure is mounting and attempts are again being made to stampede us all to making hasty decisions. Suddenly a proposal for the needed transportation study is to be discussed by joint Transit & Transportation Committee on Monday Feb. 8. It had been thought that this would wait until Feb. 17 but now we seem to be in a big rush.
We also have had the strange letter from Councillor Doucet to the National Capital Commmission asking the NCC to purchase Lansdowne Park. It is difficult to know what prompted that letter at this time.

Aid to Councillors engaged in debate

2009-11-15T12:01:00.000-05:00

In my previous post, I presented the text of my "virulent" oral submission delivered to Council on November 12. I had submitted my text in advance (and changed only a few words in oral delivery). I also provided Councillors with a series of questions which they might wish to use in their debate on the Lansdowne Partnership Plan [LPP].

For your interest and entertainment, here are the questions:

-In the staff report for the Sept. 2 meeting of Council, it is noted that "The proposal also included the development of complementary commercial space, the revenue streams from which were identified as necessary to offset the operational costs of the stadium and civic centre functions." Do such offsets represent a subsidy to tenants and users of the stadium and civic centre, the principal users being the professional sports tenants? As such does this represent a subsidy to professional sports teams as forbidden in motion of Council of April 22?
　
- In the motions adopted at the meeting of Council of April 22, it was resolved that "the City’s contribution to the revitalization of Lansdowne Park be limited to a dollar amount to be established during the negotiations, to be based on not increasing the overall cost to the taxpayer." It is proposed that the budget allocation for capital costs in the future be increased from the present level of less than $2 million to approximately $3.8 million. Does this represent an increase in overall cost to the taxpayer?

- The staff report to the Sept. 2 meeting of Council stated "The financial due diligence carried out by the City and its consultants on the OSEG proposal has demonstrated, among other things, that the City would be receiving fair value under the Plan." Because there was an absence of competitive bidding, the usual assurance of fair value was not available. What other procedures to demonstrate fair value were employed? Are those studies available for scrutiny?

- It is proposed that Council await a review of the financial assumptions and projections of the partnership proposal. Should the Auditor General be required to prepare such a report using his office’s resources or should he be provided with resources to retain outside expertise to prepare such a report? Is Council prepared to wait until May 2010 for such a report?

- In the staff report for the Nov. 12 meeting of Council it is noted that the proposed Stage Three would involve "...construction of the retail and parking components. Subsequent to this, would be the Civic Centre and Frank Clair stadium rehabilitation...". Why does the rehabilitation of the civic centre and stadium need to await completion of the retail and parking construction?

- In view of the fact that there is no zoning or like issue which could be appealed to the Ontario Municipal Board, is there any reason that the rehabilitation of the civic centre and stadium could not be initiated immediately?

- It is proposed that the Implementation Plan include a "detailed assessment of the forecasted property tax revenues to be paid by retail and commercial development proposed by the LPP with the Municipal Property Assessment Corporation...". Will this examination reveal whether the land value under the retail development will be subject to property tax or will remain exempt from tax as City property?

- It is proposed that a termination agreement form part of the final project agreement for the LPP. Can the City terminate the process now without incurring additional cost?

- It is intended that the partners of the LPP provide "programming that suits Council’s objectives for the site". Is there at present a document setting forth Council’s objectives for the site or is this document yet to be written?

- It is indicated that a Municipal Service Corporation could be created under the provisions of the Municipal Act, 2001 and its regulation 599/06 which forbids the creation of subsidiaries. There is also reference to the Ontario Business Corporations Act and the creation of Hydro Ottawa (which clearly does have subsidiary companies). What exactly is the recommendation for creation of a corporation? Which legislation is applicable to the LLP?

- It is indicated in the staff report that the requirement for public consultation regarding the establishment of a Municipal Service Corporation has been fulfilled as part of the LPP featured in the six public consultations held in September and October. How did the prospect of an MSC feature in those consultations?

- It is proposed that shuttle services be instituted to bring patrons to events at Lansdowne from satellite parking locations. Is it envisaged that by-laws protecting the monopoly over transit service enjoyed by OC Transpo will need to be altered to allow such shuttle service?

- Parks Canada is reported as having a "willingness to work with the City to achieve Council’s objectives for the site". Has an outline of Council’s objectives for the site been conveyed to Parks Canada? Is this document available for examination?

- It is proposed that the City’s property of 59 acres adjacent to the Albion Road site of the Central Canada Exhibition Association (CCEA) be transferred to the CCEA for use as parking. Is the property to be sold or granted to the CCEA? What is the value of the property in question?

- How was it determined that the requirement of the trade and consumer show industry "...would create significant conflicts to achieving the other goals set out by Council for Lansdowne...". Which specific goals create conflicts?

- It is indicated that "...purpose built trade and consumer show facilities in most cities are usually located outside the central areas of thos cities..." How was this determined? Is there a list of cities studied to produce this statement?

- Why should the search for an alternative site for trade and consumer shows be initiated with Shenkman Corporation particularly? Are there no other landowners in Ottawa who could have property which could be used for this purpose? Why is it not intended to issue a general request for proposals?

- If no alternative site for the trade and consumer show industry is identified, does this render void the LPP and require that show space be provided at Lansdowne?
　
- It is proposed that the lease for the stadium be a "net net lease". What is this exactly and why is it proposed? Are similar arrangements proposed for the civic centre?

- At the public consultations held in September and October, "city staff and other subject matter experts were available to receive input from residents...". Was any report prepared about the input received at those events by staff and experts?

- In the motion of Council adopted on September 2 authorizing public consultations reference is made to "...public consultation plan included in the Lansdowne Partnership Plan". In the plan document appears the the text "The format would be a series of open houses, with the opportunity to ask questions of City staff and the private sector principals. Similar to the Official Plan Review’s ‘City Café approach, these sessions would allow for a comprehensive discussion of the proposed redevelopment...". Did the public consultations conducted in September and October follow the procedures set out in the Plan and subject to Council motion?

I will be following the debate with interest to see if any of these questions arise. If nothing else, it would be a way for a Councillor to give the impression that he/she had actually read some of the documentation.

Press the reset button!

2009-11-15T11:48:00.000-05:00

On Nov. 12 I appeared before the Committee of the Whole and delivered the following speech.

Quote
In my view, the appropriate decision is to "press the reset button". I urge you to end this process now and stop wasting resources on a faulty approach. I am not challenging the assertion that you have been acting legally. I expect you to avoid illegality; I hope that you seek to make wise decisions.
So I have written my remarks with the objective of contributing to your debate. Feel free to steal any ideas you like.
Back on April 22, Council authorized negotiations with Ottawa Sports and Entertainment Group. You provided an impossibly weak negotiating position to the City team involved in the process.
As far as I can see, Council’s instructions were – come back with a deal, any kind of deal. You did not put the City negotiating team in a position in which they could walk away from the table. Such negotiations result in one-sided arrangements.
And now that the outcome of the negotiations is before you, here are some pointed questions I urge you to address in your debate.
Why should taxpayers stump up $110 million for upgrading the stadium and arena? The correspondence from the Canadian Football League does not call for luxury. The documentation before you does call for some work on the facilities. It notes that strengthening of the raker beam is required to end temporary loading restrictions, but with those restrictions the stadium can be used. It calls for cleaning and painting the stadium roof and addressing the problem of water infiltration. The documents do not specify the need for comfy new seats or crystal chandeliers in the VIP boxes. And it is not just a question of inflating the cost of the upgrades, this also delays until 2013 the possibility of having a football (or soccer) team on the field generating revenue.
Why should taxpayers provide $19.3 million for parking? None of this parking is for the stadium or civic centre. Those parking requirements are fully grandfathered – what ever that is supposed to mean. No, the parking paid for by the city is for the customers coming to the shopping centre and cinema. I expect that small business owners who are forced to satisfy the zoning by-law’s onerous demands for parking might question why their competitors receive this kind assistance.
And if the parking requirements for the stadium and civic centre can be grandfathered because those facilities exist today, why could the same not be done for the trade and consumer show industry?　
Consider the fundamentals. In a risky business venture, a prudent businessman will attempt to limit his financial exposure by minimizing the investment up front. In the Lansdowne Partnership, the investment in upgrading the stadium is the most risky part of the project. That is paid 100% by the taxpayers but we have seen no real analysis to reduce this up-front investment.
Now some people consider that the project at Lansdowne is "revenue neutral" and will not cost a penny. I submit more of our citizens believe in the tooth fairy than in the fiction of "revenue neutrality".
For decades Council has consistently failed to adequately provide for upkeep at Lansdowne but now your solemn pledge to do so in the future is bankable? Not at my bank!
Moreover you are contemplating a new policy in which property taxes can be designated to support specific city undertakings. Please do not take this path. If you truly believe that taxpayers’ money should go into rehabilitating Lansdowne, say so. Do not hide behind this Enron-style accounting sleight-of -hand.
Finally, the only financial return to the city from this partnership comes from net cash flow dribbling down through the famous "waterfall". Note that the Auditor-General has pointed out that there is no definition of "net cash flow". It is whatever is left over after OSEG has been fully reimbursed for its management, coordination and other services (of which I am sure there will be many).
In conclusion, it is time to abandon the Lansdowne Live detour. We have wasted eighteen months on this fruitless exercise. Get back on track by making decisions about what is to be done and how it will be funded. Take more than a passing interest in the financial impact on the taxpayer. Put to rest ideas of inventing new ways of cooking the books. Secure good value for the tax dollar. Press the reset button!
Unquote

I guess my delivery (by which I managed to fit all this into five minutes -- not easy -- try reading it outloud with a stopwatch) was a bit vigorous. At any rate, Dave Reevely, writing in his blog "Greater Ottawa" described it as "virulent". Well I probably should be happy that he saved "violent", "vituperative", "vitriolic", "voluble", "virus-spreading" and "vulgarizing" for another day. However I wouldn't have minded "vulpine".....

