Truth squad let loose

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".

I pay property tax too!

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.