The following discussion describes the work elements recommended in each stage of the Implementation Plan. Document 2 to this report provides more detail on these activities in chart form. Document 3 to this report summarizes the cost estimates associated with completing the work in Stage One. Recommendation 2 summarizes the more significant elements with defined outcomes to be achieved. Specifically, Recommendation 2 includes specific outcomes on the business case, the governance model, the development concept, transportation, retail mix, heritage, relocation of the Trade and Consumer Show space and the CCEA, and consultation for the front lawn design and programming, including the Ottawa Farmer’s Market.

STAGE ONE – Refine LPP Agreement – November 2009 to May 2010

1. Evaluation of Business Terms

1.1 Definition of Business Terms

The City will use its internal resources, together with outside business experts in the operation of sports franchise and sports facility management, to narrowly define the business terms. This work will assist in the creation of the terms and conditions in the legal agreements.

1.2 Quantification of Life Cycle Obligations

It is critical that the City’s stadium refurbishment investment be maintained over the term of the Partnership Agreement with OSEG is the understanding that funds are to be contributed to a lifecycle reserve fund to maintain the stadium for continued operation over the term of the partnership agreement. A baseline annual contribution to a City controlled capital account is the first payment in the distribution of net cash flows. A third party audit of the stadium condition, considering the proposed refurbishment plan, is required to establish the annual payment into the lifecycle fund. The audit will contain provisions for a periodic review of the building condition and an update to the reserve account requirements.

1.3 Realty Tax Review and Confirmation

The Implementation Plan allows for a detailed assessment of the forecasted property tax revenues to be paid by the retail and commercial development proposed by the LPP with the Municipal Property Assessment Corporation (MPAC). The task is to assess the projected tax revenue calculations presented in the original LLP and to update them for any proposed revisions to the development scheme.

1.4 Evaluate and Revise Business Model

The financial projections in the business model will change with variations to the development scheme and with changes in the real estate market. The Implementation Plan will include a financial analysis to evaluate the implications to the partnership under alternate development scenarios, changing interest rates, rental rates and land values. The sensitivity of the business model will also be analysed to consider the impact of the refined lifecycle obligations and to consider the realty tax revenue implications. Third party subject matter experts will be used to confirm the continued reasonableness of assumptions.

2. Negotiation of Project Agreement Framework

2.1 Partnership Agreements

The core task of the Implementation Plan is to frame the partnership agreements. These agreements will outline the roles, responsibilities and obligations between the City and OSEG as described in the LPP Memorandum of Understanding presented to Council on September 2, 2009 and redefined under the critical business terms. The project agreement framework will have sufficient detail to enable ready comprehension of the business elements and their implications. The agreements will cover the project development, partnership, site management, construction management, lease agreements and parking operations. The negotiations will incorporate third party agreements that relate to operations such as the football and hockey franchises and mortgage agreements. The intent of the Implementation Plan is to bring these documents to an 80% completion level that would allow Council to delegate the authority to subsequently finalize the actual project agreements.

2.2 Termination Agreement

This agreement will deal with the conditions and costs under which either the City or OSEG could choose to terminate the project agreement prior to the commencement of construction, including the option to terminate the project agreement for convenience at a predetermined cost. Neither party needs to be in default under the Project Agreement nor any of the other agreements set out under the City and OSEG Agreement Framework for the other party to exercise this option. Thus, it is viewed as a “no-fault” option. The legal obligations of the party exercising the option to the recipient would be fulfilled upon payment of the predetermined cost. The predetermined cost will be negotiated and agreed to between the parties in advance of the signing of this agreement to provide clarity and certainty to the parties.

2.3 Complete Third Party Review of the Business Plan

In keeping with Council’s direction to have an independent party conduct an evaluation of the final assumptions and resulting financial forecasts for the proposed LPP, it is recommended that the Office of the Auditor General (OAG) be engaged to conduct a concurrent audit of these considerations, as per Recommendation 2 (a) (i) of this report, in order that the OAG can report in this regard prior to May 2010.

3. Develop Corporate Governance

It is important that an effective governance model for the LPP be established to ensure the long-term sustainability of Lansdowne Park, its infrastructure, and the OSEG partnership. Initially governance oversight will be focused on the implementation of the redevelopment plan. Once the site is redeveloped, the governance focus will shift to oversight of the ongoing operations and programming of Lansdowne Park. The success and strength of the LPP rests on the commitment of the partners and their collective contribution to providing programming that suits Council’s objectives for the site and ensuring the site is effectively maintained over the short and long-term.

3.1 Municipal Service Corporation (MSC)

The City has the option of establishing a MSC for the purpose of overseeing the operation and programming of Lansdowne Park pursuant to Section 203 of the Municipal Act, 2001. An MSC is also subject to the provisions contained in Regulation 599/06. Such a governance model would allow Council to create a corporate body that would possess the necessary expertise at an operational level to implement the plan and subsequently oversee the ongoing operations and programming of Lansdowne Park.

Similar to the City’s relationships with Hydro Ottawa and the Ottawa Community Housing Corporation, the City would be the sole shareholder of the MSC. Council would establish the criteria and competencies for the board of directors of the MSC and establish the broad policies to be followed by the board through a unanimous shareholder’s declaration. Council could designate that the board membership include several councillors. The remaining members of the board could be comprised of local business leaders, community stakeholders and programming specialists.

The advantages of the City establishing an MSC include:

o The establishment of a corporation with a separate board and management permits the City to involve senior experienced members of the community through the board, and engage experienced senior management for the corporation, where necessary, to create significant expertise in the intended area of endeavour of the company;

o Separating the functions of a given area to a corporation permits the company to make more expeditious decisions than the Council of a municipality;

o The City, as sole shareholder of the corporation, may use a unanimous shareholder’s declaration to establish overriding policy to be followed by the board of directors of the corporation and can restrict the board’s scope of authority, to the extent desired by the City;

o The Council of the City, as shareholder, will also be responsible for appointing the Board of the corporation, providing additional overall influence on the corporation;

o A company provides limited liability to the City; Thus, a municipal service corporation provides the balance of having, on the one hand, a separate legal entity with a separate board and management to carry out its objectives, while on the other hand, permits a structure to fulfill the City’s objectives while allowing for reasonable controls through the use of a unanimous shareholder’s declaration.

o The City may also choose to appoint one or more City staff members (or members of Council) to the board of the corporation to “have a voice” on the board and to transmit, in an effective manner, approaches deemed appropriate by Council and its senior staff; and

o An MSC is entitled to borrow money. To the extent desired, this may be considered a benefit. The ability to borrow (or limitations on borrowing) may also be controlled by a unanimous shareholder’s declaration, as discussed above.

The disadvantages of the City establishing an MSC include:

o The use of a MSC is tantamount to delegation of authority of Council in the stated areas of endeavour of the corporation. Thus, an MSC would only be utilized where the advantages described above are appropriate in an area to be delegated to the corporation;

o Further to the comments above, to the extent that freedom of action is permitted to the corporation and its board, there is, of course, a corresponding reduction in the scope of approvals by Council (although this may be controlled through the use of a unanimous shareholder’s declaration, as discussed, as well as the by-laws of the corporation);

o When the corporation is established, the City will be required to provide the corporation with seed capital to commence its operations, as well as any assets that it may require to fulfill its functions. It should be noted that as currently established Section 203 of the Municipal Act, 2001, and the related Regulation 599/06 does not permit an MSC to create subsidiary companies.

Process Considerations in Establishing an MSC

An MSC established under Section 203 of the Municipal Act, 2001, may be incorporated under any corporate statute and becomes subject to the relevant provisions of that corporate statute and general corporate law.

Share capital corporations are generally more advantageous to use than non‑share capital corporations, unless the specific attributes of a non‑share capital corporation are important to the objectives to be achieved. Share capital corporations are incorporated under the modern business corporation acts, such as the Ontario Business Corporations Act. This Act contains a number of updated provisions that create significant practical advantages in utilizing companies incorporated under it. Hydro Ottawa, for example, was incorporated under this Act.