Councillor Chiarelli and innovative accounting

2009-11-03T14:55:00.000-05:00

In todays "Metro" Councillor Rick Chiarelli is quoted as saying that Ottawa has three possible choices with respect to the redevelopment of Lansdowne Park. He defines the choices as:
1. buy into the Lansdowne Live proposal by OSEG
2. let the stadium rot and spend $4 million per year for the arena and salons
3. tear down the stadium and civic centre and install a lawn for $40 million with the option to build a stadium elsewhere for $200 million.

The Councillor then argues that going with the OSEG proposal will cost nothing because the debt will be paid by a portion of the city's revenue from the commercial development in the proposed partnership.

In fact there are many other possibilities than those suggested by the Councillor. Moreover the way that the financial arrangements have been described is simply incorrect.

First consider other possibilities.

Instead of maximizing the investment in the stadium, exposing the greatest investment to a risky proposition, it would be possible to address the real safety issues of the stadium and civic centre for a smaller amount of money, do appropriate minor renovations and get a team on the field quickly. With less investment at stake, it would be possible to see whether pro football succeeds, and if the transport and other problems associated with the use of the stadium can be resolved. Assuming football is a success and the transportation issues are overcome, we could then go on to undertake a series of upgrades of the stadium (and civic centre).

Another possibility would be that we do the minimal work on the stadium to get a team on the field and we discover that the transportation issues really are serious. Because we have not invested such a great sum in Lansdowne, it would then be possible to consider a stadium at another location.

Obviously there are many other alternative ways of redeveloping Lansdowne Park, including selling part of the property, rather than engaging in the complex lease arrangement for 30-50-70 years.

Turning to the discussion of financing, it is here that we discover that Councillor Chiarelli is totally out of his depth.

Even if you accept the dubious proposition of dedicating property tax revenue from the commercial development to carry the cost of the debt incurred in upgrading the stadium and civic centre, the Councillor still does not have it right.

We are told that the proposal involves the City taking on debt to be retired over a 40 year amortization. The annual cost of that debt is said to be $7.1 million. The principal source of funds for the $7.1 million is not from the shopping centre's property taxes but rather the $3.8 million in maintenance which the City would need to spend to continue the present programme activity at Lansdowne. This is the $4 million to which the Councillor refers in the article. Yes we have never adequately maintained Lansdowne in the past but it is argued that we will in the future and we are so sincere in our dedication that we can count on saving $3.8 million forever.

So the property taxes to be designated to pay down the debt load borne by the City will only cover a minority of the annual debt servicing cost of the proposal. And here we enter into the whole question of designating property tax revenues. If it can be done for the redevelopment of Lansdowne Park, I would suggest it can be done for anything. I might like marble sidewalks in front of my house -- this will cost nothing because my property taxes can be designated to pay for it. And what does everyone else want to do with their property taxes???

The fact is that Mr. Chiarelli, for reasons that escape me, has become prime cheerleader for the Lansdowne Live proposal from OSEG. He doesn't let reason or logic stand in the way of his advocacy. This is a pity; we expected more from him.

Catching up...part 2

2009-11-03T12:48:00.000-05:00

My speech text from October 26 continues...

So that is my abbreviated history of the Lansdowne issue. What does it say to me about the conduct of civic affairs in Ottawa?

My first concern is that we no longer have any idea who is running things at City Hall. Council passed a motion to run a competition. Staff began work on such a project. Then the competition was shut down without reference to Council. The City Manager has since apologized to Council saying that it would have been more appropriate to seek Council’s approval.

When questioned the City Manager says the decision to stop work on the competition was his alone. While I think it very gentlemanly of the City Manager to assume that responsibility, it is widely believed that the Mayor (to whom the City Manager reports) prompted the suspension of the competition process.

Indeed there was an exchange at a Council meeting in which the Councillor for this ward asked "who is running things around here?" and the Mayor responded "I am".

There is some concern that the Mayor is not attuned to the procedures of public administration.

At any rate, whether it is the Mayor’s doing or not, the process under which the Lansdowne project has been advanced has raised many questions.

The normal practice in undertaking a significant capital project would be to issue a Request for Proposals for specific work to be undertaken at City expense. This has not been done.

It has been maintained that the City is in receipt of an unsolicited proposal for redevelopment of Lansdowne Park.

You might question whether this is really unsolicited, considering that the Mayor called for it in public statements, considering the competitive process was suspended in anticipation of a proposal (and that process remained suspended for 3 ½ months awaiting the proposal), and considering that the City held the October 20 proposal until March 6, possibly discussing it with the proponent, before asking that the proposal be made definitive for examination.

The City has a procedure for dealing with unsolicited proposals called the "Ottawa Option" That procedure would lead to a form of competition. That procedure has not been followed.

It is suggested that the Lansdowne project is a public/private partnership (commonly called a P3). The city has a procedure for P3's. That procedure calls for competition among private groups interested in forming a partnership with the City. That procedure is not being followed for the Lansdowne project.

No it seems to me that the City of Ottawa is blithely sailing off into the Twilight Zone. There are no procedures; you can do whatever seems expedient.

I don’t think we have had a meaningful debate on the matter at hand. Considering the money involved, Council debate has been less than satisfying.

Of course I can’t blame the Councillors too much, considering the way they have received the material for debate. Normally Councillors and their staff receive detailed documentation in advance of a meeting of Standing Committee. The public also is given an opportunity to be informed because documentation is posted on the internet for all to read. In the case of the Lansdowne, and the wider stadium discussion involving the Kanata project, the documents were only released as the meeting was underway. In the Glebe Report I criticized some Councillors as Olympic-class speed-readers – they came out in effusive praise of the hundreds of pages of documentation they had received minutes before.

But Council had been asked to decide whether a stadium was a priority. It proved possible to sidestep that question and declare that Lansdowne was the city’s priority stadium proposal. This was a convenient way of avoiding any debate about whether other city activities would be sacrificed to permit investment in a stadium project.

Even if Council had decided that a stadium at Lansdowne was the highest priority for the city, even if we stopped purifying the water, inoculating against the flu, halted transit service and stopped paying the police, it would have been possible to consider whether there are alternatives to the plan presented by the Ottawa Sports and Entertainment Group.

Instead the public discussion in Ottawa has been on the basis of support the Lansdowne Live plan or leave Lansdowne to rot forever.

Even worse, some of the debate has been cast as good citizens of Ottawa versus the selfish inhabitants of the Glebe. The positions of the Glebe Community Association have been distorted. The concerns of the residents living next to the project have been dismissed as illegitimate. Surely it is possible to carry out a discussion about a city issue without getting into a blame game. We have enough divisiveness in this city and should be building bridges rather than emphasizing our differences.

I am concerned that our City which should be acting as a neutral party is deeply engaged in this arrangement. This is not the first time that this has happened. You may recall that the City became a party to the development of land between Kanata and Stittsville. It was in the City’s interest (here I should emphasize short-term interest) to minimize the dangers of flooding and to obscure the possibility that west Kanata development was possible only because of questionable investigation of water levels around the Carp River.

In the much ballyhooed Lansdowne Park Partnership, the City saw itself as a partner, committed to the product of the negotiations held over the summer of 2009.

Finally, I worry about the lack of investigative journalism evident in this matter. Susan Sherring of the Sun has asked sensible questions and Maria Cook of the Citizen has followed up to find out if supposed participants in the partnership have really signed on. The CBC has attempted to remain neutral. But none of the journalists has gone very far in their investigations. I recommended to a reporter from the Citizen that they bring an accounting firm to look at the assumptions in the business plan. Nothing has happened. I guess if I had a business which took out full page ads in the Saturday papers we might get more action.

So in summary my concerns are:
- Is our elected Council running the city or has city staff seized control?
- Do we follow any established procedures in conducting city business or do we do whatever pleases us at the moment?
- Is there some impediment which prevents Council from debating and deciding on meaningful questions?
- Are members of Council being manipulated?
- Is there some reason we fail to consider alternatives to single proposals before us?
- Must the public debate be on a "take it or leave it" basis?
- Do we need to denigrate our fellow citizens to engage in debate?
- Has the City has lost its role of neutrality? Has it become a "partner" incapable of playing a regulatory role?
- Have all our investigative journalists departed the scene, appointed to the Senate or otherwise removed and silenced?

So with all that, over to you. What do you think?

Catching up...

2009-11-03T12:34:00.000-05:00

It is difficult to keep up a blog and write speeches at the same time. But possibly some readers out in the ether might want to follow some of the remarks I crafted. With that hope in mind, this posting and the following are notes from a speech I delivered on October 26. The first portion deals with the history leading up to the current discussion of Lansdowne Park redevelopment. The second installment is my personal analysis of what the Lansdowne example may show us about the state of civic affairs in Ottawa.

So this is part one...

My purpose today is to bring to your attention some of my concerns about the way our city conducts its affairs. The device I would like to use to get you thinking about such matters is to explore the current controversy surrounding the redevelopment of Lansdowne Park. Using that as an example, I would hope to engage you in a discussion in which you would share your own views on city decision-making.

In case you have been away, or only read the Globe and Mail and no local papers, I had best start by giving you a brief (if that is possible) background on the Lansdowne issue.

Let’s go back to May of 2007. The press reported that an attempt to bring back pro football to Ottawa had been abandoned by a group led by a former Rough Riders player. The Commissioner of the Canadian Football League was quoted as saying that he had not spoken to the Mayor of Ottawa but now that the Palmer-led proposal was off the table, he would do so.
This was followed by the Mayor’s statement that he understood that people with "deep pockets" were looking into bringing pro football back to Ottawa.

