Shortly after the release of a much-anticipated report regarding the proposed Lansdowne 2.0 redevelopment initiative, the City of Ottawa and Ottawa Sports and Entertainment Group (OSEG) have reported another year of net losses stemming from the initial renovation.
This update was included in the partnership’s annual report for the fiscal year 2024/25, which provided a bleaker outlook for Lansdowne’s financial prospects in its current structure. The report was released to the public late on Monday.
Net losses totaled $11.1 million, which is $1.9 million worse than the previous fiscal year. This occurred despite a six percent increase in revenue, as operational costs surged even higher.
Although operating income remained positive, it was lower than the prior year. However, increased interest and financing expenses pushed the overall results into a deficit.
The partnership has reported losses each year since its inception a decade ago and has yet to make any payments to the city.
The latest annual report for the downtown site shows a net loss of $11.1 million. Supporters and opponents of the latest redevelopment plan are weighing in.
The report further revises the partnership’s future outlook based on the latest findings and financial plan.
It now anticipates a reduction in expected distributions over the lifetime of the partnership totaling $42.7 million, or 16 percent.
The report continues to project zero distributions to the city throughout the 40-year duration of the agreement, although contributions will persist for a lifecycle fund dedicated to the stadium and arena complex.
Poor playoff performance partly to blame
Mayor Mark Sutcliffe indicated that the partnership should not be regarded as a profit-generating venture for the city, but rather as a community asset.
“It belongs to the citizens of Ottawa. It has served as a fantastic venue for farmers’ markets, Christmas markets, world-class events, the World Junior Hockey Championships, rugby competitions, and cultural happenings,” he stated on CBC Radio’s Ottawa Morning on Tuesday.
“It has been a significant success, but we now find ourselves at a pivotal moment.”
The projections are grounded in the existing partnership and facilities, rather than the forthcoming Lansdowne 2.0 proposal that is set to be reviewed by the council next month.
Sutcliffe has contended that reconstructing the arena and the stands of the north stadium is essential for the financial viability of the partnership.
Previous annual reports had already scaled back the forecasts for Lansdowne 1.0, which is currently $91 million less than its projections in 2012.
The most recent forecast stems from a new set of assumptions that lower anticipated revenues from concerts and events, along with increased interest expenses due to the consolidation of the partnership’s mortgage and lines of credit.
Capital ward Coun. Shawn Menard, who opposes the Lansdowne 2.0 development, interprets the partnership’s current financial struggles in a markedly different light compared to the mayor.
“The initial projections provided to Ottawa residents did not materialize,” he remarked.
“It seems illogical to continue with the same strategy employed in Lansdowne 1.0 and claim that Lansdowne 2.0 will be sustainable with the same type of revenue.”
The report attributes the 2024/25 financial results partially to the underwhelming performance of the Ottawa Redblacks and Ottawa 67’s, as well as a non-cash loss related to a financial instrument known as an interest rate swap.
While the Redblacks qualified for the playoffs last season, they only participated in one away game. The 67’s failed to reach the playoffs entirely, and their game attendance fell short of expectations.
On the other hand, the performance of Lansdowne’s retail components was comparatively more favorable.