The practical advantage of using a share capital corporation is that the business community and the lending community are far more familiar with share capital corporations. Thus, business transactions are conducted more easily (although, there is no legal issue in carrying on business through a non‑share capital corporation).

Mechanics of Establishing an MSC

Under Section 6 of Regulation 599/06, the City is required to adopt a business case study before it can use its powers under Section 203 to establish a corporation. Furthermore, in future, should the articles of such a corporation be amended, the City must similarly first adopt a business case study.

Under Section 7 of Regulation 599/06, the City is required to adopt and maintain policies on asset transfer to a corporation, before the City transfers any assets to such a corporation. Section 8 of the Regulation provides that before establishing a corporation, the City shall consult with the public about the proposal to establish the corporation. The use of the word “proposal” therefore implies that the public consultation be held prior to Council approving the incorporation of the MSC. This requirement has arguably already been fulfilled as this part of the LPP was highlighted as an option in the six public consultation sessions held in late September and early October of this year.

Directors and officers of a corporation are deemed to be members for the purposes of the Municipal Conflict of Interest Act. The Corporation or the MSC is deemed to be a local board for certain limited purposes, including the purposes of the Environmental Assessment Act and the Municipal Conflict of Interest Act. Furthermore, a wholly-owned MSC is deemed to be an “institution” for the purposes of the Municipal Freedom of Information and Protection of Privacy Act.

Summary Regarding an MSC

An MSC provides a governance model for the LPP with a number of practical advantages to facilitate the oversight by Council of the ongoing operations and programming of Lansdowne Park. Council has previous experience with similar corporate governance structures in Hydro Ottawa and the Ottawa Community Housing Corporation. However, it is important to note as identified in the September 2, 2009 LPP report, the LPP is not conditional on the establishment of such a corporation. Should Council decide not to establish an MSC the City, through Council and its staff, would deal directly with OSEG in overseeing the operations and programming for Lansdowne Park.

3.2 Municipal Capital Facilities Agreement

As the LLP moves forward issues will need to be addressed pertaining to the Stadium and Civic Centre components from a realty tax perspective. Presently only a small portion of the complex is used by commercial groups – Aramark Sports and Entertainment and the Ottawa 67’s. These organizations remit realty taxes based on a percentage of the Lansdowne Park Property Tax Assessment. Under the LLP, the assets will remain City owned but will be managed and operated by a private sector partner seeking profit. The use of the municipal facility in this manner will result in the Municipal Property Assessment Corporation (MPAC) reconsidering the “assessment exception” for the current City operated portions of the property. Work is required to define what portions are to remain designated as a municipal facility and to detail these calculations in a Municipal Capital Facilities Agreement with the OSEG.

3.3 Workplace Transition Agreement

The Workplace Transition Agreement would highlight collective agreements that are currently in place for the City workforce at Lansdowne Park and would require OSEG to acknowledge and respect them should it be determined to be a successor employer to the City. Should any current City employees at Lansdowne become part of the OSEG workforce the City would be required to compensate OSEG for any unfunded liabilities (e.g., banked sick leave, etc.) for the employees.

4. Refine Development Concept

The development concept for the revitalization of Lansdowne Park set out in the LPP report received by Council on September 2, 2009, was developed to respond to, and advance, not only Council’s specific directions, but also to respond to and advance the strategic directions of the Official Plan (OP). These relate to intensification, mixed use, sustainable transportation, creating people places, and generally to contribute to sustainable city building. The efforts undertaken in determining the development concept ensured that it would be responsive to the specific policies of the OP related to its Strategic Directions, and policies for development along Traditional Mainstreets and within the General Urban Area. The key directions of the OP that influenced the development concept are highlighted in Document 4 to this report.

The OP and its various directions will continue to be a key frame of reference for the works to be undertaken as set out in this submission to further define the development program for the LPP and to build on the development concept received by Council on September 2, 2009.

The work undertaken to date in determining the development concept involved extensive due diligence. This work helped to ensure that the development concept could be realized and identified additional work needed to develop the plan prior to Council’s final consideration. Key elements of this work that have also been highlighted by Council and through the public consultations relate to transportation, heritage, retail size and mix and front lawn design and programming. The additional work recommended to be undertaken related to the refinement of the development concept is highlighted below.

4.1 Master Site Plan

The concept site plan included in the September 2, 2009, LPP report provides a depiction of how Lansdowne Park could be redeveloped under a partnership agreement with OSEG. To further develop the LPP and the details of the partnership agreement as it relates to the physical redevelopment and revitalization of Lansdowne Park, and to serve as the basis for initiating the required planning approvals, requires that the concept site plan be developed into a master site plan. This revised master site plan would then form part of the information presented to Council for their final consideration and would be a prerequisite to the partnership agreement.

The master site plan would provide a greater level of detail for the development program than what was previously provided in the site concept plan. The specifics of these details would be determined through the additional works that will be undertaken as set out in this report. Key elements include details related to the size and specific locations for the new development, details for the front lawn design, on-site circulation for vehicles and pedestrians on-site parking and phasing of the development.

Further to the additional works that will be undertaken to develop the master site plan, consultation will also be undertaken with the National Capital Commission Design Review Panel as was directed by Council on April 22, 2009.

4.2 Retail Strategy

In developing the LPP, a market study was commissioned by OSEG to determine the market support for the proposed retail component of the Lansdowne Park development program. The Glebe Business Improvement Area (BIA), with financial support from the City, also commissioned a market study. These two studies: the Lansdowne Retail Market Demand and Impact Analysis produced by Tate Research Inc. for OSEG and the Market Research Study: Glebe Business Improvement Area Ottawa, Ont. produced by the Market Research Corporation for the Glebe BIA, have resulted in different conclusions. These differences are attributable to differing methodological approaches. Market Research Corporation undertook a residual retail analysis, whereas, Tate Research Inc. undertook a market impact analysis.

Ensuring the appropriate types, volumes and mixes of retail uses is necessary for Lansdowne Park to become a destination that both compliments and supports existing retail businesses in the area. These considerations are critical to the success of the LPP. The objective of the retail development is that it would contribute to creating a unique retail experience focused on food, entertainment and lifestyle.

On October 27, 2009 representatives from OSEG, Tate Research Inc., the Glebe BIA, and Market Research Corporation met at the request of the City Manager. The purpose of the meeting was to enable James Tate of Tate Research Inc. and Barry Nabatian of Market Research Corporation to review their research methodology and results. At this meeting it was determined that a third peer review of both studies was necessary.

Prior to initiating the peer review, OSEG must provide more definition regarding the proposed retail strategy including confirmation of the sizes, mixes and types of the various retail uses to be accommodated.

Completing the peer review will clarify the basis for the different conclusions reached by these studies and confirm whether or not the retail component of the LPP is viable, compatible and consistent with the direction to have destination specific retail that will be complimentary and supportive of the existing retail business community along Bank Street in the Glebe and Old Ottawa South.

4.3 Transportation Strategy

Transportation is a critical element of the LPP that needs to be fully addressed through the development of a comprehensive Transportation Demand Management (TDM) plan. The work done to date has produced a strategy for dealing with transportation that is based on a level of assessment that indicates that the strategy developed can be implemented and can operate effectively. This strategy serves as the basis for undertaking a more detailed transportation study and the development of the required TDM plan. The Transportation Strategy and the elements to be addressed as part of the required TDM were presented and discussed at a Joint Transit Committee and Transportation Committee meeting on October 8, 2009.