In November 2007 council adopted a motion to conduct a design/build competition to plan for redevelopment of Lansdowne Park. Under a program entitled "Design Lansdowne", two well-attended public consultations were conducted by City planning staff in January and February of 2008.

Then in late March it was announced that the CFL had granted a conditional franchise to a group of business people to establish a pro football team in Ottawa.

Spokesmen for the football consortium were asked if they proposed to enter into the competition. They indicated that they had no such intention. When asked if their interest was in land development rather than football, they denied that that was their motivation.

Rumours began to circulate in the city that Frank Clair Stadium was not in good shape. At the same time, activity on the design/develop competition seemed to slacken off.

In mid May 2008 members of City Council were informed that work on the competition had been delayed. For some of us this was a disappointment because we were expecting that the "design brief" for the competition would soon be released. We thought that, after public consideration and council approval, the design brief would serve as the basis for the competition.

In late June 2008 members of City Council were informed that work on the competition had been suspended pending review of a proposal from the football consortium and further investigation of the condition of the stadium and civic centre. It was announced that the lower south side stands of the stadium were to be demolished. Councillors were told that City staff expected a detailed proposal from the football consortium in mid-July.

In fact it was only on October 17 of last year that the football consortium spelled out their ideas. A press conference was held and a proposal entitled "Lansdowne Live" was presented. The Lansdowne Live proposal was not simply about renting the stadium to put on football games, it involved a major rebuilding of the stadium, demolition of several buildings on the site and their replacement by commercial activity, and a tentative proposal for an alternative use of the Aberdeen Pavilion – an aquarium. It was clearly the intention that the consortium take over Lansdowne Park and transform it.

As we went into last winter, word circulated that another group was about to propose a soccer stadium for Kanata. This led to the public debate being reshaped into a contest between two stadium concepts.

Possibly anticipating this stadium discussion, the city had contracted for a study which was called a "needs assessment and location analysis for multi-purpose sport and entertainment facilities". The report looked at what was required to have an outdoor stadium.

The "needs" report was discussed in Council committee in March, and City staff brought forward a procedure for considering the two unsolicited proposals for stadium projects. We learned that the formal name of the Lansdowne Live group was Ottawa Sports and Entertainment Group (OSEG).

On April 6 the staff report on the two competing stadium proposals was released. City staff said that both proposals were acceptable but the Lansdowne project was preferred over the Kanata proposal, because the Lansdowne proposal was judged to offer a better business plan and less risk to the city. But the only insight that public had into the business plan was in the staff report.

On April 20 the staff report on the two unsolicited bids for stadium development was discussed by Council committee. Instead of discussing whether a stadium was a priority for the city, the committee sent other motions forward for Council consideration two days later on April 22.

A motion to go ahead with discussions with the Kanata soccer group was put on hold pending talks about Lansdowne.

Motions to proceed with negotiations on Lansdowne were adopted. Negotiations were proposed to go on for 60 days followed by public consultation prior to a final debate at Council. In fact the negotiations stretched out for more than double that time. The results of the negotiations were released on September 2 and the proposal was billed the Lansdowne Partnership proposal.

Six public events arranged by the City from September 28 through October 6. Many people from the Glebe attended the September 28 event at Lansdowne Salon A. That consisted merely of an opportunity to for residents to wander about and ask questions of various officials and others stationed around the room. Beginning from the third such event on September 30, the events featured a question and answer session in which the City Manager (the head of city staff) answered questions.

It is worth noting that the plan released on September 2 is not identical to that presented in October of last year. There seems to be more commercial development on the site and less provision for amateur sports than in the preliminary plan of a year ago. But the September information package provides more detail on finances and governance proposals.

Central to the "partnership" proposal is a concept which has been titled "revenue neutrality". I believe this concept is faulty but it is important that you understand it because this is the idea which is driving much of the current discussion about making further changes to the September proposal.

Back in April, Council authorized negotiations with OSEG but established several conditions. One condition was that "the City of Ottawa’s contribution to the revitalization of Lansdowne Park be limited to a dollar amount to be established during the negotiations, based on the principle of not increasing the overall cost to the taxpayer".

But you might ask - isn’t it proposed that the City invest a large sum -- $129.3 million to be exact – in this undertaking?

In order to pretend that such investment costs nothing, some very fancy accounting is proposed. First you take money from city parking reserves. Maybe no one will notice. Then you declare that you really, really intend to take good care of Lansdowne in the future. The city has failed to maintain the place in the past, but because you are really, really serious this time, you claim that you will spend millions every year going on into the future. As part of your innovative accounting you count all that money that you promise to spend as if you truly spend it. All that money then is a credit because you won’t in fact need to spend it because you have rebuilt the facilities. Then the best trick of all is that you say that none of the shops or other businesses to be established on the Lansdowne site would otherwise have been created. You convince yourself that the shops and other businesses were created by the City’s investment in the stadium etc, you take most of the property taxes to be paid by those businesses and use that tax revenue to carry the debt load assumed by the City.

This complex and questionable arrangement is the reason that it is said that if the commercial development on the site goes down, the cost to the City goes up.

Some people accept the concept of "revenue neutrality"; some others, when in polite company, have been heard to use the term codswallop.

Another condition applied to the negotiations by Council motion was that "revenues generated from the revitalized Lansdowne Park not be used to subsidize any professional sports teams".
There are many ways in which a subsidy can be granted or can be concealed. One easy way to subsidize is to charge ridiculously low rent. Of course no rent is proposed to be paid to the city for the land under the commercial development, but I would argue that the hockey and football teams are being subsidized in their rent for the stadium and arena.

Am I opposed to a subsidy? Am I opposed to a stadium. Not necessarily, but I would like us to approach issues in a straight forward way, not deceiving ourselves.

Right now various members of city council are in the process of tinkering with the "partnership" proposal. They have not yet received a report on the public open houses. Nor have they a summary of the comments made by the public on the online consultation conducted for the City. Nevertheless bits and pieces of the proposal are being changed in an attempt to concoct an arrangement the public will find more palatable.

...This speech text continues in the following post.

Distractions and perplexities

2009-10-14T14:26:00.000-04:00

So what is the deal for Lansdowne that is up for discussion anyway?

The media is carrying stories indicating that Councillors are actively working to restructure the great Lansdowne Partnership which was proclaimed with such ballyhoo on September 2. It is surprising that some Councillors who rushed to praise the proposal on the moment of its release (and, in one case, lauded the arrangement prior to seeing it!) are now working to shore up the plan and patch its weak points.

To be fair to OSEG, the private sector players in the deal, they have been consistent in affirming that there is some flexibility to their proposal. However today, Mr. Greenberg, as spokeman for OSEG, indicated that he is coming to the end of his patience. He wants Council to sign on the dotted line in early November, commiting the City to the arrangement.

I suspect that much of the activity by Councillors is in reaction to the possibility that OSEG will walk away. No doubt some Councillors are so closely associated with this plan that they will offer further concessions to OSEG to keep them in the game.

The principals of OSEG say that their interest is in bringing football back to Ottawa. Put aside all the discussion about other matters and talk about what they claim is their objective.

Unfortunately the entire discussion is obscured by the notion of "revenue neutrality". In order to generate tax revenues to pay for the stadium and civic centre renovations, some Councillors are convinced that they need to grant land for a shopping centre, offices, a hotel and residences.

Mr. Greenberg is right when he says that if the shopping centre is reduced in size, tax revenues would be diminished and (using the crackpot accounting favoured by some) the delicate balance of "revenue neutrality" would be disturbed. Mr. Greenberg goes on to say that with a reduced shopping centre, the "gap" in tax revenue could be made up by authorizing offices, a hotel and residential development.

All this discussion is akin to the medieval issue of how many angels could dance on the tip of a pin. The concept of "revenue neutrality" is simply invalid. We should stop talking about a nonsense topic.

The real question which Councillors should be considering is whether they are willing to commit 129.3 million dollars. Any Councillor who votes to support that should explain why that is the most important investment for the City to make -- in particular, why it trumps fixing the sewer system or improving transit. He/she should also explain why such a large investment is required.

If the purpose is to extend the use of the civic centre, they should ask exactly what that would cost. They should eliminate the frills and invest in the basics, if they want to do anything at all. Then they should look at the stadium. If they really want to have a working football/soccer stadium, determine how little could be spent to make it workable. Invest that minimal amount and see if football/soccer is viable. From the revenue generated from the civic centre and stadium make further investments as appropriate.

But this discussion about restoring the civic centre and stadium should be divorced entirely from the concept of "revenue neutrality".

There is no reason to size the commercial development on the site to generate a specific amount of property tax. If there is a market for the commercial enterprises proposed, they will be built somewhere and taxes will be paid.

Truth squad let loose

2009-10-07T15:54:00.000-04:00

What a pleasure it is to see Roger Greenberg writing in today's Citizen under the headline "Here's the truth about the Lansdowne plan". I guess I should commit to electrons some of my thoughts as I read his article.

Mr. Greenberg begins by writing about the public consultations which he describes as "disrupted (some say hijacked) by an orchestrated campaign of misinformation". I would suggest that the disruption was not affecting a public consultation; it was a brief interjection into a concerted sales campaign. Surely Mr. Greenberg is referring to the use of the megaphone at the event on September 29, a sales pitch for the partnership which was disturbed by calls for members of the crowd to express their views.

He then complains about the "dance of deception" and the "hoedown of hokum" at subsequent events. (This leads me to inquire if Mr. Greenberg has fallen under the evil influence of the ghost writer for the late and unlamented Vice President of the United States, Spiro Agnew, who spoke of the "nattering nabobs of negativism".)

