The city says it no longer expects to turn a profit on the Lansdowne Park project due mainly to higher-than-expected repair costs at TD Place arena.
The Ottawa Sports and Entertainment Group, the city’s partner in the $200-million redevelopment plan that brought a Canadian Football League franchise back to Lansdowne along with new shops, restaurants, office space and condos, is also forecasting a lower net return.
OSEG says it now expects a net profit of only $4.9 million over the next 30 years, down from its original projection of $13.4 million. The organization says it posted a net loss of $10.9 million in 2014, the first year the CFL’s Redblacks and North American Soccer League’s Fury FC took the field at TD Place stadium.
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Those findings were presented in the first annual report of the Lansdowne Limited Partnership, which was released late Tuesday and will be tabled at next week’s finance and economic development committee meeting.
OSEG says it expects to generate $109.7 million more in net revenues over the next three decades than it originally projected in 2102, thanks to higher lease rates for its retail properties, higher CFL broadcast revenues and more money from naming rights and ticket fees.
However, the organization has had to fork over $53.6 million more than expected for capital expenses, including an additional $23.6 million to repair rust and other problems at TD Place area and $20 million in unforeseen retail construction costs.
Overall, OSEG expects to earn $115.4 million and invest $110.5 million over the 30 years of the agreement, compared with its original 2012 estimates of $69.7 million in earnings and $56.3 million in investments.
OSEG is projecting significantly higher net revenues than originally expected from both its sports and retail operations, but those “are offset by higher operating expenses,” the report says.
The city, meanwhile, says its original profit projection of $22.6 million will be wiped out by the unexpected repair costs at the arena. But the report also says the city could get $6.8 million of that back depending on the outcome of its dispute with OSEG over the repairs.
OSEG says it has created 286 full-time jobs – higher than its original estimate of 220 – and 1,599 part-time positions. Retailers at Lansdowne, meanwhile, have created 367 full-time and 680 part-time jobs, according to the report.
Lansdowne’s 350,000-square-foot retail component is now 91 per cent leased, OSEG says. Fifty-three per cent of those stores, services and restaurants are deemed to be new or unique in the market, a higher share than the 40 per cent called for in the original retail strategy.
As for Lansdowne’s residential component, OSEG also says all 78 units at the site’s signature condo development, Vibe, have been sold, while 12 of the 155 units at the nearby Rideau condo are still available. All 47 units at Holmwood Towns have been purchased.
Minto Properties, which manages the five-storey, 100,000-square-foot office building at the site, says it expects the facility to be fully leased within the next year. The Canadian Internet Registration Authority is currently the main tenant.