Key elements of future work to be undertaken as part of the more detailed transportation study and the TDM plan include the following:

Securing satellite parking agreements with Carleton University and Confederation Heights;
Confirming the details of the levels of transit service to be provided to support day-to-day activities, stadium activities and events of different sizes;
Confirming the specifics of traffic management requirements to support day to day activities and stadium activities and events of different sizes;
Confirming the cost to provide transit service and traffic management for stadium events and activities to determine the transit fee to be applied to event tickets;
Undertaking further discussions with the NCC to confirm past practices for continued use of the Queen Elizabeth Driveway (QED) for transit for larger stadium events to provide links to satellite parking;
Confirming the extent of on-street parking in the area that could be available during major stadium events to assist in determining the amount of satellite parking required;
Discussions with Paul’s Boat Line and Parks Canada regarding boat shuttles as an alternative means of transport for major stadium events;
Discussions with private transit operators to secure agreements related to providing shuttle service from satellite parking to the site for major stadium events;
More detailed traffic impact assessments for daytime activity and after hour events based upon the details of the transit service to be provided, traffic management to be utilized, and potential for any additional use of the QED to minimize impacts on Bank Street, and accounting for potential use of on-street parking in the neighbourhood related to major events. The assessment would also need to look at overlaps between the on-site commerce activities and events;
Determining needs for off-site staging and the storage of larger vehicles for major events (this would include tour buses and securing agreements with owners of lands where off-site staging and vehicle storage could be accommodated);
Completing a detailed on-site circulation plan for day to day uses and activities and for stadium events and a loading plan for commerce; and
Developing promotions and communications tools and techniques to be used to encourage transit use or the use of satellite parking for major stadium events to minimize the amount of traffic entering into the area during major events and to minimize congestion.

4.4 Stormwater Management Plan

As part of the work undertaken to develop the September 2, 2009 LPP report, an assessment of the needs related to managing stormwater was conducted and high level discussions occurred with key stakeholders including the Ontario Ministry of the Environment (MOE), the provincial agencies whose approval is required for stormwater management facilities and certain related works, Parks Canada given that part of the site currently drains into the Rideau Canal and the NCC related to needs associated with any federal environmental assessments required to deal with stormwater on federal lands.

The assessment and discussions have resulted in a high-level acceptance of the strategy to be developed in more detail for managing stormwater. This strategy is focused on retaining the drainage to the Rideau Canal, but improving the quality of water entering the Rideau Canal and introducing on-site management to control quantity in addition to quality of water. A key element of the strategy is the development of a stormwater management pond as part of the front lawn design that will also serve as an amenity feature.

The detailed stormwater management plan will be subject to the Canadian Environmental Assessment process and would follow the planning approvals, approval by Parks Canada and agreement from the Ministry of the Environment (MOE). These outside processes will be initiated when the plan has been developed to ensure approvals will be obtained from the outside agencies at the same time as municipal planning approvals are expected to be granted.

4.5 Geotechnical Engineering Site Work

Existing geotechnical site work will be reviewed and supplementary work will be completed where necessary to confirm the subsurface soil and groundwater conditions for the proposed development.

4.6 Refine Architectural Design – All Components

The LLP Implementation Plan will include the requirement for architectural site designs at a completion level typically required for an integrated Master Plan. The design drawings of the retail structures, including the office, hotel and residential components, will include elevations, sight lines, shadow impacts, suggested building materials, heritage concerns and will incorporate design linkages to the overall retail strategy. Building layout and integration to the exiting Stadium and Aberdeen Pavilion, as well as the surrounding road network, would be required at this stage of the implementation plan. In addition, the stadium renovation will be advanced as part of refining the development concepts.

4.7 Environmental Site Risk Assessment

The City's existing Old Landfill Management Strategy, finalized in October 2004, identified an old landfill site within the footprint of Lansdowne Park. This former landfill was instigated between 1913 and 1925 in order to fill an inlet from the Rideau Canal. This former landfill was investigated and assessed in 2003. Soil and groundwater samples from the landfill site, surface water samples from the Rideau Canal, and landfill gas measurements from within various on-site structures demonstrated that there were no human health risks from the former landfill associated with the current use of Lansdowne Park.

A comprehensive Phase I and Phase II Environmental Site Assessment of Lansdowne Park will be undertaken as part of the redevelopment process.

4.8 Heritage Requirements and Approval Processes

The development concept as it relates to the site’s two designated heritage buildings has been informed by various discussions with Parks Canada, Ontario Heritage Trust staff, the NCC, third party heritage experts, City heritage staff and by the results of a preliminary assessment. Additional work is required to confirm the details that will allow for year round use of the Aberdeen Pavilion, so that it becomes the centerpiece of the revitalized Lansdowne Park, and for the relocation of the Horticultural Building, so that it can be the new year round home for the Ottawa Farmer’s Market. Approvals will be required by Council for any works related to the Aberdeen Pavilion and Horticultural Building, as they are individually designated heritage buildings under the Ontario Heritage Act (OHA). In addition, there is also a requirement to consult with Parks Canada on the future use of the Aberdeen Pavilion and to obtain approvals from the Ontario Heritage Trust (OHT), related to view easements and on potential uses for the Aberdeen Pavilion and the Horticultural Building.

There is a current funding agreement related to the federal government’s contribution to the restoration work that was done to the Aberdeen Pavilion in the 1990s with Parks Canada. Due to this agreement, the City is required to consult with Parks Canada on any future use of the Aberdeen Pavilion. Although the obligation relates only to consulting with Parks Canada, confirmation will be required that no formal Parks Canada approvals are necessary. As part of the due diligence undertaken to develop the LPP as it pertains to future use of the Aberdeen Pavilion, Parks Canada has indicated a willingness to work with the City to achieve Council’s objectives for the site.

With respect to the OHT, preliminary discussions have occurred with the OHT staff regarding the process required to modify view easements from Bank Street as set out in an easement document registered on title for the Aberdeen Pavilion. The OHT also advised that their approval may be required for any works to the Horticultural Building if it is to be relocated on the part of the site covered by the heritage easements and given that this building establishes heritage context for the Aberdeen Pavilion.

Staff are working to confirm any potential limitations associated with the easements associated with the development program. This work includes, but is not limited to, the work associated with obtaining the heritage approvals from the OHT. The OHT confirmed that their staff could give approvals under certain circumstances; however, any changes that substantially affect the easement agreement will likely require approval by the OHT Board. To confirm the status of these potential obligations and approvals, further development and refinement of the development program is required.

To assist in advancing the heritage matters, a heritage expert from the IBI Group has been added to the partnership team to work with City heritage staff to advance further due diligence related to heritage matters and to help advance the required heritage approvals.

4.9 Open Space / Front Lawn and Programming

The LPP concept provides for the area along the Queen Elizabeth Driveway (QED) to be transformed into a new front lawn that is integrated with the Rideau Canal and QED open space corridor, and that will be greened and set up as an area for programming and staging various activities and events. The LPP concept plan has identified key elements to be part of the front lawn plan including a large durable and green area to be used for programming, a stormwater management pond, requirements for access to and from the site and pedestrian and cycling links to the QED pathway system. The concept plan depicts a preliminary design for illustrative purposes only and therefore, should not be considered the final design.

To develop the final design requires the following:

Further investigation of technologies for a durable large green programmable area;
Working with the NCC and other groups to confirm the types of events, activities and programming that could be accommodated within the front lawn; and
Initiating a public consultation process with the NCC for determining the design for the front lawn.

As per the Letter of Understanding between the City and the NCC, staff will work in collaboration with the NCC and Parks Canada to develop a detailed public consultation process on the proposed redevelopment of the front lawn. The consultation process would be to inform the development of a suitable design and associated programming for the front lawn including the Ottawa Farmer’s Market. Staff will report back to Council on this matter in January 2010, for consideration and approval prior to implementation.

5. Special Agreements

5.1 NCC, Parks Canada and Off-site Interests

Implementation of the LPP requires a number of other special third party agreements. The third party agreements that will be required, as determined to date, include the following:

· Agreements with the NCC related to the front lawn design;

· Agreements with Parks Canada related to stormwater management and potentially introducing boat docking facilities at the access points to Lansdowne Park from the QED along the Rideau Canal;

· Agreements to secure off-site parking (Confederation Heights and Carleton University);

· Agreements to secure sites for the storage and staging of tour buses and large vehicles supporting major events at Lansdowne;

· Agreements with private transit operators to provide shuttle services from satellite parking facilities; and

· Possible agreement with Paul’s Boat line to allow use of the Rideau Canal as a transportation options for major stadium events.