He says some Glebe residents would like to defeat the Lansdowne Live approach in order to see the sports facilities levelled and a real park created in its place. He is right. There are such people in the Glebe. There are also people in the Glebe who want football and who see the complex proposal for the Lansdowne Partnership as unnecessarily delaying and putting into jeopardy the restoration of the stadium and civic centre. Those people are also speaking out and causing angst among the supporters of the OSEG approach.

He says that businesses in the neighbourhood fear competition and want to eliminate the threat. Yes, that is true. There are many who consider that subsidized competition is indeed a threat. The merchants who feel threatened own or rent the land under their shop; they don't get it free under a sweetheart deal. They pay property taxes on the land and on the building that houses their shop. They don't sit on city land which is exempt from tax. Their taxes go into keeping the city running not into subsidizing their landlord's other business interests. Yes, for all those reasons they fear the competition.

And probably the merchants are also a little fearful when they see that a massive rezoning of their neighbourhood is about to take place which will completely change the uses that can be placed on the land. Their fear is that the rezoning is not going to be handled according to normal and proper procedures. Why? Well, nothing else about the Lansdowne project has followed the established procedures, so there is no reason to imagine that due process will prevail in the future.

Then Mr. Greenberg is proud to announce that a mere 13.8 percent of the total surface area of Lansdowne is to be occupied by new commercial development. Of course the figure would change if we removed from the calculation the stadium and civic centre which is to be handed over to OSEG rent-free for 30 years. (Oh sorry, tiny little rents are to be paid by the football and hockey team.) We should also rule out the Aberdeen Pavilion which is to become restaurants -- somehow that is not commercial (but it is again rent-free).

If we are to do comparisons, I wonder what the ratio of buildings to total site is for a power centre like South Keys. I doubt that the buildings cover more than 40% of the total surface area (and do you include the O-Train stations or the bus facilities as part of the site?).

Mr. Greenberg acknowledges that a food store would compete with other stores selling food. I find it hard to see how this admission squares with the argument that the new retail at Lansdowne is unique. I thought the new food store would specialize in the exotic and foods not available elsewhere in Ottawa. Fresh durian and sweetsop was the sort of thing I expected.

The one aspect in which I really do agree with Mr. Greenberg (and this is truly a no-sarcasm break) is that some activity along Bank Street (small shops, cafes etc.) between Holmwood and the bridge over the canal would be desirable. It is boooooooooring to walk along that expanse of Bank Street now.

On parking Mr. Greenberg notes that there is proposed to be ample parking for the customers at the retail shops. He is right. There is also parking for the residents on site, for the office building and the hotel. Oh! We forgot there are also the restaurants in the Aberdeen Pavilion. Oh? We forgot there are also the hockey fans in the civic centre. Oh! We forgot there are also the fans in the football/soccer stadium. Too bad we made no provision for any of them to park.

The City zoning by-law contains provisions for parking. I personally think these aspects of the zoning by-law are useless, but our Council and our City planning experts do not agree. The by-law says you are to have one parking space for each four seats in a stadium and the same for an arena. With 24,000 seats in the stadium and 10,000 seats in the arena , this would indicate that 8,500 parking spaces should be available for these uses.

The Delcan report prepared for OSEG indicates that all of those parking spaces (plus any for the Aberdeen Pavilion or the Horticultural Building) are "grandfathered". I hope your grandfather lives close to Lansdowne so you can park at his house.

Mr. Greenberg indicates that the city has "developed a comprehensive transportation plan" to cope with access to the redeveloped Lansdowne Park. That sweeping statement is hard to reconcile with the much more cautious statements by the City Manager about the need for a real transportation plan to support the Partnership proposal.

But Mr. Greenberg notes that the removal of the Exhibition and the banishment of the trade and consumer show industry will eliminate all sorts of traffic. OK, point taken. But does the elimination of these demands for vehicular access justify cutting the parking on site by half while adding multiple uses which will stimulate demand for parking? (This is a debating point, I really do not want to encourage the expansion of parking, but I question the validity of Mr. Greenberg's argument.)

In the article Mr. Greenberg emphasizes that the City will continue to retain ownership of the land. He says that after 30 years the City's debenture will be largely paid off. This raises an interesting question for me. If a real estate developer has a lease for 30 years (even a lease that produces no rent), is it common to amortize the underlying financing over 40 years? After 30 years, if and when the commercial buildings revert to the City, the City is still paying down the debt for fixing up the stadium & civic centre and building the parking.

But then Mr. Greenberg (maybe inadvertently) hits us with the whopper. He says "the debenture is to be paid back from the annual funds currently allocated for maintenance at Lansdowne ($3.8 million) to continue current programming, supplemented by 75 percent of the municipal tax revenues generated by the new retail development ($3.2 million)."

Surely Mr. Greenberg you don't expect us to fall for that. Council has never adequately funded maintenance of Lansdowne. You cannot sensibly assume that they would fund it in the future -- the $3.8 million does not exist.

Anyway, what is current programming at Lansdowne? Unless this is defined, we do not know what it costs to continue it. Obviously we can let the stadium deteriorate because there is no current programming there. (You do not need thousands of seats to look down on an inflated dome in February.)

As for the idea of dedicating property tax, this is not done and should not be done. If you want to allocate property tax, why don't you reallocate the property tax on the St. Laurent shopping centre to pay down the City's debt? The tax paid will be greater and we don't have to wait for years to start getting the cash.

And I don't care if Mr. Greenberg is tired of Councillor Doucet's complaints about the cancellation of the design/develop competition. Why should the principals of OSEG care? They stated clearly that, if there was to be a competition, they would refuse to compete. I don't think that Councillor Doucet should desist; I think it is up to OSEG to explain why they ran and continue to run away from the idea of competition.

In conclusion, Mr. Greenberg protests "the bogus feedback from the meetings' hijackers". My own view is that it is Mr. Greenberg that "doth protest too much".

Around and around - a subsidy...

2009-10-04T22:32:00.000-04:00

We seem to be lost in a circular debate. Could we all agree that leaving Lansdowne Park in its present state is unacceptable?

If we all agree, the issue is - where do we go from here.

One possibility is to simply buy into the single proposal we are being offered. Put in a deluxe stadium at taxpayers' expense, give away acres of land and hope for the best.

Another approach would be to ask what the people of Ottawa want. Canada 411 indicates that there are 619 shops in Ottawa associated with "sports", only nine associated with "football" and thirty-seven associated with "soccer". Does this mean that there is a severe shortage of shops to cater to the fans of a new CFL team? Is that shortage so severe that the City needs to come to the rescue and address the needs of those consumers by providing rent-free land for such retailers?

I suspect that there are many people who would like to see pro football return to Ottawa. Probably this is less than a majority, but they are numerous. Should they be denied? No, I don't think so. But to what degree should the rest of us, who are not so passionate about football, subsidize the football fans?

There are all sorts of interests in our community. Some people are keen on chamber music; some are partial to capoeira (Brazilian martial arts); others are oenophiles. To my mind, all of these interests, are just as worthy of support as CFL football. All are probably of interest to only a minority.

But no one has suggested that the wine show take over Lansdowne year round to satisfy the oenophiles. For 129 million dollars we could build a world-class collection of wine. Strangely enough, there is no proposal for an Ottawa City wine cellar at Lansdowne Park.

But there is a proposal to take remarkable measures in support of football.

Would the supporters of football be prepared to line up with the rest of the recipients of city subsidies for the yearly begging process at budget time? Why not?

I would like to see the CFL football team appearing with the Barrhaven Highland Dancing Society asking for its annual grant from the city.

Does this solve the question of what to do with Lansdowne Park?

No it does not, but it is a beginning to analyse one small aspect of the debate.

Definition is a problem

2009-09-30T23:07:00.000-04:00

Maybe I am dazed and confused by attending too many consulations on Lansdowne but there seem to be some obvious loose ends. We need better understanding of two questions of definition in the Lansdowne redevelopment proposal.

The first is defining what is needed to upgrade the stadium and civic centre. It seems that OSEG, the project proponents, are defining what is to be done. Just how crucial are VIP suites to the success of football? How important is it to install wider seats in the stadium?

The reason for my concern is that OSEG decides what is done; OSEG gets the contract to do it and the city pays for whatever OSEG defines as required. We do not seem to be challenging the extensive nature of the renovation. If we look at some other apparently successful CFL football teams and OHL hockey teams, we might rethink what needs to be done.

My second concern about definition centres around the phrase "net cashflow". The panels on display at the public consultations say "The proposed partnership agreement would see the net cashflow of the stadium, retail and parking operations shared between the City (MSC) and the OSEG according to a formula." The formula is of course the famous waterfall which provides for the City to be paid last.

But maybe being paid last does not matter if there is no "net cashflow". Depending on how we define "net cashflow", it would be easy for OSEG to charge management and like fees to such an extent that no "net cashflow" is ever generated. My examination of the documents released to date give no indication that terms and conditions for establishing "net cashflow" will be established. Failure to do so could be the equivalent of signing a blank cheque.

Clearer definition is needed.

Greening or getting the green

2009-09-28T13:34:00.000-04:00

Planting one blade of grass in the acres of asphalt at Lansdowne would constitute greening (and an improvement in my mind) but it is not certain how green Lansdowne will become. Nor is it clear who will get the green (i.e. the money) for any greening initiative.

In today's Citizen, Kate Jaimet writes under the title "Green theme for Lansdowne" that there is controversy over the plans for the proposed "front lawn". This is described by Graham Bird, a consultant to the City, who has emerged as one of the most enthusiastic salesmen for the proposal, as an open grassy area only used for parking on rare occasions .

People who are less enamoured of the proposal question whether the "front lawn" can be used for much other than parking.

