Ian Lee is a Director of the MBA Program at the Sprott School of Business, Carleton University. At the Friends of Lansdowne Public Meeting held June 17th at the Civic Centre, Professor Lee spoke on the finances surrounding the Lansdowne project. In an opinion piece published in the Ottawa Business Journal, Mr. Lee gives a summary of his arguments against the Lansdowne Deal.

Ottawa's councillors are about to vote on a very large capital project at Lansdowne Park, one that will irrevocably transform the core of the capital city of Canada.

Yet, this major, multimillion-dollar project was not even debated in the last municipal election four years ago.

A competitive process approved by the democratically elected council of Ottawa was cancelled, behind closed doors, by an unelected public servant. This was done to create a horrendously complex public sector-private sector partnership, that will effectively transfer a major public park to control by a private consortium to build yet another shopping centre in Ottawa and yet more condos, on the basis that the shopping centre and its retail stores at Lansdowne will be unique.

My question, then, is why does Mr. Greenberg claim that existing retailers – already doing business in Ottawa – have contacted him to move to the proposed Lansdowne shopping centre? Where is the uniqueness?

Now, the Lansdowne lobbyists are desperately trying to force city council to approve this major public expenditure only 115 days before the 2010 municipal election on Oct. 25.

But no major capital expenditure worth hundreds of millions of dollars should be approved in the dying days of any city council, shortly before the next election. Democratic elections produce legitimacy and thus the political authority to make major decisions.

Indeed, it was the previous city council, in its dying days, that approved the Siemens LRT contract – only to have it cancelled by the incoming council.

The Lansdowne proposal is a bad deal and should be rejected for the following 10 reasons:

1. The proposal is a failure of governance as an unelected municipal public servant overturned the decision of a council democratically elected by the citizens of Ottawa;

2. It is unethical, as council is privatizing a public park through the back door using 30-year leases with a surplus disposal clause to sell the land to OSEG without competing bids – sole-sourced selling piled on top of sole-source contracting – and not through the front door of severing, rezoning, and selling public park land via public auction;

3. It's bad public policy as it involves a sole-sourced contract prohibited under federal and provincial procurement practices, and prohibited under NAFTA, WTO and the Canadian Agreement on Internal Trade (AIT) between the provinces;

4. It's bad public policy because a sports and entertainment monopoly is being created in Ottawa that will prohibit competition from other sports and entertainment companies such as the Ottawa Senators, and will stop the Ottawa Senators from building a soccer stadium;

5. It's a bad public-private-partnership deal because in every P3 negotiated in Canada, the private partner provided the capital and government provided the land – while with the proposed Lansdowne deal, Ottawa taxpayer provided both the land and the capital;

6. It's bad public finance as there are several major capital projects already underway or being discussed by Ottawa city council including the new Convention Centre, LRT, sewer renewal, new trade show building at Ottawa airport, move of the Ottawa Ex to the south of Ottawa, Lansdowne parking garage, OC Transpo bus renewal, OC bus garage – that could increase the city’s indebtedness from a half a billion to $2 billion, or $3 billion, or even $4 billion;

7. It is bad capital project planning as there is no integrated comprehensive capital planning to force the prioritization of these projects in terms of importance and value to citizens;

8. It is bad budgeting for every councillor knows there will be significant cost overruns on LRT, on sewer renewal, on Lansdowne – as there are with almost every capital project every where.

9. It's bad economics because councillors know that interest rates are going up significantly due to the sovereign debt crisis – the CEO of the largest bond trading firm in the world Bill Gross, Eric Sprott, Dr. Roubini and even Alan Greenspan finally understand this (as he indicated in a Wall Street Journal op-ed last week).

10. It is bad politics because city council is telling citizens that citizens can have all these projects that could in aggregate cost $3 billion or $4 billion, and our taxes will not even go up one dime – remember “zero means zero” – really? This is dishonest, for there is no such thing as a free lunch.

If the back-door privatization of Lansdowne Park to build a shopping centre and condos is such a good deal for citizens, and if it is only the Glebites opposed – as claimed by the Lansdowne lobbyists – then why not put this issue to the ultimate reality check?

Put it to the vote of citizens on Oct. 25 to produce a resolution.

The newly elected council on Oct 25 – fresh with a new mandate and fresh legitimacy – can make the Lansdowne decision the very first vote of the new council the first time they meet after election day.

Published on June 25th, 2010
Ottawa Business Journal