In the latest Lansdowne Park redevelopment plan by the City of Ottawa, the auditor general’s office highlights risks related to tariffs, construction timeline, and revenue assumptions for the Redblacks. The city has set a “minimum buffer” for potential cost overruns despite facing uncertainties.
Auditor General Nathalie Gougeon has updated her assessment, emphasizing the risks involved in tearing down the Civic Centre to construct new north-side stadium stands and a smaller arena. The report will be presented to the audit committee ahead of the city council’s vote on spending approximately $483 million at the Glebe site, mainly funded through debt.
The allocated budget includes $418.8 million for the new arena and north-side stadium stands, $19.2 million for underground parking, and $45.9 million for retail space. However, Gougeon notes that the retail cost estimation is preliminary and subject to change.
Gougeon’s report emphasizes the risks associated with the city’s extended partnership with the Ottawa Sports and Entertainment Group (OSEG) until 2075, highlighting challenges in forecasting revenues and expenses accurately.
The City of Ottawa is responsible for the costs and potential overruns in building Lansdowne 2.0. The auditor warns about uncertainties in soft costs, rising prices, and integration of retail with towers to be developed by Mirabella.
Concerns are raised about potential tariffs on materials and their impact on costs and supply chains. The city faces risks such as project delays, disputes, and budget overruns due to tariff adjustments.
Penalties may be incurred if construction falls behind schedule, triggering payments to Mirabella. The city also anticipates business interruption costs during events and construction activities.
Gougeon suggests that the city’s 10% contingency may be insufficient for a project of this size and duration, emphasizing the importance of thorough risk assessment.
The funding strategy for Lansdowne 2.0 involves drawing from capital reserves and accruing debt repayment funds annually. Gougeon raises concerns about the opportunity cost of allocating funds for the project instead of other municipal needs.
The city aims to cover project debts with new revenues, including retail and Redblacks ticket sales. However, the auditor questions revenue assumptions for the Redblacks, highlighting discrepancies in revenue growth and operating expenses projections.
The audit report findings will be crucial for the city council’s final decision on the project, considering the financial risks and uncertainties outlined by the auditor.