6. Special Tasks

6. 1 CCEA Relocation Plan

City staff will assist the CCEA in the completion of a business and logistical plan to move to their property on Albion and Rideau Roads. Regardless of the LPP, the CCEA has been considering the move for some time but has identified a lack of funds to support a relocation project. In consultation with the CCEA, it was ascertained that the delay is due in part to the cost to extend municipal servicing (water and sewer) to the 100-acre site. In response, staff commissioned a civil engineering review to identify the servicing constraints and potential remedy options. This information was shared in meetings with the CCEA. Staff has also identified important background information comprised of detailed engineering reports and studies beneficial to the CCEA development. Furthermore, Council Motion 71/32 from September 2, 2009, directs staff to complete a traffic study to assist in the development process of the CCEA lands. This study is moving ahead regardless of the LLP. The production of the final concept plan for the Albion Road remains the responsibility of the CCEA.

The site concept plan for the CCEA property must be developed concurrently with a supporting business plan. Internal staff support has been offered to the CCEA to assist in scoping out elements within the business plan. Staff are moving forward to transfer the adjacent City owned property of 59 acres to the CCEA primarily to be used for parking given the environmental challenges related to the site. The production of a business plan, with a supporting short and long-term financial plan, together with a relocation strategy will remain the responsibility of the CCEA.

As part of the Implementation Plan, a Termination Notice to the CCEA for the Lansdowne Park location must be rendered before May 1, 2010 for vacant possession of the site for January 2011. The CCEA was made aware of this possibility during the discussion with City staff in July of this year.

6.2 Trade and Consumer Show Plan

Given that Council’s motion of April 22, 2009, called for the enhancement of the facilities available to support this use, staff investigated the potential to provide addtional, better quality, and contiguous Trade and Consumer Show space at Lansdowne Park than currently provided by the total 113,400 sq. ft. space in the existing three separate facilities being: the Aberdeen Pavilion (38,600 sq. ft.), the Coliseum (27,600 sq. ft.) and the Civic Centre (47,200 sq. ft. - 30,200 sq. ft. in the Salons and 17,000 sq. ft. in the arena).

It became apparent early in the assessment process that the provision of an appropriate facility to meet the minimum requirements of the Trade and Consumer Show industry and its associated special parking requirements, would create significant conflicts to achieving the other goals set out by Council for Lansdowne, including the greening of the front lawn. The LPP therefore proposes the discontinuation of Trade and Consumer shows at Lansdowne Park on the basis that enhanced Trade and Consumer Show space, to meet that industry’s requirements, is best provided at another location.

Staff initiated a review of alternative sites in the City that would be candidates for a new facility that could support the future needs of the Trade and Consumer Show industry in Ottawa. It was recognized that purpose built trade and consumer show facilities in most cities are usually located outside the central areas of those cities and in many cases are located at, or adjacent to, the local major airport. From that effort, the potential for a new facility was discussed with the Ottawa Airport Authority (Airport Authority).

Over the last two months the Shenkman Corporation (Shenkman) and the Airport Authority have negotiated and entered into an agreement whereby Shenkman has a one-year period to enter into a lease agreement with the Airport Authority to construct and operate a new facility. During the same time period, Shenkman has had consultants meeting with representatives of the local Trade and Consumer Show industry to gain an understanding of their needs. Shenkman has been working on the development of a business case that would allow Shenkman to decide to move forward and enter into an agreement with the Airport Authority. Unfortunately, at this time, Shenkman has not completed their work. They have determined, however, that a level of municipal funding will be necessary to make the business case viable. This leaves Council in the position of not having certainty regarding the existence of a proposal for a new facility and to what extent there would be a requirement for City funding.

Given that the Shenkman proposal will identify the requirement for municipal funding, staff recommends the following approach:

Shenkman Corporation should be given until February 15, 2010, to complete their business case and negotiations with the Airport Authority, as well as finalize and make a proposal to the City to construct and operate a new facility. While waiting for the submission of the proposal, the City will develop a Request for Expression of Interest (RFEOI) process that would be initiated by the City following receipt of the Shenkman proposal. The goal of the RFEOI would be to identify whether any other proponent would be interested in submitting an alternative qualified proposal to the City for the construction and operation of a new facility.

If no expression of interest is received, Council can consider whether or not the Shenkman proposal forms an acceptable basis on which to move forward with the LPP in May 2010. If qualified expressions of interest are received, then the City could move forward with a formal Request for Proposal (RFP) process that would take an additional eight to twelve months to complete. At the end of the RFP process, Council will know whether or not there is a proposal that it considers superior to the Shenkman proposal. The Shenkman proposal would be required to be irrevocable to allow the City to complete the RFP process if necessary.

With this strategy, Council can be assured of the existence of a known plan for a new Trade and Consumer Show facility prior to making a final decision on the LPP in May 2010, while at the same time providing a competitive element to the process should interest in the marketplace exist.

In the event that the process described above results in a proposal and business plan for the provision of a new facility to accommodate Trade and Consumer Shows over the long-term that is acceptable to Council, it is anticipated that this new facility could be constructed by the end of 2011 and opened in 2012 for Trade and Consumer Show use.

While the LPP may result in the loss of the Coliseum building before the new Trade and Consumer Show facility is available for use, 42 of the 48 shows currently using the existing facilities can continue to be accommodated by the Aberdeen Pavilion and the Civic Centre facilities until 2012. By providing a temporary structure with approximately 28,000 sq. ft. of floor space, the remaining six shows can also be accommodated in the short-term until the new Trade and Consumer Show facility is opened.

Finally, staff would conduct the traffic study as directed by Council to determine the impacts of having the Trade and Consumer Show facility located at the Airport given the current traffic conditions along Hunt Club Road. The traffic study would be completed prior to February 15, 2010, so that Council would have the benefit of that information prior to receiving the Shenkman proposal.

6.3 Ongoing Refinement of the Implementation Schedule

Stage One of the Implementation Schedule identifies the core activities required to move the LLP forward from a concept plan to a more definitive project. This process requires investment in professional fees as shown in Document 3 to this report. As the various parts of the process come together, and the project begins to take shape, the timeline for the complete project delivery will become more defined. With this clarity the schedule for Stages Two and Three can be refined. Hence, an important task of the ongoing implementation schedule is to regularly update the project tasks and deliverables based on preceding works.

7. Reports to Council

Following completion of the work recommended in Stage One of the Implementation Plan, staff would table a report to Council at its first meeting in May 2010, for discussion at its second meeting in May 2010.

Once the detailed public consultation process has been developed in partnership with the NCC and Parks Canada on the proposed redevelopment of the front lawn, staff will report back to Council in January 2010 for Council consideration of the proposed process prior to its implementation.

In the event that it becomes apparent during the negotiation process with OSEG, or in completing the work outlined in Stage One of this report, that any one of the outcomes indentified in Recommendation 2 (a) cannot be met, staff would report to Council as soon as possible to ensure Council is able to provide further direction or terminate the Implementation Plan process. Specifically, staff would report back to Council if one of the following were to occur:

It becomes apparent during the third party review of the assumptions and associated financial projections of the LPP that there is a significant variation in the cost estimates;
The transportation studies, or the associated TDM plan, identify that traffic and on-street parking impacts resulting from the implementation of the LPP would not be able to be reasonably accommodated;
The off-site satellite parking agreements required to support the TDM plan could not be secured;
The peer review of the retail market demand and impact analysis does not confirm that the proposed retail component of the LPP is viable, and/or the definition regarding the proposed retail strategy provided by OSEG is not compatible or consistent with the direction to have destination specific retail that would be complimentary and supportive of the existing retail business community along Bank Street in the Glebe and Old Ottawa South;
It is confirmed that there are required Heritage obligations and approvals that cannot be obtained, which in turn impedes to the ability to successfully implement a viable development program; or
A negotiated Project Agreement Framework between the City and OSEG cannot be successfully achieved.

STAGE TWO – Planning Approvals and Partnership Agreement – May 2010 to March 2011

Final Council approval of the LPP, including the partnership agreement and the potential establishment of the MSC, would initiate moving forward with the transformation of Lansdowne. With Council approval, the next stage includes initiating the required planning approvals, securing the necessary financing, finalizing other stakeholder agreements and beginning the physical transformation of the site.

