November 7, 2025 Newsletter

Today, I opposed the $418.8-million Lansdowne 2.0 redevelopment. My opposition to this project has been consistent and my concerns relate to the fiscal structure of this proposal and the level of financial risk it presents to taxpayers.

This Council is being asked to approve $418.8 million in public spending based on a financing model that relies heavily on projected rather than guaranteed revenues. The proposal depends on projected property taxes from residential towers not yet constructed, ticket surcharges from teams whose lease commitments extend legally only to 2032, waterfall payments that have not materialized under the existing partnership agreement, and partnership distributions weighted to arrive after 2050.

This financing approach warrants careful scrutiny.

According to the staff report, this project requires $17.4 million per year in debt servicing for 45 years, totaling $783 million in debt payments. Staff projections suggest offsetting revenues will reduce the net annual cost to $4.3 million. However, of these offsetting revenues, only $300,000 in ticket surcharges represents contractually guaranteed income. The remaining revenues are projections based on assumptions about future performance.

Justice William Hourigan's LRT inquiry report identified “optimism bias” as a significant factor in project failures – the systematic tendency to overestimate benefits and underestimate costs in major infrastructure projects. His report documented how this affected the LRT project with substantial financial consequences. The financing model before us today exhibits characteristics that Justice Hourigan identified as problematic: reliance on optimistic projections rather than more conservative estimates, limited stress testing, and insufficient contingency planning.

The Auditor General’s follow-up report quantified the risks inherent in this optimism. The financial model projects football revenue growth of 9.85 per cent annually in the short term. Actual performance tells a different story: last year’s growth was 0.67 per cent. Over the past three years, average growth was 5.07 per cent. The Auditor General has calculated the consequence: if we use realistic growth rates based on historical performance, we lose $53 million in expected revenue from distributions. If operating expenses grow at 2.25 per cent rather than the projected 2 per cent, we lose an additional $31 million. If the Redblacks depart after 2032, we lose $18 million more.

These risks are not mutually exclusive. Multiple risks materializing concurrently could produce cumulative impact exceeding $100 million in additional costs.

The financing structure presents other concerns. The proposal treats incremental property taxes as new revenue, although these taxes would be collected under normal municipal operations. It presents the $65-million sale of air rights at the Lansdowne site as offsetting project costs while committing to $418.8 million in expenditures. The debt service schedule beginning in 2031 relies on partnership distributions projected to arrive after 2050. The partnership has operated at a loss for 12 years, yet projections assume future profitability.

This approach differs from standard municipal infrastructure financing practices.

Regarding the affordable housing allocation, Council directed that funds from the air rights sale be allocated according to its Affordable Housing Land and Funding Policy. The initial staff report indicated $14.4 million would been allocated, representing a reduction. I am pleased that a motion was presented to rectify this situation to bring the total affordable housing contribution to $19.4 million.

The Professional Women's Hockey League has made public statements regarding the proposed venue capacity, describing it as "not viable" and stating the reduced capacity represents "a tough pill to swallow" with "not a financial model that makes any kind of sense." These statements from a proposed anchor tenant merit consideration when evaluating project assumptions.

The legal agreements indicate team commitments extend to 2032 – seven years forward. Financial projections, however, assume continued operations and revenue generation through 2075, a 43-year period beyond contractual commitments. This represents a substantial assumption in the financial model.

The proposal involves demolishing approximately $12 million in retail infrastructure constructed in 2014, writing off $15 million remaining on recently completed roof repairs, removing 117 mature trees and 58,000 square feet of greenspace, eliminating a $2-million artwork and replacing facilities that engineering assessments indicate have structural life extending to 2054 and beyond. The total value of existing assets and recent capital investments being removed exceeds $50 million. This represents a significant write-off of public investment.

The staff report does not include scenario analysis showing project outcomes under less favorable conditions. No stress testing is provided for scenarios including property value decline, continued partnership losses, increased competition from other venues, or interest rate increases before 2030 debt issuance. This absence of contingency analysis limits Council's ability to assess risk exposure.

The termination provisions extend to 2075, with penalty structures that include payment of all projected revenues through 2075, all partnership equity, and accumulated interest. These provisions create long-term commitments with limited flexibility for future Councils.

I have supported infrastructure investment and responsible debt authorization in the past. However, this proposal presents concerns regarding financial structure, risk allocation, and reliance on unguaranteed revenue projections over an extended timeline.

The Hourigan Report documented how optimism bias contributed to significant cost overruns and project difficulties in the LRT initiative. The report identified specific warning indicators: unrealistic timelines, understated risk assessment, overstated benefit projections, and insufficient contingency planning. Several of these indicators appear present in the current proposal.

The fundamental question is not whether Lansdowne Park requires capital investment. The question is whether this specific proposal, with this financing structure, at this cost level, represents prudent fiscal management and serves the public interest effectively.

When a financing model relies primarily on projected rather than guaranteed revenues, when a major tenant has expressed concerns about facility viability, when substantial recent capital investments must be written off, and when stress testing and contingency analysis are absent, these factors warrant serious consideration.

Council’s responsibility to taxpayers requires infrastructure investment based on sound financial analysis and appropriate risk management, not optimistic projections without adequate contingency planning. Consequently, my vote was a resounding no at Council today and at Finance and Corporate Services Committee last week.