At various times, certain City Councillors, and some other supporters of the deal between the City of Ottawa and Ottawa Sports & Entertainment Group, have suggested that the legal action taken by the Friends of Lansdowne is without merit and will be easily dismissed by the Courts. Although the Superior Court ruling was pretty quick, this is not proving to be the case for the appeal.
The appeal was heard by the Ontario Court of Appeal on November 28, 2011. Today, March 6 means we are in the fifteenth week of deliberation by the three judges who heard the appeal. Of course the Courts are busy and there may be any number of reasons that a decision has not yet been rendered.
But I think it is safe to say that, every day that goes by, the Friends become more optimistic (and maybe, just maybe, the City and OSEG become slightly more anxious).
Tuesday, March 6, 2012
Saturday, February 25, 2012
A really great landlord
I have already noted that the City of Ottawa is a wonderful landlord in its arrangement with OSEG. No rent is expected from the tenant until all of the tenant's other obligations have been addressed -- that is the nature of the City's "deemed equity" in the Lansdowne Partnership Plan: wait and get nothing until your partner is taken care of.
But it gets even better! City Council has just agreed to give the Ottawa 67's hockey club a cool $500 thousand per year for two years in which the 67's are to play at Scotiabank Place rather than at Lansdowne. The hockey team is being asked to move out so that the construction work at Lansdowne (including the long overdue repair of the leaking roof over the arena) can go ahead.
Nowhere in the staff report presented to Council is it suggested that the City is obliged to make any payment to the 67's. There is no mention of a lease that is being broken. Apparently the practice is simply that the City grants half a million dollars whenever it feels like it.
But the staff report is quite enlightening in what it does say about the relationship with its hockey team tenant. Because the 67's will be elsewhere, the City will not be receiving $150,000 in rent per year from the 67's organization. This is the first time I have seen a figure quoted; I have often wondered why Councillors have not asked how much the 67's are paying to use the Civic Centre.
The $150,000 figure is interesting because when the 67's are to return to Lansdowne, their annual rent will drop to $100,000 per year. (Want to check these figures? For the 150k, look in the staff report dated Feb. 8, 2012 called LPP implementation status update. For the 100k, go back to the Price Waterhouse "Business Plan for Transformation" dated Sept. 1, 2009.)
So when the City of Ottawa is your landlord, after spending millions fixing up the arena, the tenant is given a 33% discount on the rent. Isn't that wonderful?
And it gets even better. Where does the rent go? Here it is very difficult to know since so many details are hidden away, but in all likelihood the rent goes into the infamous waterfall -- an arrangement under which nothing trickles back to the City until all the financial dreams of OSEG are fulfilled. In other words, until the City starts getting any money, the rent from the hockey club is going to OSEG, which owns the hockey club.
Do I know that the rent goes into the waterfall? No, this is a guess. But the guess is probably right because of the way the rest of the deal is structured. The Feb. 8 staff report makes it clear that all the revenue from the naming rights for the stadium and arena is to go into the waterfall. This is unusual. Normally the naming rights money would go to the owner of the building -- not in this case. Thanks to the clever negotiating skills of the City, the owner of the building who pays 100% of the renovation costs, the revenue from the naming rights will go to OSEG for years and years before a penny comes to the City.
Yes, if you're the right tenant, the City of Ottawa is truly a splendid landlord.
But it gets even better! City Council has just agreed to give the Ottawa 67's hockey club a cool $500 thousand per year for two years in which the 67's are to play at Scotiabank Place rather than at Lansdowne. The hockey team is being asked to move out so that the construction work at Lansdowne (including the long overdue repair of the leaking roof over the arena) can go ahead.
Nowhere in the staff report presented to Council is it suggested that the City is obliged to make any payment to the 67's. There is no mention of a lease that is being broken. Apparently the practice is simply that the City grants half a million dollars whenever it feels like it.
But the staff report is quite enlightening in what it does say about the relationship with its hockey team tenant. Because the 67's will be elsewhere, the City will not be receiving $150,000 in rent per year from the 67's organization. This is the first time I have seen a figure quoted; I have often wondered why Councillors have not asked how much the 67's are paying to use the Civic Centre.
The $150,000 figure is interesting because when the 67's are to return to Lansdowne, their annual rent will drop to $100,000 per year. (Want to check these figures? For the 150k, look in the staff report dated Feb. 8, 2012 called LPP implementation status update. For the 100k, go back to the Price Waterhouse "Business Plan for Transformation" dated Sept. 1, 2009.)
So when the City of Ottawa is your landlord, after spending millions fixing up the arena, the tenant is given a 33% discount on the rent. Isn't that wonderful?
And it gets even better. Where does the rent go? Here it is very difficult to know since so many details are hidden away, but in all likelihood the rent goes into the infamous waterfall -- an arrangement under which nothing trickles back to the City until all the financial dreams of OSEG are fulfilled. In other words, until the City starts getting any money, the rent from the hockey club is going to OSEG, which owns the hockey club.
Do I know that the rent goes into the waterfall? No, this is a guess. But the guess is probably right because of the way the rest of the deal is structured. The Feb. 8 staff report makes it clear that all the revenue from the naming rights for the stadium and arena is to go into the waterfall. This is unusual. Normally the naming rights money would go to the owner of the building -- not in this case. Thanks to the clever negotiating skills of the City, the owner of the building who pays 100% of the renovation costs, the revenue from the naming rights will go to OSEG for years and years before a penny comes to the City.
Yes, if you're the right tenant, the City of Ottawa is truly a splendid landlord.
Sunday, February 19, 2012
Lansdowne Park - monument to neglect
On Friday night, hockey had to be cancelled - the roof was leaking. The 67's had to wait until Saturday afternoon because water was dripping into the Civic Centre - not just into the seats, this time the water was leaking onto the ice surface.
But water infiltration was nothing new, the City of Ottawa has known for years about the problem. Why has nothing been done?
For some reason, there are people running the show at City Hall who think that you have to build a supermarket before you can fix up City assets at Lansdowne Park.
Some of those people claim that the legal case brought by the Friends of Lansdowne has delayed needed maintenance at Lansdowne. This is nonsense. The City is at perfect liberty to go ahead and fix up the roof of the arena.
No, it is the obsession that we must first build a subsidized shopping centre, that has led the City to continue its neglect of its assets at Lansdowne Park.
But water infiltration was nothing new, the City of Ottawa has known for years about the problem. Why has nothing been done?
For some reason, there are people running the show at City Hall who think that you have to build a supermarket before you can fix up City assets at Lansdowne Park.
Some of those people claim that the legal case brought by the Friends of Lansdowne has delayed needed maintenance at Lansdowne. This is nonsense. The City is at perfect liberty to go ahead and fix up the roof of the arena.
No, it is the obsession that we must first build a subsidized shopping centre, that has led the City to continue its neglect of its assets at Lansdowne Park.
Wednesday, February 8, 2012
Transportation: lighter than air
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".
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?
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."
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."
Monday, January 9, 2012
Open Competition
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.
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.
Monday, January 2, 2012
A question of process
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.
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.
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