8. Planning Approvals

8.1 Rezoning Process, Site Plan, City Heritage and Agency Approvals

There is a requirement for Council and/or staff (under delegated authority) to authorize specific planning approvals. These include re-zoning to allow for uses that are not currently permitted for Lansdowne, site plan approval, which would set out specific conditions for development, and heritage approvals related to modifications that may be considered for the heritage sites of the Aberdeen Pavilion and the Horticulture Building. The processes to initiate these approvals would commence following Council consideration of the report to Council in May 2010. These approvals will require further public input as required by legislation or by Council policy. The Planning and Growth Management department has defined, at a high level, the planning approvals required, confirmed the materials that will be required to initiate the planning approvals processes, and defined the timelines for these approvals.

In addition to City planning approvals, there is a need to obtain approvals from the Ontario Heritage Trust for work related to the Aberdeen Pavilion and modifications to the existing Heritage easement (related to the view corridor from Bank Street), Parks Canada on proposed uses for the Aberdeen Pavilion and on stormwater outlets and docking facilities on the Rideau Canal. In addition, a federal environmental assessment process will be required for the stormwater management plan. Further, consultation will be held with the NCC during the design process and with ACPDR, the National Design Advisory Committee of the NCC, for the final design.

Staff will begin the work to confirm the specifics of all required approvals following Council receipt of this submission. For approvals that involve outside agencies, the process to initiate these would commence once the additional required due diligence work is completed to ensure that these approvals can be obtained when final municipal planning approvals would be sought. All approvals from outside agencies would be subject to Council’s final approval of the LPP in May 2010, and subject to final municipal planning approvals that would be sought in September 2010.

9. Complete Project Agreements

9.1 Partnership Agreement

The Partnership Agreement will be the basic agreement between the City (or the City’s MSC) and the OSEG. It will be the “umbrella agreement” establishing the basic arrangement, the conditions to be satisfied in order to proceed and other essential elements of the arrangement. It will also contain, as schedules, the other agreements to be entered into between the parties. The Partnership Agreement will also contain the obligations of OSEG relating to the project as a whole.

The Partnership Agreement will also provide for the legal structure to be created between the City and OSEG to ensure that the agreed upon framework of decision-making and the financial arrangements agreed upon between the parties for the Project as a whole are implemented (the “Legal Structure”).

9.2 Security Holders Agreement

This Agreement implements the Legal Structure contemplated in the Project Agreement. The Agreement will describe the legal interests held by each of the City and OSEG in the various components of the Project (such as limited partnership interests). The Agreement will also describe the priority of distributions to be made between OSEG and the City. It will also deal with the manner in which decisions are made between the parties. The Security Holders Agreement will also implement the obligations of OSEG to contribute the required equity for the total Project.

9.3 Site Management Agreement

The City will establish the policies and basic principles for the programming and operation of the front lawn. OSEG will enter into a management agreement pursuant to which it manages the front lawn on behalf of the City. The Site Management Agreement will also describe OSEG’s responsibility for managing the site as a whole and the standards to be maintained.

9.4 Stadium Lease

When the stadium is completed, the City will lease the stadium to OSEG for a term of 30 years. The stadium lease will contain provisions related to the operation of the stadium by OSEG.

The Lease will be a net-net lease with no base rent payable. However, all net revenue from the stadium lease will form part of the closed financial system and distributed as per the conditions specified in the final Project Agreement. In addition, OSEG will be responsible for capital and lifecycle repairs and replacements during the term of the stadium lease. The stadium lease (as with other leases granted to OSEG) will contain default provisions entitling the City to terminate the Lease if defaults are not cured within an agreed-upon period of time.

9.5 Retail Lease

The City will grant a retail lease to OSEG. The term of the lease will be 50 years with a right of OSEG to renew for two consecutive terms of 10 years each. During the first 30 years of the term, there will be no base rent payable under the lease. However, the net cash flow from the lease will be part of the closed financial system to be allocated between the parties. Following the period of 30 years, the rent will be adjusted to a market rent.

9.6 Construction Management Agreement

This agreement will deal with the role and obligations of OSEG in assisting the City in the improvements to be made to the stadium, the Civic Centre and the parking garage. It will deal with the maximum cost agreed to by the City for construction of the stadium, the resolution of plans and specifications for the stadium the carriage of which shall be that of OSEG, subject to the approval by the City and the basic provisions regarding the general contract to be entered into with a general contractor. OSEG will also provide day‑to‑day supervision for the construction of the stadium improvements on behalf of the City.

9.7 Parking Operation Agreement

The City and OSEG will enter into a Parking Agreement. This agreement will deal with the parties’ respective financial contributions to the parking components on the site and OSEG managing the parking spaces pursuant to a parking management agreement. The agreement will also contemplate a net lease being provided by the City for the parking component.

9.8 Option for Commercial Hotel and Office

The City will grant a head lease to OSEG with respect to the office and hotel components should Council include these options. OSEG will, in turn, enter into leases, as head tenant, with an office and hotel developer on market terms. The net cash flow from the leases entered into by OSEG will flow back to the Head Leases and ultimately form part of the closed financial system of funds received from the total project and be distributed in accordance with the priorities agreed to by the parties.

9.9 Complete NCC, Parks Canada and Third Party Off-site Agreements

The City must obtain a series of agreements external to the LLP for the redevelopment of Lansdowne Park as proposed. The terms of the agreements will be framed in Stage One and executed in Stage Two. The City will enter into an agreement with the NCC to formalize any use of the Queen Elizabeth Driveway and any other concerns. An agreement with Parks Canada will deal with heritage issues and the Rideau Canal. Parking will need to be addressed during major events. Off-site lease agreements will be sought with Carleton University, Confederation Heights and with other private property owners for short-term parking and oversized vehicle storage.

10. Complete Financial Terms

The OSEG will be responsible for financing the commercial development excluding the stadium and front lawn. The City will review the lending terms and conditions given the land lease arrangement within the LLP. Though the City has a fee simple interest, as the owner of the land, the LLP does not require the City to guarantee any loan agreement. Lenders will seek covenants to protect themselves by securing the lease fee interest in the property and thus the City must understand the implications. Furthermore, mortgage interest is an expense item and given the waterfall distribution of profits, the City has included this in the LLP limitations and restrictions on refinancing.

11. Detailed Design

The master site plan and the drawings submitted for site plan approval are focused on overall site development and the organization of buildings to define the public realm, their relationship to the public realm related to building accesses and architectural expression and to address on site circulation needs for vehicles, including loading vehicles and pedestrian circulation and open space design. While the required planning approvals are being processed, more detailed design drawings that would be required for tendering site works and for obtaining building permits subsequent to planning approvals being obtained will be undertaken.

These more detailed plans would be consistent with the site plan drawings and provide for detailing specifics and specifications for the works to be undertaken and for detailing those elements of the building designs that are not controlled through the site plan approval process. This would include construction details to achieve LEED certification, interior spaces and interior design details, materials, etcetera.

STAGE 3 – Final Design and Construction – March 2011 to May 2014

Stage Three is closely linked with the approval process and the results from the Ontario Municipal Board (OMB), if a hearing is required. An OMB hearing date cannot be determined at this point in time; however, the schedule allows for this process with a forecast OMB decision before April 2011. Only the Preconstruction Activities would begin prior to the OMB decision. Construction activities would not commence until after final approvals for the rezoning and site plan are issued.

12. Preconstruction Activities

Stage Three commences in the last quarter of 2010 with a series of preconstruction tasks tied to the development process. At this point, the City would proceed with arranging its own financing for the stadium work. Demolition and building permits would also be completed, including insurance underwriting and bonding. The City programming at Lansdowne Park would ramp down and the Workplace Transition Agreement would commence.

Should Council choose to proceed with the residential development, marketing of this component would also commence. With the completion of the final construction approvals, the final tendering process would begin in the first quarter of 2011. It is anticipated that all component parts of the LPP would be tendered in a short period. The intent is to achieve best value for money with economies of scale. It is at this point in time that a final cost for the entire project would be known.

