Aerial photo of TD Place Stadium and shops at Lansdowne Park with the Glebe at top and left. WAYNE CUDDINGTON / OTTAWA CITIZEN
Matthew Pearson, Ottawa Citizen
The finance committee has endorsed a deal to end the city's $23.6-million dispute with its Lansdowne Park business partners, despite a legal opinion that says the city would likely win if the matter went to arbitration.
The Ottawa Sports and Entertainment Group (OSEG) and the city differ over who's responsible for work related to repairing rusty steel structures in the arena's roof, which were discovered after a contract had been signed, and other costs for bringing the retail area up to the same design standard as elsewhere in the park.
OSEG believes the roof repair is beyond the scope of the agreement it signed with the city, so the city should pay; the city believes the bill belongs to OSEG.
A legal opinion from Gowling Lafleur Henderson, shared in confidence with councillors, says that on every front the Gowlings lawyers think the city would probably win. On the big-ticket steel, OSEG knew that rain leaked into the Civic Centre hockey arena from above — not least because it dripped into Ottawa 67's owner and OSEG partner Jeff Hunt's private box. OSEG had a report in hand suggesting that the steel in the arena roof, which supported the concourse for the football stadium built on top of it, had probably been exposed to a lot of water.
The developers might not have known precisely what they were getting into, the legal opinion says, but they knew they were taking a risk when they signed a deal to take on renovating the stadium and arena at a fixed price.
The proposed settlement, which still needs council's stamp of approval, would involve OSEG's taking out a loan for $23.6 million, which would be guaranteed by the city so that the business group could secure a more favourable interest rate. The annual payments of principal and interest on the loan would be paid out of revenues under the 30-year Lansdowne agreement between OSEG and the city.
Had the agreement with OSEG never happened, several councillors pointed out, the city would have spent more than $50 million over 10 years just to maintain the deteriorating arena building.
Approving the proposed settlement came after the committee received its annual report on the Lansdowne Partnership Plan.
In addition to outlining the highlights of the first year, the report revealed that extra costs have wiped out the possibility that the city will turn a profit on the project and reduced OSEG's share as well.
Capital Coun. David Chernushenko — who initially voted against Lansdowne but has said he wants to work constructively to help make it a success — raised a number of concerns, including the health of the Ottawa Farmer's Market, the condition of the Aberdeen Pavilion's roof, the restaurant-heavy retail mix, and a lack of integration between Lansdowne and the Glebe's traditional business area.
The councillor said he also wants a better mix of activities at Lansdowne, as opposed to just large-scale sporting and music events with amplified sound.
Although he's a big booster of the redevelopment, Mayor Jim Watson told reporters he'd like to see improvements to the underground parking lot to make it less confusing for drivers. (Work is underway now and should be done by Christmas, OSEG says).
The mayor also noted a lack of trees and greenery on the site and said he'd like to see more activity in the Aberdeen Pavilion and Horticulture Building, which he says is now his favourite building in Ottawa.