One of our problems is that it is not certain what is actually proposed for the "front lawn". There has been talk of concrete blocks with small holes through which grass could grow. Another possibility cited in the article is a system of plastic rings below the surface of the soil giving a more lawn-like appearance.

Until we understand what exactly the proponents have in mind, and until they can point to an installation in Ottawa we can visit, it is hard to know what the "front lawn" will be like.

But in today's article there was one aspect which I found curious. In discussing the possible use of the "front lawn" for concerts, festival activities etc. the article says "The city and the NCC would decide on the programming while the Ottawa Sports and Entertainment Group would manage the events for a fee. The city would reap any profits and absorb any losses from the events."

I am not sure that this passage gives a correct interpretation of the business arrangement as proposed. If an event, the Tulip Festival for example, wants to use the front lawn, it would contract with OSEG to use the space and pay a rental fee. That fee would go to OSEG. Only after OSEG has covered all its costs, including any administrative charges and profit, would any funds be transferred to the mysterious "closed system" and then funds would be run through the "waterfall". Only after payments are made to the lifecycle reserve fund, to OSEG as return on its investment, and to OSEG to pay off its investment, would the City receive anything. At least that is my understanding.

I am in favour of greening in the sense of removing some of the acres of empty asphalt but I think we need to know what exactly is proposed. Moreover we need to know how the money is moving.

Risks and rewards

2009-09-27T20:54:00.000-04:00

It's hard, even for a conscientious journalist, to get the whole story.

In today's Ottawa Citizen, Patrick Dare makes a valiant attempt at explaining the complex Lansdowne Partnership proposal. He makes excellent points, in particular his statement "...it is highly unusual for a city to dedicate property taxes to a specific expense, as is proposed in this project -- in this case, using the taxes from the retail buildings to cover the debt needed to fix up the stadium and arena for the sports teams to use."

But putting aside my objections to dedicating any of the property tax revenue to the calculation, please look at Mr. Dare's statement: "To pay most of the estimated $7.1 million in annual servicing costs for the city's debt for the construction project, the city is counting on a separate revenue stream: three-quarters of the property taxes from the new retail buildings ($2.8 million per year) and the savings that result from no longer paying for the operations and urgently needed renovations in the existing buildings (estimated at $3.8 million)."

Maybe arithmetic has changed since I left elementary school, but 3.8 plus 2.8 used to equal 6.6. Even with all the questionable assumptions, we are half a million short, every year.

And all the assumptions are questionable.

If the amount the city should be paying for the the renovations of the buildings is $3.8 million, why is OSEG on the hook to only put a minimum of $1.5 million into the lifecycle fund? (Answer: Because the city has invested $110 million into addresssing all the deficiencies of the past.) So can you really credit the $3.8 million in saving, since we have never, ever, spent $3.8 million on this?

And the idea that we can credit 3/4 of the property taxes from the retail buildings to pay, not the principal, but just the carrying costs of the city's investment in the rehabilitation of the stadium and civic centre, is, not just "highly unusual" as Mr. Dare would have it, but rather creative accounting on steroids.

But I don't want to criticize Mr. Dare. In fact he has obtained some new information and I am grateful for it. He reports "The city would issue a $117 million debenture to cover its share, That half of the Lansdowne project would be put to public tender." The idea that there would be a public tender for the city's portion of the project is completely new -- maybe it is confusion on Mr. Dare's part.

Earlier in his article, Mr. Dare writes "The City would rebuild Frank Clair Stadium (for football and soccer teams) and the Civic Centre (for the hockey team), but have the businessmen manage the construction and operate the facilities, as well as the rest of the site." I find this statement impossible to reconcile with the comment about a public tender.

I never expected to see Mr. Greenberg installing drywall or Mr. Ruddy painting washrooms in the the new updated Stadium. Of course they hire other people to do the specific work. Moreover they are smart business people who try to get the best value for money in the subcontracts they sign. But the overall contract is with OSEG. OSEG is to get the contract management fees. The less they pay the sub-contractors, the more money is left for them.

This is not competitive bidding in the usual sense of government procurement.

Even worse, it appears that OSEG are the ones who are deciding what should be done. They are the ones who want to replace the seats in the stadium. They are the ones who say that VIP suites are needed. They are the ones who are specifying what is needed in the stadium and in the civic centre.

So let's consider this from the outset. OSEG determines what is needed. The City agrees to pay for whatever OSEG wants. The City hands over cash to OSEG to buy whatever it wants. OSEG goes and gets whatever it thinks it needs at the lowest possible price and pockets the balance as a management fee.

Am I the only person who thinks this might not be the smartest arrangement for the City?

Sweeping statements

2009-09-23T16:03:00.000-04:00

There is too much salesmanship masquerading as analysis around the Lansdowne project.

I have been re-reading the staff report to Council on the Lansdowne partnership proposal and am irritated that what purports to be analysis is in fact a sales brochure.

In my earlier posting "Contradiction and confusion" I noted that the staff report claimed that housing would only be built in phase 2, an optional second stage of the project. This is contradicted by the Memorandum of Understanding.

I also noted that the infamous waterfall of revenue is misdescribed in the staff report. The report suggests that the City is in first and fourth position to receive revenue. In fact the first revenues simply go into a reserve fund. The City is dead last to get anything out of the project.

But on re-reading there are other statements that leap out as unsubstantiated claims. For example, it is maintained that "enhancing trade show and consumer show space on the site would have jeopardized... ...a transformation plan that respects the intention of Council's motion, the unique characteristics of Lansdowne Park, and the financial viability and long-term sustainability of the site." I have seen no evidence to support such a claim.

On the financial front, the staff report says "Compared with historical operations of Lansdowne, the project is expected to generate positive cash flow to the City over the life of the proposed agreement with OSEG". What does such a sales pitch mean? Does is mean that a positive cash flow will be received over the life of the project? Or maybe it means that the negative position of the City will be less than in the "historical operations of Lansdowne"? What is taken into account in coming up with such a statement? How would the cash flow compare if a different sort of arrangement were struck (selling an asset, or receiving rent for example)?

And the most laughable of all is the statement "The financial due diligence carried out by the City and its consultants on the OSEG proposal has demonstrated, among other things, that the City would be receiving fair value under the Plan." For suspicious outsiders, the failure to release any of the meaningful analysis backing this statement looks strange. Moreover, the fact that the City is proposing to strike this deal with the consortium that refused from the outset to contemplate entering into any sort of competition, raises no end of red flags.

Now the really dedicated reader will have noted that there is a document prepared by Pricewaterhouse Coopers among the many documents issued in respect of this proposal. Some might be lulled into believing that a large and highly regarded firm has blessed this project and declared its finances above reproach. No, the Pricewaterhouse Coopers document has an interesting disclaimer at the end. Translated into layman's language is says - 'we were hired to prepare some Power Point slides and here they are'.

Frankly the staff report, thrust under the Councillors' noses at the last minute on September 2 is a disappointment. It is not surprising that the Councillors adopted a flurry of motions to try to get answers to questions which the the staff report failed to address.

Redevelopment of Lansdowne is an important issue for Ottawa. It should be the subject of sensible debate and analysis. Sweeping statements of assurance are to be expected from a salesman. What we need is real analysis.

Commercial compatibility

2009-09-21T23:06:00.000-04:00

Plunking much additional retail activity into the midst of neighbourhoods dominated by small-scale merchants is seen as a threat to the established merchants of the Glebe and Old Ottawa South. Most of the business people active along Bank Street see the proposed shopping for Lansdowne as having a negative effect on their prospects.

One example is the effect that the multi-screen cinema proposed for Lansdowne might have on the Mayfair Theatre.

But it has occurred to me that there may be destructive competition built right into the partnership proposal. I wonder if it makes sense to have the Farmers' Market next door to the rumoured "Whole Foods" supermarket. I understand that Whole Foods stores sell herbal toothpaste -- an item unlikely to be found in the Farmers' Market. Nevertheless I believe that vegetables and fruit are the principal features of both.

I also wonder whether the various food outlets can all prosper. If the Aberdeen Pavilion is full of restaurants, there are cafes along Bank Street, a full-featured hotel, plus concessions in the civic centre and stadium, this is represents quite a few seats. Many additional diners would need to be attracted to Lansdowne to support all this service. Moreover we need to consider the effect on the existing pubs and restaurants in the Glebe and Ottawa South.

How did we get here?

2009-09-20T22:04:00.000-04:00

I speculate that in the negotiations city staff had an unclear mandate but they were being pressed by their political superiors to reach a quick and favourable result. On the other side I believe OSEG put forward their initial hard line positions and were amazed to see them adopted. Rather than negotiations, I think the time was spent finding ways to make a bad deal look better than it is. This could be an example in which the expression "putting lipstick on a pig" can be applied without it being offensive to anyone.

Some people who have been following my reasoning have asked what has led us to this stage. They agree that the Lansdowne partnership proposal does not appear to be favourable to the interests of City taxpayers and they wonder why the process has led to such a poor result.

First, I reject all the conspiracy theories which have been bandied about. No, I don’t think the city staff are on the developers’ payroll. No, I don’t think Councillors’ votes are up for sale.

Let’s consider the position of the principals in OSEG. I take at face value the declaration by the four gentlemen that they do want to see professional football return to Ottawa. I also believe that none of them consider that a football team be viably operated on a stand-alone basis. Some sort of subsidy is required.

Then look at the business background of the four partners. One is a successful promoter of sports; his role in the enterprise is to make the team function well as a business, to build a solid fan base and to make the kind of community connections which support a team.

The other three gentlemen are in land development. I believe all three have done well in that business. Thus if they are to consider working on a plan to cover probable losses in the pro football undertaking, they unlikely to first propose raising turnips as a money-maker. They brought their sets of skills to the problem of getting football back in Ottawa and this naturally led in the direction of a land development project.

