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.
Showing posts with label subsidy. Show all posts
Showing posts with label subsidy. Show all posts
Sunday, November 15, 2009
Tuesday, November 3, 2009
Catching up...
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.
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.
Sunday, October 4, 2009
Around and around - a subsidy...
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.
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.
Sunday, September 20, 2009
How did we get here?
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.
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.
Wednesday, September 16, 2009
Better than nothing is no recommendation
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 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.
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