13. Construction Activities

The physical work on the site would commence at the end of March 2011. The first stage would be to complete infrastructure upgrades to the water and sewer, and possibly hydro electricity, supply. As part of the site preparation, the Horticulture Building would be relocated. Construction of underground parking for the retail component and residential components, and work on the exterior of the north-side stands would commence at the same time.

Construction of the retail and residential structures would immediately follow the parking elements in the second quarter of 2011. Work on the Civic Centre is scheduled in two phases to avoid disruption to the Ontario Hockey League (OHL) schedule. Interior work impacting the arena is scheduled from May to September 2011, with all other works to be completed by April 2012.

The south-side stands are to be demolished and replaced. Work on this component is significant and would begin in May 2011, with completion in April 2013. Construction of component parts of the front lawn would begin in May 2011; however, the entire construction cannot be completed until the following year due to conflict with other construction activities.

The LPP has an option for the development of office space and a hotel. These components are stand-alone and are not contingent on any other construction. The project start date is May 2013, after completion of all other construction tasks, with completion forecast a year later.

14. Post Construction Activities

In the LPP, each party will monitor the construction works for which it is responsible. It is anticipated that there will be one Constructor and multiple sub-trades. The Construction Management Agreement will spell out the monitoring terms and how to resolve design, material, and timing issues. Once construction is complete, the City, potentially through the MSC, will monitor the operations of the LPP partners and ensure that the partnership agreements are followed.

CONCLUSION

It is recommended that Council consider approving the LPP conditional on completing additional work that needs to be undertaken to further develop the LPP to achieve defined outcomes as outlined in this report. This work was identified through the initial development of the LPP and in response to Council’s directions resulting from the September 2, 2009, Council meeting and the October 6and 8, 2009, Standing Committee meetings. The public consultations process on the LPP also reinforced the need for further development of the LPP.

The Implementation Plan set out in this report provides Council with an overview of this additional work and recommends a structured schedule, implementation process, and budget for its completion.

The cost to complete Stage One is estimated at $2,335,000 as outlined in Document 3 to this report, with the City’s share being $1,132,500 and OSEG’s share $1,202,500. The cost to the City for Stage One can be funded from existing Lansdowne Park capital retrofit projects without creating a budget pressure in 2009 or 2010. The cost estimates associated with the work in Stage Two for both the City and OSEG will be presented to Council as part of the report to Council in May 2010.

Council has requested that an independent financial evaluation of the LPP be completed. Proceeding with Recommendation 2 (a) (i) would provide the additional due diligence on the financial assumptions and forecasts that Council requires prior to considering whether it wishes to proceed with the LPP and enter into a formal Partnership Agreement with the OSEG.

Completing the public consultation process for the design of the front lawn would provide Council with valuable information and a proposed design plan developed in consultation with the public, the NCC and Parks Canada which could be implemented whether the LPP proceeds as proposed or not.

The specific conditions and associated costs upon which the LPP could be terminated due to conditions precedent not being met or for convenience would be specified and available for Council’s consideration.

Council is not bound to any legal obligations to proceed with the implementation of the LPP while the work identified in Stage One is being completed. Additionally, should Council choose to enter into a legal agreement in the Spring of 2010, it could do so with the understanding of the conditions under which the LPP could be terminated and retain the ability for both this, or a subsequent, Council to terminate the LPP prior to commencing construction in March 2011.

CONSULTATION

As directed by Council a comprehensive public consultation process on the LPP was undertaken. The public consultation process included public meetings, an on-line consultation platform and a public opinion research survey.

Public Meetings

Beginning with a public meeting at Lansdowne Park on September 28, 2009, six (6) public consultation sessions, which ran from 6:00 – 9:00 p.m., were held. The following summarizes the dates and locations of these meetings:

Date	Venue	Location
September 28	Lansdowne Park, Salon A	1015 Bank Street
September 29	Ron Maslin Playhouse, Lobby	1 Ron Maslin Way, Kanata
September 30	City Hall, Jean Pigott Place	110 Laurier Avenue West
October 1	Jim Durrell Complex	1265 Walkley Road
October 5	Tom Brown Arena	141 Bayview Road
October 6	Shenkman Arts Centre	245 Centrum Boulevard

At these public meetings, residents were presented with information and exhibits that described the key elements of the LPP. City staff and other subject matter experts were available to receive input from residents and answer questions.

Residents were encouraged to voice their opinions, comments and questions, all of which were recorded and incorporated into the final report on the consultations.

In reponse to requests from Councillors following the first two meetings, the City Manager modified the Open Houses to include an opportunity for questions and answers in a Town Hall format which ran from 7:30 p.m. to 9:00 p.m. for the remaining four sessions.

On-line Consultations

The public was also encouraged to participate in e-consultation, which was open from September 28 through October 11, 2009, hosted by Nanos Research. On behalf of the City, Nanos Research deployed the popular Ottawa Talks e-consultation platform to engage residents in facilitated on-line discussions about LPP themes and topics. The public was able to share information and opinions, and to pose questions on a 24/7 basis.

E-consultation information and discussions were linked to LPP documents on ottawa.ca (link from main page). Also, the public was able to share opinions, information and questions through 311@ottawa.ca or by calling 3-1-1 (TTY: 613-580-2401).

Public Opinion Research Survey

Nanos Research gathered results and insights from the online consultation and focus groups in order to develop and deploy a survey of 1,000 Ottawa residents. The survey sample size ensures the survey findings are accurate within ± 3.1%, 19 times out of 20.

The public opinion survey commenced following the Open Houses. The public opinion survey was designed by Nanos Research to enhance the ability to further gauge residents’ understanding, awareness and opinions on a range of issues related to the LPP.

Specifically, the results of the survey were used to:

o Validate the findings of the consultation process to ensure a balanced understanding of the views of residents;

o Identify and gauge perceptions on the overall direction of both the LPP and the public consultations; and,

o Provide better information to support Council’s consideration of the LPP.

The results of the LPP public consultation process are detailed in the Lansdowne Partnership Plan Public Consultations Findings Report from Nanos Research to be tabled at the Committee of the Whole for Council consideration on November 12, 2009.

Additionally, the City Manager’s Office met on one or more occasions with the following groups and stakeholders:

The Central Canada Exhibition Association (CCEA);
The Ottawa Association of Exposition Managers (OAEM);
Coliseum Incorporated;
The Glebe Community Association;
The Ottawa South Community Association;
The Old Ottawa East Community Association;
The Centretown Citizens Community Association;
The Glebe Business Improvement Area (BIA);
The Ottawa Farmer’s Market (OFM); and
The Algonquins of Pikwàkanagàn.

The City Manager and, in most cases, OSEG representatives met with these stakeholder groups to ensure that each group was provided with an opportunity to obtain any information they wanted to assist them in preparing their feedback and input for Council consideration and to raise any issues and concerns they wished to have considered regarding the proposed LPP.

To advance a resolution to the divergent results of the two retail studies, the City Manger held a meeting on October 27, 2009, with representatives from OSEG, Tate Research Inc., the Glebe BIA and Market Research Corporation. As identified in the Section 4.2 of this report, the purpose of the meeting was to enable James Tate of Tate Research Inc. and Barry Nabatian of Market Research Corporation, to review their research methodology and results.

Following the public meetings, the public was also provided an opportunity to speak to standing committees on the Business Case and Transportation Strategy. Each stakeholder group was advised of the opportunities to attend the October 6, 2009 CSEDC meeting, the October 8, 2009 Joint Transportation Committee and Transit Committee meeting, and the Committee of the Whole meeting of Council on November 12, 2009.

LEGAL / RISK MANAGEMENT IMPLICATIONS

The City’s external law firm of Borden Ladner Gervais LLP has considered whether the City has the authority to pursue the redevelopment of Lansdowne Park through a partnership with OSEG in the absence of a competitive bid solicitation process. They have answered this question in the affirmative and their legal opinion in this regard is summarized below.

