The return of the
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Serving the Glebe community since 1973 November 13, 2020 www.glebereport.ca
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ISSN 0702-7796 Vol. 48 No. 10 Issue no. 529 FREE
OSEG SEEKS CITY BAILOUT FOR FAILING LANSDOWNE By Alan Freeman Six years after its opening, the Lansdowne redevelopment is on the brink of financial collapse and can only survive with financial help from the city, according to City of Ottawa manager Steve Kanellakos. Some critics condemned the proposal, which was released unexpectedly November 4, as a bailout for the Ottawa Sports and Entertainment Group (OSEG) which is owned by some of the city’s most prominent real estate developers. Blaming the pandemic for a collapse in revenues from sports, concerts and other events and from its already troubled retail and commercial operations, OSEG says it’s on the verge of default. “OSEG has a retail loan outstanding of $106 million that must be refinanced over the next two years, and the worsened financial projections due to the pandemic will make that difficult, putting them at a very real risk of default,” the report states, noting that OSEG had “made a request for help to the city.” The lengthy report recommends a series of measures to keep OSEG afloat, including giving the partnership access to $4.7 million from a rainy-day fund to help it keep operating in 2021. City staff also suggests that the public-private partnership be extended by 10 years to 2054 and that the city give up half of the cash flow from retail operations it would have collected at the end of that period. Councillor Shawn Menard called the proposal “a bailout to OSEG” that will add to the city’s long-term liabilities. The Glebe Community Association
According to a surprise report from the city, Lansdowne is on the brink of financial collapse, and may not survive without a city bailout. A public consultation hosted by councillor Shawn Menard was held November 10. PHOTO: LIZ MCKEEN
raised questions and concerns about the proposal, complaining that it was put together without any public input. At press time, Menard had organized a community meeting on Zoom for November 10. It was to be discussed by city council’s finance and economic development committee on November 12. The OSEG partners include Minto Development chairman Roger Greenberg, Trinity Developments’ John Ruddy, developer William Shenkman and businessman John Pugh. They are not named in the report, and it’s unclear whether they are willing to provide more cash to help OSEG avoid default. The report paints a bleak picture for
COVID crushes this year’s hopes for Mutchmor Rink Letter from the principal of Mutchmor Public School, Sandra Walker We appreciate your patience as we worked to come to a decision about the rink for the 2020-2021 school year. COVID-19 has put a wrench in a lot of our planning, and it is no different for our decision about the rink. We have consulted with many stakeholders and considered our outdoor use during recesses, gym class and outdoor learning opportunities, and we have decided that we need the space in the yard to maintain distancing and safety of our students and staff. This year we have six recesses, where last year we had two. The yard has been divided into four zones for classes to use throughout the day. Adding the rink would make these zones too small for students to distance themselves properly and safely. Even the small advantage of class use of
the rink has been rendered moot due to COVID-19. Without volunteers to aid our little skaters and with the hut too small to allow for proper distancing, COVID19 precautions have removed our own ability to use the rink. We recognize that this may be a disappointment for some community members, however the decision is for this year only. Hopefully COVID-19 will be under control by next year, and we will be able to have the rink installed as it was last year. At school, student and staff safety is of utmost importance. This year, more than ever, we need to do everything we can to maintain our students’ ability to stay safe during this pandemic, to not compromise anything that could jeopardize that safety and the ability to stay in school. We greatly appreciate your understanding.
OSEG, which owns the shopping centre and professional sports teams at Lansdowne. The residential condos, which were developed successfully by Minto, aren’t part of the partnership, nor is the office building. The report says that due to the pandemic, OSEG only expects to collect 75 per cent of its rental income in the current fiscal year, ending next March 31. According to CBC, OSEG collected less than half the rent from shops and restaurants between April and September. A visitor to the $425-million Lansdow ne project sees the impact immediately, with restaurants and stores shuttered, several of them permanently. It is unclear when the sports teams owned by OSEG, including the Redblacks and Ottawa 67s, will resume operations. The report says OSEG expects to spend an additional $40 million on operations and capital expenditures over the next five years due to the pandemic.
The city has already spent at least $210 million on Lansdowne. The report recommends that a new working group of OSEG representatives, city managers and city councillors be formed to study options for Lansdowne and report back by the spring. It’s clear the pandemic is only part of the problem. The report notes that the situation was “already challenging” before COVID-19 took hold. OSEG reported a net loss from recurring operations of $11.4 million in the last fiscal year because of weak revenues from the Redblacks. OSEG has repeatedly complained that visitor numbers at the site are too low, and it has been trying to find ways to attract more people. Ominously, the report warns that even when COVID-19 abates, it will take at least five years for rents to get back to prepandemic levels. And it hints that even more city money is going to be needed in the future, including millions to renovate the north stands of the stadium. The report appears to question the whole future of the retail part of the development, predicting a continuing trend towards online shopping in the post-COVID world. For residents passing empty shopfronts on Bank Street, it’s clear there’s a glut of retail space in the neighbourhood. Despite strong community opposition to the development a decade ago, the city signed a complex sole-source 30-year deal with OSEG. The report warns that if the city doesn’t bail out OSEG and lets it default, it would probably end up closing the sports teams and the city would be forced to run the shopping centre itself. The report insists that the new deal will improve the city’s financial situation. Alan Freeman is a freelance journalist and columnist for iPolitics who lives in the Glebe.
What’s Inside
Poetry Quarter “Best the Bard” �����������������Page 22
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