Lansdowne partnership records net loss for tenth straight year

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Despite more events, a full roster of retail tenants and increased revenues, Lansdowne Park recorded another net loss — its tenth consecutive loss — in its partnership with the City of Ottawa.

The city’s finance committee examined Tuesday the Lansdowne Annual Report, which declared a $9.2-million net loss for the 2023-2024 fiscal year.

The Lansdowne Partnership Plan represents a collaboration between the City of Ottawa and the Ottawa Sports and Entertainment Group (OSEG).

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The annual report on the public-private partnership, launched in October 2012, said total revenues reached a record $59.5 million in 2023-24, a four-per-cent increase from the previous year. Lansdowne played host to 180 ticketed events — up from 170 — while its retail and office space were fully leased, the report said.

The partnership’s financial results were hurt by the Ottawa Redblacks, who suffered their fourth consecutive losing season and missed the 2023 Canadian Football League playoffs. That meant $1.9 million in projected revenues failed to materialize.

Asset depreciation coupled with more borrowing and higher interest rates also contributed to the net loss. Under terms of the partnership deal, OSEG is responsible for losses at Lansdowne.

Last year, the “cash loss,” a key business metric, totalled about $6 million, the committee heard.

The debate over this year’s financial report took on additional meaning with final consideration of the $419-million Lansdowne 2.0 project scheduled for late this year at city council.

OSEG President and CEO Mark Goudie told the committee that Lansdowne had a successful year, attracting more than four million visitors, providing 400 jobs and injecting $300 million into the local economy.

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“It really has reclaimed its role as Ottawa’s gathering place and the hub of sports and entertainment in our region,” he said.

Goudie pointed to that success — and to its ongoing cash loss — as arguments in favour of Lansdowne 2.0, which would see the city invest in new north-side stadium stands and a new hockey arena.

Others didn’t see it that way.

Capital Ward Coun. Shawn Menard noted the project had never lived up to its original revenue projections and said the latest report highlighted more areas of “deep concern.”

“I’m concerned that the only cure to Lansdowne 1.0 is doing the exact same thing with Lansdowne 2.0,” he said. “That’s not going to help. You all know that these projections are optimistic.”

Menard called for city staff to come back to council with a report on what it would cost the city to refurbish Lansdowne’s sports facilities, rather than investing in new ones.

Goudie said Lansdowne 2.0 would allow OSEG to bring more events and more people to the site and would create new revenue streams from premium club seats and other high-end features.

Goudie conceded revenue projections made in 2012 were based on “very optimistic assumptions,” which have not proven to be achievable in the challenging sports business world.

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“Sports is hard,” he said, “the economics of sports is hard. And, you know, we continue to get to that place where we need to be, which is financial sustainability.”

Several delegates also spoke in opposition to Lansdowne 2.0, given the financial performance of Lansdowne 1.0.

John Dance, a member of the Old Ottawa East Community Association, said Lansdowne had been a financial failure for which no one had taken responsibility. Dance urged councillors to stop moving in the direction of Lansdowne 2.0 before understanding what went wrong with the first version of the project and considering alternatives.

“You’re putting taxpayers and the whole city in jeopardy,” he charged.

Carolyn Mackenzie, planning chair of the Glebe Community Association, said another large investment in Lansdowne would make it harder for the city to invest in LeBreton Flats, where the Ottawa Senators want to build a new arena, and in downtown Ottawa, where the board of trade has called for a $500-million makeover.

“Let’s not pretend that we can afford to do it all,” she said.

Mackenzie noted OSEG continued to shield key financial information from the public, including an understanding of how steeply rents were being discounted to fill Lansdowne’s retail and office space.

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