The latest Lansdowne Park redevelopment plan by the City of Ottawa includes a “minimum buffer” for potential cost overruns, despite facing risks related to tariffs and the construction timeline. Ottawa’s auditor general, Nathalie Gougeon, has updated her assessment of the project, expressing concerns about the aggressive revenue assumptions tied to the Redblacks, which do not align with the CFL team’s historical performance.
The auditor general’s report highlights the financial intricacies of the plan, emphasizing the uncertainties surrounding revenue projections and the extended partnership with the Ottawa Sports and Entertainment Group (OSEG) until 2075, rather than the initial 2066 timeline. The report does not dictate council decisions but aims to inform them of the risks associated with the project’s costs and financial outlook.
Regarding construction risks, the City of Ottawa may face budget challenges due to potential delays, design changes, and coordination issues. The city is set to enter a contract with EBC Inc. for the construction of the new arena and stadium stands, with fixed hard costs but exposure to soft cost fluctuations and tariff impacts.
The report also delves into penalties related to Mirabella’s towers and the potential business interruption costs during construction. It raises concerns about the adequacy of the project’s contingency fund and the city’s funding strategy, which could divert funds from other municipal needs.
In terms of revenue generation, the city anticipates covering the project’s debt through new revenues, including retail and Redblacks ticket sales. While the assumptions on retail revenue are deemed reasonable, doubts linger over the Redblacks’ revenue growth projections and operational expenses.
The audit report’s findings will be presented to the audit committee before the city council’s vote on the $483 million spending proposal for the Lansdowne Park redevelopment. The public and city officials have expressed varied opinions on the project’s risks and financial implications, with ongoing discussions on the best approach to mitigate potential challenges.