The Sole-Sourcing Issue

In reviewing the components of the redevelopment of Lansdowne Park, it appears that some aspects of the proposed redevelopment, in particular those aspects which relate to real estate may not fall within the framework of the City’s purchasing obligations. In fact, the disposal by the City of interests in real property, such as the long-term leases contemplated in the redevelopment plan, may be covered by the City’s Real Property Disposition By-law No. 20052-38. Nevertheless, a number of aspects of the proposed redevelopment clearly relate to the provision of services and/or construction by OSEG that would fall within the ambit of the Purchasing By-law (i.e. management and oversight of the Stadium revitalization process, construction activities, etc.). Given that, it is suggested that the entire redevelopment plan is likely to be found to fall within the ambit of the City’s Purchasing By-law.

The City of Ottawa Purchasing By-law outlines a number of circumstances in which the City can enter into a contract without first conducting a competitive solicitation. A direct contract or “sole-source” approach to municipal procurement is an important and legitimate option that can be exercised by the City when circumstances warrant a departure from a competitive approach.

Subsection 22(1) of the Purchasing By-law authorizes the City to waive the competitive bid solicitation process in a variety of circumstances. These include situations where only one source of supply would be acceptable and cost effective or, where due to technical or other reasons only one supplier can undertake the contract. In addition, Section 22 also gives authority to the City to award a sole-source contract for reasons other than those that are specifically mentioned in Subsection 22(1). Although the scope of sole-source exceptions are likely to be narrowly construed, it is suggested that it is appropriate to invoke the authority provided in Section 22 in view of the unique circumstances of the redevelopment plan for Lansdowne Park.

In this case, OSEG is uniquely qualified to participate in the comprehensive plan to redevelop Lansdowne Park in that this proponent alone has the ability to supply the CFL and OHL franchises which are essential to the successful revitalization of the Frank Clair Stadium and Civic Centre and which will form the core of the Lansdowne Park redevelopment. In addition, the City could conclude that the comprehensive nature of the redevelopment plan and the associated cost sharing are the only means of pursuing the redevelopment of Lansdowne Park in a cost effective matter.

Furthermore, the Lansdowne Park redevelopment plan is multi-faceted. In effect, it links a number of development and redevelopment components together in a public/private partnership that can only be undertaken by the members of OSEG. It is truly a unique redevelopment plan that works as an interconnected comprehensive concept.

In addition, Council has the authority to pass a new by-law or waive the application of the Purchasing By-law (or parts of it) dealing with the proposed redevelopment of Lansdowne Park. Such a step would further insulate the City from a successful challenge.

Finally, it is suggested that the courts will grant considerable deference to public authorities, such as the City of Ottawa, when making such procurement decisions. This is particularly the case where the City is able to demonstrate that it acted in good faith, that it exercised appropriate due diligence and that it consulted with those who are likely to be affected by the decision.

The Bonusing Issue

Borden Ladner Gervais LLP was also asked to consider whether the proposed partnership with OSEG for the redevelopment of Lansdowne Park would be contrary to Section 106 of the Municipal Act, 2001. Briefly, that clause prevents a municipality from granting “bonuses” to commercial or industrial undertakings within that municipality. Based on the current components of the proposed partnership, the manner in which they are to be implemented by OSEG and the City and the financial model to capture and allocate the net cash flow from each of the components, their opinion is that the proposed partnership with OSEG does not result in the City granting a bonus to OSEG. Their legal opinion in that regard is summarized below.

A prohibition against municipalities providing “bonuses” to commercial or industrial undertakings within that municipality has existed as a concept of municipal law for many years and is currently set out in Section 106 of the Municipal Act, 2001. The granting of a bonus is sometimes broadly defined as the conferring of an obvious advantage or benefit by the council of a municipality upon a person absent statutory authority (e.g. a rezoning pursuant to a duly authorized zoning by-law). However, there is no principle to prevent a municipality from making bargains and exercising its powers to carry out such bargains even if it may be that the municipality is not benefiting to as a great an extent as the other party with whom the bargain was made.

In view of Section 106 of the Municipal Act, 2001 and the principles established by Canadian case law, when the entire arrangement currently contemplated by the Memorandum Of Understanding (MOU) for the Lansdowne Partnership Plan is taken into account, including its complex matrix of covenants, benefits and services provided by each of the City and OSEG to create the Project, the arrangements contemplated do not result in the City granting a bonus to OSEG.

Among the factors leading to this conclusion are the exclusive right of OSEG to a football franchise for the City of Ottawa, the required equity contributions by OSEG and other services to be provided which create the ability of the City to provide benefits to the public contemplated by the project which, without the contributions of OSEG do not appear feasible. In addition, the requirement that there be a “closed system” for the collection of net cash flow from each of the components (other than the residential proceeds all of which go to the benefit of the City) and the “waterfall” of priorities of distribution indicates a highly negotiated exchange of benefits between the parties without conferring any obvious advantage on OSEG. Finally, a required safeguard for the City is that, in the event of a partial disposition of the retail lease to an independent third party that may become part of the developer group that creates the retail component under the Lansdowne Park Plan, the third party is responsible to pay to the City fair market value rent for its proportionate leasehold interest.

Other Potential Liability

(a) Costs

Should Council decide not to proceed further with the Lansdowne Park Plan, it will not be liable to OSEG for any costs incurred by it in developing the Plan and having it go out to public consultation.

Prior to Council considering the Report on the “Assessment of Stadium Proposals - OSEG (Lansdowne Live) and Senators Sports & Entertainment (SS&E), Kanata” on April 22, 2009, both OSEG and SS&E signed and provided to the City an Acknowledgement, Estoppel and Opportunity Assessment Agreement. The purpose of the agreement was to have each proponent acknowledge that the City had no approved funding source for a new or revitalized sports stadium. Moreover, each proponent acknowledged that, as a condition precedent to the City evaluating the proposals, it would be responsible for its own costs. The City would pay no honorarium to any proponent nor would the City be obligated to pursue to completion or implementation either proposal.

(b) Litigation

On September 16, 2009 a court application was commenced seeking a judicial review of Council’s September 2nd decision to receive the Lansdowne Park Plan and to have it circulated for public consultation. The application also sought an injunction to stop the public consultation meetings, to cancel the sole-source negotiations between the City and OSEG and to compel the City to immediately commence a public Request for Proposals. The City filed a notice of appearance on September 22, 2009 to the application indicating that it would defend Council’s decision in the matter.

On September 30, 2009 the Court provided an interim ruling rejecting the Claimant’s request for an emergency motion for an injunction to stop the public consultations. The Court stated that the motion was not urgent and that, in any event, courts generally do not discourage public consultations and discourse. The Court advised the Claimant that he should wait until Council makes a decision on the matter before taking any action.

Subsequently, a case conference on the matter was held on November 2, 2009. The Claimant was advised by the Court at that time that any injunctive motion or application brought to a hearing before the City has made a final decision is not likely to be well received by the Court and may well result in costs ordered against the Claimant. Based on that further interim ruling, it appears at this time that the Claimant will not seek to pursue his legal challenge until Council has made a final decision on the Lansdowne Park Plan. Further comments about this ongoing legal proceeding and its merits can be provided to Council in camera should it wish to receive a more detailed briefing on the matter.

FINANCIAL IMPLICATIONS

The additional $1.132 million that has been identified as the City's share of the Stage One portion of the work outlined in this report to develop the LPP Implementation Plan, can be funded from capital projects 904321,904686 and 904963 which are the Lansdowne Park retrofit projects for 2007, 2008 and 2009.

SUPPORTING DOCUMENTATION

Document 1 – Council Directions and Staff Responses

Document 2 – Lansdowne Partnership Plan Implementation Schedule

Document 3 – LPP Implementation Cost and Resources Estimates

Document 4 – Summary of Official Plan Directions

Document 5 – Phase 1 Business Plan Presentation to CSEDC on October 6, 2009

Document 6 – LPP Transportation and Transit Strategy Presentation to the Joint Transportation Committee and Transit Committee on October 8, 2009

Document 7.1 & Document 7.2 – Albion Road Traffic Impact Study Up-date and Terms of Reference: Hunt Club Traffic Study (Ottawa International Airport Tradeshow Site) – Please note: Document 7 is available through the City Clerk’s Office.

