Hours after the release of a long-awaited report concerning the proposed Lansdowne 2.0 redevelopment initiative, the City of Ottawa and Ottawa Sports and Entertainment Group (OSEG) have revealed another year of financial losses stemming from the original renovation project.
The partnership’s annual report for the 2024/25 fiscal year, disclosed on Monday, painted a bleaker financial outlook for Lansdowne in its current state. Despite a six percent increase in revenue, net losses amounted to $11.1 million, a $1.9 million deterioration compared to the prior fiscal year. This downturn was primarily due to escalating operating expenses outweighing the rise in revenue.
Although operating income remained positive but lower than the previous year, increased interest and financing costs pushed the final figure into the negative territory. The partnership has consistently reported net losses since its inception a decade ago, never having made any payments to the city.
The report also revises the partnership’s future outlook based on the latest financial results and budget. It now anticipates a $42.7 million reduction in distributions over the partnership’s lifespan, equating to a 16 percent decrease. Despite ongoing payments to a lifecycle fund for the stadium and arena complex, the forecast still projects zero distributions to the city throughout the 40-year agreement term.
Mayor Mark Sutcliffe emphasized that the partnership should be perceived as a communal space rather than a profit-making venture for the city, highlighting the various community events and activities held at Lansdowne. He acknowledged the need for a strategic reevaluation given the current circumstances.
The latest financial setbacks were partly attributed to underperformance by the Ottawa Redblacks and Ottawa 67’s sports teams, as well as a non-cash loss on an interest rate swap. While the Redblacks reached the playoffs but played only one away game, the 67’s failed to qualify for the postseason, with attendance falling short of expectations. On the retail front, Lansdowne saw more positive results.
Capital ward Coun. Shawn Menard, critical of the Lansdowne 2.0 development, disagreed with the mayor’s perspective, arguing against repeating the same strategies that led to the financial challenges of Lansdowne 1.0 for the upcoming redevelopment plan.
The report’s financial projections underscore the necessity of rebuilding the arena and north stadium stands to ensure the partnership’s financial viability. The forecast reflects lower expected earnings from events and concerts, alongside increased interest costs due to mortgage consolidation and credit line adjustments.
The upcoming Lansdowne 2.0 plan, pending council approval next month, aims to address these financial concerns and chart a sustainable path forward for the partnership.