On the City side there was a keen memory of the sad history of Lansdowne Park. Several grandiose plans for redevelopment had been floated in the past and yet nothing had been achieved. While the old City, the Region, and then the new City realized they held the park as an asset, a budget for proper maintenance, let alone revitalization, of the park was never forthcoming. The NHL team moved out of the civic centre, the prime tenant for the stadium vanished and the Ex had financial woes requiring City support. Lansdowne Park became one of those nagging issues no one wanted address – a "hot potato". To make matters look even worse, Lansdowne was set up as a profit-centre in the City’s accounting system. (Few other aspects of City activity are expected to show a profit.)

With the election of 2006 and the rapid cancellation of the light rail project, the new City administration had established a solid record for not doing things. It needed to demonstrate its ability to deal with festering problems and get on with the business of the City. A megaproject was needed.

So I would suggest we had City politicians eager to move ahead and cautious City staff who remembered only too well the frustrations of the past.

Against this background we had the announcement of the design-to-develop competition, the conditional CFL franchise, the refusal of the football consortium to compete, and the suspension of the competition. Statements were made that quick action was needed before the CFL franchise disappeared. This call for speed was surprisingly followed by a prolonged period in which the proposed arrangement was hammered out. In the meantime another group proposed a soccer stadium and suggested that senior levels of government would invest in soccer.

In March and April the two stadium proposals were considered. This was not really a competition and it had not been determined whether the City was to have a stadium at all. Then Council decided that the Lansdowne proposal was the City’s priority stadium project – not that any stadium was a priority, but if there were several stadium issues around that the Lansdowne one should be considered first.

So against that background negotiations began from April 22 for 60 days and then extended to September 2.

The City negotiating team had no indication that an open air stadium is a priority for the City. Nevertheless, it seemed that they could not return to Council with a recommendation that the project be abandoned. After all, there was no standard by which they could reach such a conclusion; no budget envelope had been established for the negotiating team and all they had to work from was a hodgepodge of motions – no housing, no subsidy to sports etc.

I suppose this left the City team unsure of what they could expect from the negotiations. Council was divided with some Councillors apparently opposed to any sort of negotiation whatever, while others seemed to be willing to agree to anything to get football back in town and the Lansdowne problem out of the way.

So what did the City negotiating team do? It looks as though they muddled on, ignoring completely some aspects of the Council instructions, fudging other parts and showing limited interest in the financial aspect of the project.

Certain Councillors had particular concerns they wanted to see in the negotiated outcome. For example the experience of the last great attempt to redevelop Lansdowne led to the instruction that no housing be built on the site. This was in the final motion adopted on April 22 but had not been the subject of meaningful debate. For better or worse, this restriction was ignored. Does it matter much if housing (as opposed to a movie theatre or supermarket or hotel) is built on the site? Some would say they are all the same.

Similarly there was a clause in the motion authorizing negotiations which called for no subsidy to professional sports as a result of the redevelopment of Lansdowne Park. Surely this was seen as totally unrealistic by both sides of the negotiation. It is the fundamental nature of the project. The only possible outcome of the negotiations was to develop a complex system by which this essential element is hidden. Concealing reality is surely the objective of the Municipal Services Corporation, the "closed system", the waterfall, and ridiculous understating of the city resources dedicated to the project.

So what has produced such a bad deal? City staff had already been told by Council to go ahead and speedily produce an arrangement. In the absence of better negotiating instructions, they did exactly as they perceived they were to do.

City staff had no instructions to play hardball. They could not say that any specific aspect of the OSEG position was a deal-breaker. After all, it appeared that some members of Council were willing to take any arrangement, no matter how bad it was for the City.

I expect the OSEG negotiating team could not believe the responses they received at the negotiating table. Without any instruction to resist, the City could yield on anything and everything. As long as it could be presented well to the public, there was no reason to deny an OSEG demand.

If this speculation describes the negotiations, the outcome is no surprise.

What is Lansdowne Park anyway?

2009-09-18T11:02:00.000-04:00

This might seem to be a strange question but it is quite relevant to the discussion about the proposed Lansdowne partnership proposal.

Most people think of Lansdowne Park as the area, enclosed by fencing, which is occupied by SuperEx. When SuperEx is on, you have to pay to get into Lansdowne Park.

Most of us are also aware that there is adjacent parkland which is not normally thought of as Lansdowne Park. Signage indicates that this is Sylvia Holden Park.

Sylvia Holden Park is made up of a narrow strip of land along the south side of Holmwood Avenue. That narrow strip is in two parts with a break where the back of the Horticulture Building comes out to Holmwood. In addition there is large piece of land between O’Connor Street and the canal which contains two baseball diamonds, grassed areas and a splash pool.

Many of us have assumed that the partnership proposal calls for the strip along Holmwood to be turned over to the Municipal Service Corporation and then passed on to OSEG. The plan calls for stacked townhouses along Holmwood. We have believed that the ball diamonds and the land "north of the fence" which resembles a traditional community park is retained by the City. This is incorrect.

The Memorandum of Understanding included in the partnership package released on Sept. 2 is very clear on this point. Clause 3.4 (probably mis-numbered and should be 3.1) says "The project will involve the whole of Lansdowne Park and Sylvia Holden Park."

In the short term this would mean negotiating with OSEG to use the ball diamonds – potentially an issue for Little League folks and others. In the longer term, this means the potential re-purposing of a classic park for residential or other development.

Once the park is in the hands of the Municipal Service Corporation and under long-term lease to OSEG, there is no specific impediment to changing the use of the land. No doubt, re-zoning and site plan approvals would be required, but I have read nothing which is intended to restrict the actions of the Municipal Service Corporation in pursuing income.

Battle of the press conferences

2009-09-17T16:43:00.000-04:00

Today we have had the pleasure of two press conferences on the proposed Lansdowne partnership project.

In the morning, Prof. Ian Lee from Carleton's Sprott School of Business gave his interpretation of the documentation on the project. His reading of the financial structure of the project coincides closely with my own views expressed in earlier postings to this blog.

Media reports indicate that in the afternoon, Mayor O'Brien claimed that Prof. Lee's interpretation was all wrong. When pressed to cite an example of error, apparently the Mayor had no response for reporters.

I was surprised to learn that the Mayor complained that Prof. Lee has a Ph.D. in public policy. The Mayor complained that the criticism had not come from a person with "a more astute understanding of finance". Apparently no one bothered to inform Mr. O'Brien that Prof. Lee was formerly a banker who had Shenkman Corp. as a client.

It will be very interesting to hear some specific rebuttal from OSEG or City spokespersons who may have a "more astute understanding" than that demonstrated today by the Mayor.

Better than nothing is no recommendation

2009-09-16T13:26:00.000-04:00

In discussing prospects for redevelopment of Lansdowne Park, I often hear the comment that we should go along with the Lansdowne Live proposal because the alternative is doing nothing.

I have stated many times that we should be looking at various ways to address the redevelopment of Lansdowne. If that examination shows that the Lansdowne Live proposal is the best alternative, we should select it and proceed.

But we have not considered alternatives. We haven't even considered the outline of what we want to do.

For example, we have not had a real debate about the City's need for an outdoor stadium. Some don't think we need one; others think that a stadium should be first on the list of things the City should work on.

Even Mayor O'Brien, who I think is a cheerleader for the Lansdowne Live proposed partnership, seems to think that other things such as flooding in Kanata, dumping sewage in the Ottawa River and public transit are more important issues than a stadium project.

Just for the sake of argument, let's say that an open-air stadium in Lansdowne Park is the city's number one priority. (I doubt that this is the case, but this is just to get you thinking.)

One possibility is that the City could offer to sell Frank Clair Stadium and the Civic Centre. If running such facilities is a paying proposition, maybe someone would be willing to purchase the lot. I believe that in Toronto the former SkyDome was sold to private interests (at a great loss) but presumably it is no longer a drain on the public purse.

But you say, no one in their right mind would buy the Stadium and Civic Centre with a hope of making money. Professional sports teams cannot pay rent at a level which would make ownership of the facilities profitable.

If it is true that a stadium and arena must be run at a loss, we need to consider whether taxpayers should subsidize professional sports and, if they should, at what level and how. Maybe the City could simply pay an annual subsidy to the new football team. This would be transparent and understandable. Revenue raised by the team plus the city subsidy might make it possible for the team to pay a rent which would make a stadium viable. The other possibility is that the city pay a subsidy to the stadium owners rather than to the team which is the principal tenant of the stadium.

Another possibility is that the city retain ownership of the stadium and civic centre but sell other parts of Lansdowne Park to raise money. The cash could be used to fix up the stadium and civic centre.

But if having an open-air stadium is such a big priority for the city, it appears that we have the resources to pay for it. The current partnership proposal calls for the City to ante up 129.3 million dollars at the outset. Either we have this money or we do not.

Of course there is also the possibility that an open-air stadium is not a priority for the city. We could use our 129.3 million dollars for some other purpose.

I pay property tax too!

2009-09-16T11:00:00.000-04:00

In today's Citizen, Roger Greenberg (CEO of Minto Group and principal participant in OSEG) writes that "Municipal realty taxes and the $3.8 million-per-year savings that the city would otherwise lose on Lansdowne Park ranks ahead of our financing".

As I have noted in previous postings, the City has consistently failed to adequately provide for the maintenance of Lansdowne Park in the past. There is no reason to believe future City budgets would provide significant money for the park. Thus the expenditure-avoided argument is invalid. It would be similar to arguing that if I sold my yacht, I could buy a new car. Since I have no yacht, the argument makes no sense.

The claim that the City enjoys some sort of windfall in property taxes from the proposed project at Lansdowne Park needs to be carefully considered.

