The City of Ottawa now expects to get a share of the profits from the Lansdowne Park project, just months after it appeared the city would see no cash returns on its investment in the redevelopment deal.
By Jacob Serebrin
The City of Ottawa stands to make $32.5 million in profit over the next 30 years, according to a new forecast included in a report from the city manager’s office.
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That increase is being credited to higher revenue projections and the city’s decision to guarantee a loan taken out by the Ottawa Sports and Entertainment Group, the city’s partner in the project. That guarantee helped reduce OSEG’s interest costs, increasing potential returns for both partners.
The city had originally expected to make $22.6 million from the redevelopment that brought a Canadian Football League franchise back to Ottawa and saw the construction of new retailers, restaurants, office space and condos at Lansdowne Park.
But in November, that forecast was changed.
Higher projected operating costs and unexpected capital expenses saw the city’s potential returns wiped out.
The new forecast projects that total payments of $456.8 million will be made to the city and OSEG over the next 30 years, up from a forecasted $424.1 million in November.
Of that, $64.2 million will go to the Lansdowne Park lifecycle fund, while OSEG, which is responsible for operating costs, will get $360.1 million.
According to the report, 2.5 million people visited Lansdowne Park during 2015.
That pushed revenues at the site up by 72 per cent from 2014, to $43 million. TD Place stadium generated an additional $4.7 million in revenue, while retail rents rose by $11.5 million.
Despite the increase, the park remains unprofitable.
OSEG reported an operating loss of $985,000 in 2015, an improvement from 2014, when it posted an operating loss of $11 million.
After non-cash items and interest, it reported a net loss of $12.6 million, an improvement from $16.2 million in 2014.
So far, 97 per cent of the retail space at Lansdowne has been leased.
The Vibe condominium tower is fully occupied and the Rideau condominium tower has only six units available. The 48 townhouses on Holmwood Ave. that were built as part of the project are also all fully sold.
A five-storey office building at the site still has three empty floors, with one floor occupied and another leased. A nearby two-storey office building has been committed under lease.
According to the report, the redevelopment has created more than 1,000 jobs. Of those, the full-time equivalent of 375 jobs are with OSEG, while the equivalent of another 711 full-time jobs are at retailers and other on-site businesses.
The report will be presented to city council’s finance and economic development committee on Tuesday.