Unless it is a special exemption (a church for example), every privately owned piece of real estate is subject to property taxes. If Mr. Greenberg's company built a commercial building anywhere in Ottawa, it would be subject to property taxes.

But if Minto built its building in Barrhaven (just as an example) it would be subject to full property taxes and there would be no discussion about the revenue to the City being used to pay off any specific capital investment by the City. It would be assumed the Barrhaven Minto building (as an example) would be bearing the tax burden as its share for services delivered by the City. For instance, if there were a fire in the building, firemen would come to rescue the occupants and extinguish the fire. Stated simply, property taxes are to pay for City services.

My property taxes on my humble residence, and taxes paid directly or indirectly by others, go into the pool of funds which pays for the services we all receive. The tax revenues are not earmarked to pay for specific investments by the City.

So what is so special about the proposed commercial developments on the Lansdowne Park land?

Now some might argue that additional private investment (such as building shops at Lansdowne) generates additional revenue for the City. That is correct and that is one reason the City encourages investment.

But commercial investment responds to a perceived demand. If we expect demand for consumer goods to grow, the market will respond and new retail outlets will be established, not necessarily on Lansdowne Park, but anywhere. Wherever that retail investment occurs, tax revenue will be generated for the City.

I cannot imagine that Mr. Greenberg and his partners really want taxes paid on development at Lansdowne to be dedicated to paying off city investment in the stadium and civic centre. That would only be possible if city services were not delivered to the shops, offices, hotel etc. proposed for Lansdowne. Under such a plan firemen would stand by and let occupants be burned to a crisp in the new Lansdowne hotel. This is unimaginable.

My position is that property tax revenue generated by commercial activity at Lansdowne would be generated by other commercial investment if the Lansdowne development does not go ahead. People will spend their money somewhere else and taxes will be paid.

The assertion that the City's investment in redevelopment of Lansdowne is carried or repaid through property taxes on the property should be dismissed from the discussion.

But there is an interesting question about taxes and commercial development at Lansdowne. Property taxes are calculated on the basis of an assessment by MPAC (Municipal Property Assessment Corporation). The assessment takes into account the value of the land and of the building. But the proposal for Lansdowne seems to have the City providing land rent-free for the commercial development on the site. This might mean that the assessments for Lansdowne commercial development are artificially low because no land value is considered.

In other words, there is a possibility that commercial development on the Lansdowne site is doubly subsidized -- no payment of rent for the land and artificially reduced property taxes. Both of those subsidies would be unfair. It would be unfair to businesses trying to compete against a subsidized competitor. It would be unfair to all taxpayers who have to pay more tax to make up for those who benefit from paying less than their fair share.

I should also make one final point about the quotation from Mr. Greenberg. He uses the expression "ranks ahead of our financing". Indeed that is the nature of taxes. Tax collectors don't fool around. Of course taxes take precedence over repayment of the private group's investment. Just try not paying your income taxes in order to reduce what you owe on your credit card.

But Mr. Greenberg raises the question of the ranking in which investors are paid in the Lansdowne proposal. That is exactly my point -- OSEG gets its money first and the City is left with whatever is left.

Bizarre assumptions and legerdemain

2009-09-15T18:29:00.000-04:00

In my previous posting, I indicated that I could not understand why the City of Ottawa and its taxpayers are to be treated so shabbily in the proposed Lansdowne Partnership. To conceal the imbalance in the financial arrangements, residents are treated to blue-ribbon sleight of hand.

--- Understate the cost to the City
The first light-fingered move is minimize the City's gross contribution to the project. Here are the methods I have detected so far.

The City's assets (land, buildings and other physical assets such as utility connections) are assigned no value whatever but are turned over to the partnership for 30 -50- 70 years. The cost of moving the SuperEx from Lansdowne to Albion Road is considered only in passing (I seem to recall an estimate of 7 million dollars in cost to the City). Then there is the cost associated with moving the trade fair exhibition space out of Lansdowne; does this involve a cost to the City?

--- Questionable sources of funds
In addition to borrowing 116.9 million dollars to put into the project, the City proposes to dip into "parking reserves" for 4 million dollars. How were these reserves accumulated? If merchants have paid cash-in-lieu of parking into this fund, they may resent having paid for a parking garage for the retail competitors.

But one of the most audacious claims is that 8.4 million dollars in costs to the City will be avoided between 2010 and 2012. City budgets have not included generous provision for maintenance of Lansdowne Park, so there is no validity to the claim that the money will be saved by approving the proposed partnership agreement.

The fact is that the proposed partnership calls for the City to hand Lansdowne Park to OSEG on a silver platter. That platter consists of 129.3 million dollars in cash, plus asssuming unidentified costs for the SuperEx and for trade show facilities.

--- Overstate revenue for the City
To make the deal look better, it is suggested that the City will receive property tax and avoid ongoing costs. These are described as positive cash flows over the period of the partnership.

The costs to the City which are supposedly avoided are bogus. The City has not spent such money in the past and there is no reason to imagine such sums would be spent in the future.

But the big distortion is the idea that property taxes paid on the development at Lansdowne pay off the significant investment the City is expected to make in the project. This is such a distortion of logic that it warrants a detailed explanation in my next posting.

To summarize, the partnership proposal as presented understates the cost to the taxpayers and overstates the anticipated flow of funds to the City.

The City as financial victim

2009-09-14T23:57:00.000-04:00

In my previous lengthy and complex posting, I outlined my understanding of the financial arrangements in the Lansdowne proposal. I have many questions and objections about such a deal.

First off, there is no value attributed to the land or the existing physical plant, both of which are being turned over to OSEG under a long-term lease. The land is definitely worth something and it is being made available for the construction of commercial buildings. There is no indication that the owner of the land receives any rent. In addition the existing stadium and civic centre may need to be rehabilitated, but they do have value. Again no rent is being paid.

I cannot understand why the City’s equity in the partnership is deemed to represent only 20 million dollars. This is an remarkable understatement of what the City brings to the partnership proposal. Not only is the City providing the use of the land and the current physical plant, it is also investing 129.3 million dollars in the rehabilitation of the stadium & civic centre plus construction of parking facilities.

By ridiculously understating the value of what the City brings to the table, the partnership arrangement represents a significant transfer of wealth to the private sector partner at the expense of Ottawa taxpayers.

I fail to see any reason that net revenues should be distributed to OSEG (both return on and return of equity), prior to payment to the City. Why should the lesser investor be given preference over the greater investor?

In any event, OSEG is covering the cost of financing the retail element of the project prior to turning over any money to the "closed system". By contrast the City is on the hook for financing costs for 116.9 million dollars (and I will argue even more), prior to receiving anything.

Of course the first action of the new Municipal Services Corporation is to award the contract for the rehabilitation of the stadium and civic centre to OSEG. There is no question of competitive bidding so there is no reason to believe that the MSC will get good value for the 129.3 million dollars it proposes to spend.

Promoters of the Lansdowne partnership campaign (such as OSEG and various members of Council) have made much of the fact that OSEG is willing to take on the project (without competition) on a fixed-price basis. Somehow that does not seem very impressive. Does the City not normally seek definitive price quotes when it buys goods and services?

The proposal to establish a Municipal Services Corporation needs to be carefully examined. What exactly will be the role and responsibility of the corporation? How will the directors of the corporation be appointed?

The CFL football team is to pay annual rent of $300,000 for use of the stadium and the OHL hockey team is to pay $100,000 for civic centre. This money goes into the "closed system" so potentially much of this comes back to OSEG. Is this a stream of rental income that can justify $110 million investment by the City in rehabilitation?

All of these comments come directly from the documents presented to Council, but I have many more concerns. Those concerns spring from mistaken assumptions or from issues deftly sidestepped in the documents released to date.

Financial complexity hides much

2009-09-14T23:20:00.000-04:00

Although I have reservations about various aspects of the Lansdowne Live project, my greatest concern involves the financial arrangements. I don’t think it is a reasonable deal for the taxpayers of Ottawa.

Depending which document you read, the story changes somewhat but, to make my concerns understandable, the following is my interpretation of the proposal. This interpretation is the basis for my objections in following posts.

First, the City hands over Lansdowne Park and the physical assets on the land to a new Municipal Services Corporation [MSC]. Then the City of Ottawa (that same city that has no money to take independent initiatives at Lansdowne) finds 129.3 million dollars which it turns over to the MSC.

Without competition, MSC awards a contract to OSEG to refurbish the stadium, the civic centre and to build parking garages, an investment of 129.3 million dollars.

MSC turns over operation of the entire park, including the refurbished stadium and civic centre to OSEG.

OSEG invests 97.8 million dollars to build retail buildings and associated parking garages. OSEG expects to invest 19.6 million dollars in the football and hockey teams.

A new mysterious entity called "the closed system" is created; it is unclear how the closed system relates to MSC. However net revenues from the stadium and civic centre apparently go to the "closed system", as do net revenues from the retail component, parking and the two identified sports teams (the 67's hockey team and the future CFL football team).

The principle appears to be that each of the various elements of operation cover their respective costs, including cost of financing, prior to calculation of a net revenue payable into the "closed system". On an annual basis, a distribution of funds from the "closed system is carried out.

The first call on the revenue in the "closed system" is a deposit to a lifecycle fund for major maintenance requirements of the stadium and civic centre. The lifecycle fund is held by the MSC. OSEG provides a guarantee that a minimum deposit to the lifecycle fund is effected each year regardless of the revenues secured for in the "closed system". It is anticipated that the lifecycle fund will be exhausted every six years in a cycle of accumulation and expenditure.

Once the lifecycle fund obligation has been fulfilled, additional revenues in the "closed system" are allocated first to provide a defined 8% return on equity to OSEG. Next funds are allocated to repay OSEG its equity in the project with the equity amortized over 30 years. Apparently OSEG equity is about 20 million dollars in 2013 when the operation of the redeveloped stadium begins. I assume that OSEG equity is required to arrange the financing for the retail and parking elements. Coincidentally the setup costs for the football and hockey teams are of the order of 20 million dollars, but I imagine that OSEG initiative is distinct from the partnership arrangements.

Only after the lifecycle fund payments, the 8% return on equity to OSEG and the 30 year amortization of OSEG equity is effected, is any payment in respect of the City’s equity to be paid. Somehow it is deemed that the City’s equity is only 20 million dollars and it is intended to pay a return to the City on such deemed equity at a rate of 8%.

If there are further funds in the "closed system" for distribution, these are split equally between OSEG and the City.

In summary, revenues go into a "closed system" and are paid out in the following order:
- payments into a lifecycle reserve fund
- payment of return on equity to OSEG
- payment of equity to OSEG on a 30 year amortization
- payment of return on equity to the City
- any balance is split between OSEG and the City.

A true football project

2009-09-13T20:46:00.000-04:00

There are people, many people, who would like to see CFL football return to Ottawa. For many football fans, it is difficult to see why others are raising objections to the Lansdowne Live proposal. After all, this is a plan which has been promoted as a means of bringing back football.

But it is worth noting that even if everything goes ahead full steam, there will be no football team on the field until 2013 or 2014. Why is it taking so long?

One reason for the delay is that the Lansdowne Live proposal involves much more than football. For some reason, you cannot have a football team until you have a supermarket, a shopping centre, a multi-screen movie theatre and VIP boxes in the stadium.

If you wanted to establish a football team, would you build a supermarket as your first step?

No, probably the first step would be to look into temporary stands for fans in the existing stadium. It would be nice to replace the seats in the stands, but need that be the first concern?

Similarly, if the idea is to bring professional soccer to Lansdowne, what really needs to be done?

All this is to say that, if football (or soccer) is the objective, there are quicker and surer ways of restoring football than the complexity of the Lansdowne Live proposal.

Who is pushing this project?

2009-09-13T20:13:00.000-04:00

I used to think that Lansdowne Live was a project being promoted by Messrs. Greenberg, Shenkman, Ruddy and Hunt. Now I am beginning to wonder if I have it wrong.

On August 29 the Citizen ran a column by Kenneth Gray under the headline "Councillor touts revamped Lansdowne plan". According to my Oxford Concise "tout" is to "solicit custom persistently". The article quotes Councillor Chiarelli as saying "I feel good about the whole thing".

In the Sun of September 1 an article is headed "Lansdowne plan has mayor in sales mode" and Mr. O'Brien is quoted as saying "I believe the business transaction and site planning is the best possible plan available that is tax neutral for the citizens of Ottawa."

And Le Droit ran an article on September 2 under the headline "O'Brien promet un beau melange" and goes on to quote the mayor saying "c'est un beau melange de prudence sur le plan economique et de design artistique de niveau international".

Wow! It seems that some of our elected members of Council consider that is their job to promote this deal. If OSEG has been considering hiring a PR team, they can save their money -- just rely on our local politicians. After all, they were out selling the proposal before any of the details were released. They would probably sell me a used car even before it comes onto the lot!

Contradiction and confusion

2009-09-12T11:18:00.000-04:00

Understanding the "Lansdowne partnership plan" isn't easy. There are many documents to read including:
1- the staff report to Council (23 pages - available on the city website)
2- the glossy giant-sized "plan" document (56 pages - available on the city website)
3 - a 5 centimetre thick book of appendices
4- a slide presentation to Council (promised on the city website but not there)
But it would be simpler for everyone if the documents didn't contradict each other. Or maybe someone could tell the public which documents are correct and which are in error.

Just to illustrate the problem, here are some of the contradictions.

-- When is the housing built?
The staff report to Council describes all residential components as being in Phase 2 Before Council it was said this was "plug and play" (apparently intended to suggest that residential components were optional and subject to some subsequent decision by Council). This is contradicted by the Memorandum of Understanding including in the glossy plan document. Clause 4.5 of the MOU says "The Stadium, the Retail Component, the Front Lawn, the Holmwood Townhouses and all parking except residential and hotel component parking, must as a condition of the Project, proceed concurrently."
Well, are the townhouses in phase 1 or phase 2?

-- When does the City get paid?
In the staff report to Council it is said that "the City of Ottawa is in the first and fourth position in the waterfall structure" indicating that funds start flowing to the City. But later on the same page (and in other documentation) it is clear that the first payments go into the "Lifecycle fund". This is not a flow of cash to compensate the City; it is a reserve fund for major maintenance of the stadium and civic centre. That fund will be called upon to keep the facilities from deteriorating. It is like the reserve funds of a condo or a portion of rent paid to a landlord to cover real costs. OSEG receives return on its equity and repayment of its equity before any distributions are made to the City.
So how is the City first in line to receive payment?

The more you read these documents, the more questions you have.

Any intention of listening?

2009-09-12T11:11:00.000-04:00

It is Saturday September 12. In searching on the City of Ottawa website, there is no sign of the town hall public consultations which are supposed to start September 21. Nor is there any indication that the online forum to gather public comments has been set up.

Am I a cynic to think that the City of Ottawa and OSEG are less than enthusiastic about hearing from the public?

"Isn't that special!"

2009-09-11T10:43:00.000-04:00

Years ago the "Church Lady" made frequent appearances on Saturday Night Live. When she disapproved of something, her comment was invariably "isn't that special".

The Lansdowne Partnership Plan which was revealed to the public on September 2 certainly fits into the category of something special.

It would appear to the observer that the City's policies for procurement of goods and services should apply since it is proposed that the city spend big bucks. No, we are told this is something different; it is an unsolicited proposal.

So you might assume that the City's policies for unsolicited proposals might apply. No, we are told this is a public private partnership.

Then you might imagine that the City's policies for public private partnership (P3's for the cogniscenti) would be applicable. Wrong again, we are told, this is something unique.

Maybe others accept the unique nature of the proposal, but I am very uncomfortable about entering the twilight zone where no rules apply and anything goes.

One of the concepts discussed in political theory is that of "rule of law" versus "rule of man". The idea is that we have a body of accepted policy rather than operating on the basis of personal whim. In the case of the Lansdowne redevelopment proposal now before us, we seem to be drifting into the dangerous field of making decisions on the basis of personality rather than of policy.

What's the rush?

2009-09-10T11:57:00.000-04:00

Lansdowne Park has been neglected for years. Nevertheless the public of Ottawa (and Ottawa City Council) is being stampeded to quickly agree to a questionable plan for redevelopment of a valuable piece of property.

The documentation on the proposed "partnership" was made available to the public (and apparently to members of City Council) on September 2. Hundreds of pages of documentation were released. By some miracle, certain members of City Council absorbed all this material and instantly came out in support of the project as presented.

The public is supposed to have an opportunity to express its views about the proposal in town hall consultation sessions during the week of September 21 (i.e. 11 days from the moment I write this). However we have no information on where or when these town hall meetings are to occur.

The city is also planning to set up an online forum to capture views from the public. Apparently the timetable would call for that forum to wrap up by early October.

All this feverish activity (if it ever gets underway) is designed to lead to a Council Committee meeting on October 26.

It took OSEG (the proponents of this deal) from October 20,2008 to March 18, 2009 (150 days) to polish up its first proposal submitted to the City. Then it took from April 22, 2009 to September 2 (134 days) to negotiate the second version of their proposal. The negotiations which were to take 60 days took twice as long as planned.

Against this background it is hard to see why we need to rush quickly through the process of public consultations.

Purpose of this blog and background brief

2009-09-10T11:32:00.000-04:00

For many months, I have been following with interest the public discussion about the redevelopment of Ottawa’s Lansdowne Park. As the debate continues I want to expose my thoughts and give others a chance to weigh in with their views. The topic can be approached from many different viewpoints and the documentation about the issue is becoming vast.

As general background, Lansdowne Park has been a subject of public debate in Ottawa for a long time. The talk heated up in 2007 with the rumour that there might be a plan to return football to Frank Clair Stadium, located in the park. In November 2007 City Council voted to initiate a design competition but this was halted in May 2008. In March 2008 a group of business men announced they had secured a conditional franchise from the Canadian Football League. When the consortium were asked if they proposed to participate in the competition, they said they would not do so. Their refusal to compete was the basis for the suspension of the competition.

In October 2008, the consortium promoting the return of football announced a plan for redevelopment of Lansdowne Park which they titled "Lansdowne Live". The focus of that plan was the rehabilitation of the Stadium and of the hockey arena known as the Civic Centre. They also proposed various commercial development on the park site.

Eventually another proposal for an open-air stadium came from owners of the large enclosed hockey arena located in Kanata in the Ottawa western suburbs. That proposal was submitted by the owners of the Ottawa Senators, a National Hockey League team. Their proposal was to secure a franchise for a major league soccer team to play in the proposed stadium.

With the design competition still suspended, Ottawa City Council agreed to have the two proposals for an open-air stadium analysed by city staff. Meanwhile the City had contracted for a study -- a needs analysis -- which would look at what would be required for a stadium. That study indicated that neither of the two proposals (Lansdowne or Kanata) were the best sites for a stadium.

When the analysis of the two proposals was presented to City Council, it was found that the Lansdowne proposal was preferred. City staff had proposed that Council consider whether having a stadium at all was a priority for the city, but Council sidestepped that question and directed city staff to enter into negotiation with the Lansdowne proponents. The consortium had adopted the name Ottawa Sports and Entertainment Group (OSEG).

Those negotiations continued from April 22, 2009 to September 2, 2009. On September 2, considerable documentation on what was called the "Lansdowne Partnership Plan" was released and is the basis for public debate in the Autumn of 2009.