DISPOSITION

Subject to Committee and Council approval, staff will implement the recommendations as outlined in the report.

Council Directions and Staff Responses Document 1

September 2, 2009 Lansdowne Partnership Plan – Report recommendations as amended:

Amendments to the September 2, 2009, LPP report recommendations made by Council motions have been underscored.

That Council:

Receive and table the Lansdowne Partnership Plan for subsequent consideration by Committee of the Whole (including delegations) and City Council on November 12, 2009;

Approve the first phase public consultation plan as outlined in this report, and provide a supplementary report on the results of public consultations to the Committee of the Whole meeting;

Direct staff to prepare a second supplementary report detailing the next steps that would be required for the implementation of a Lansdowne Partnership Plan, including the requirements for the establishment of a Municipal Service Corporation, and an understanding of the resourcing requirements for the consideration of the Joint Corporate Services and Economic Development and Planning and Environment Committee meeting on Committee of the Whole meeting and City Council on November 12, 2009;

Authorize the City Manager to expend the funds necessary to conduct the public consultations and develop the implementation report, to an upset limit of $200,000 to be funded from Lansdowne Park Minor Capital Program 2009.

September 2, 2009 City Council

1. Motion 71/17 - Councillors Doucet and Leadman

Whereas the Glebe BIA has been promised the Delcan traffic study that was completed on the original Lansdowne Live Proposal many times and never received it that staff be directed to provide this study to the Glebe BIA as soon as possible.

Response: The Delcan Lansdowne Live! Transportation Impact Overview study was provided to the Glebe BIA on September 30, 2009 subsequent to obtaining authorization for its release by the Shenkman Corporation, which authorized the study. The report was a preliminary draft of the Lansdowne Development Transportation Strategy which was also commissioned by the Shenkman Corporation on behalf of OSEG and included in the September 2, 2009 LPP report.

2. Motion 71/18 - Councillors Brooks and Doucet

Whereas Council has not yet seen the conditional offer from the CFL to the OSEG that staff be directed to make available to Council the conditional offer supporting the claim that a stadium must be built at Lansdowne Park, or that the OSEG must run the football team, and that this information be made available prior to the Committee of the Whole and Council meeting.

Response: The original documentation dated March 18, 2008, pertaining to the agreement between OSEG and the Canadian Football League (CFL) was circulated to Council in hard copy on September 2, 2009. Additionally, on October 28, 2009, the City Manager circulated to all members of Council, two supplemental letters from the CFL (dated June 11, 2009 and September 17, 2009, in addition to re-circulating the March 18, 2008, letter of intent from the CFL to Mr. John Ruddy).

3. Motion 71/21 - Councillors Brooks and Doucet

Whereas there is considerable public concern regarding the costs associated with all aspects of this proposal; and whereas there is a need for clear, easy to understand yet fully detailed financial information; that staff prepare a list of the expenditures and incomes, listed separately, to be made available to the public as part of the public consultation process.

Response: The details of the Lansdowne Park Business Plan for Transformation, which include the estimated expenditures and incomes developed by PriceWaterhouseCoopers, were available to the public on-line at ottawa.ca, as well as in CD and hard copy formats. The estimates were also summarized on the Business Plan storyboards, which formed part of the material that was available all public consultation sessions.

4. Motion 71/22 - Councillors Doucet and Jellett

That visual representations of Lansdowne Live’s proposal not include City of Ottawa baseball diamonds adjacent to Lansdowne Park, which are not part of the Lansdowne Live proposal and are separate legal entities.

Response: The depictions of the LPP proposal were modified immediately following Council on September 2, 2009, to exclude the City of Ottawa baseball diamonds adjacent to Lansdowne Park. The visual representations of the site proposal provided at all of the public consultation sessions were of the revised site plan.

5. Motion 71/23 - Councillors Leadman and Doucet

That, of the four Town Hall meetings proposed, two additional Town Halls be added as follows: One for Capital Ward where Lansdowne is located and one in Kitchissippi Ward.

Response: As directed by Council, six public consultation sessions were held, including one in the Capital Ward, held at Lansdowne Park on September 28, 2009, and one in the Kitchissippi Ward, held at Tom Brown Area on October 5, 2008.

6. Motion 71/25 - Councillors Brooks and Doucet

Whereas there will be costs to the city for the construction of the stadium and amenities staff be directed to include what those initial costs might be and how this would be balanced by the revenue streams.

Response: The initial costs to the City for refurbishment of the stadium and to create parking would be $129.3M. The cost to create the Front Lawn amenities proposed under the LPP is estimated at $5.0M. The City’s fifty per cent share of this cost is included in the $129.3M.

The $129.3M capital requirement would be reduced by reserves from the Parking Fund and by operational savings over the construction phase. It is anticipated that the City will have to finance $116.9M. The estimated annual debt repayment cost is $7.1M over a 40-year term.

The City has identified three funding sources to fund the $7.1M annual debt repayment.

The first funding source is $3.8M, which is available in the current long-range annual budget for the operational loss, minor capital, and lifecycle requirements for Lansdowne in its current condition.

The second funding source is 75 per cent of the City portion of the estimated property taxes levied against the retail component of the LPP. The first year taxes are estimated at $2.9M.

The third funding source is required for the balance of the difference between the two above-mentioned funding sources ($3.8M + $2.9M) and the debt service ($7.1M), which is $400,000 in the first year. This amount will be paid from a City reserve fund.

The annual debt payment of $7.1M will remain constant over the 40-year term. The first year funding gap will diminish annually as taxes increase over time. It is anticipated that by year 2019, 75 per cent of the property taxes of the retail development plus the $3.8M annual budget will be sufficient to cover the $7.1M annual debt repayment. From this point in time, the surplus tax revenue will be used to repay the reserve fund. It is anticipated that the timeframe to repay the City reserve fund will be five years.

7. Motion 71/26 – Councillors Doucet and Hume

Whereas two previous CFL franchises have not survived at Lansdowne Park staff be directed to include specific information detailing who will assume the cost of servicing the capital debt and the servicing costs of the stadium if the CFL Franchise fails.

Response: The cost of servicing the capital debt issued for the redevelopment of the stadium and the Civic Centre always remains with the City as currently provided for under the proposed partnership with OSEG. Under the proposed partnership, OSEG is responsible for making mandatory contributions to a lifecycle reserve fund for the redeveloped stadium and to assume the operations risk on revenues and expenses once the redeveloped site opens. This legal obligation would survive and continue in full force and effect regardless of whether the CFL franchise or the OHL franchise fails at any time during the term of the partnership. If OSEG defaulted on this obligation it would constitute a default under the main Project Agreement between the City and the OSEG.

8. Motion 71/27 - Councillors Feltmate and Legendre

Whereas this project will be set up as a separate legal entity by the proponents and the City, staff be directed to provide information detailing who would be responsible when the Municipal Service Corporation is created if liabilities and deficits arise.

Response: The establishment of a Municipal Service Corporation, should Council choose to exercise that option as permitted under section 203 of the Municipal Act, 2001, will not change the respective legal obligations to be assumed by OSEG and the City under the proposed Lansdowne Park Plan. The City would be the sole shareholder of the Municipal Service Corporation that would have its own board of directors. However, through a unanimous shareholder’s declaration, the City would prescribe the authority that the Municipal Service Corporation would have for overseeing the operations and programming for Lansdowne Park under the Lansdowne Park Plan. The OSEG could not assign to the Municipal Service Corporation any liabilities or deficits that were the responsibility of OSEG under the Project Agreement between the City and OSEG.

9. Motion 71/28 - Councillors Leadman and Doucet

Whereas there are financial considerations associated with the phasing of the OSEG proposal staff be directed to provide this information, in particular addressing what will be built first, the stadium or the commercial elements.

Response: As proposed in the September 2, 2009 LPP report, the redevelopment plan proposes commencing construction in July 2010. This timeline is considered unattainable by staff; and it has therefore been revised in consultation with OSEG.

A revised schedule that better reflects the planning and approval process is presented in the Lansdowne Partnership Plan Implementation Report. Document 2 in this report outlines the tasks required to transform Lansdowne Park as per the LPP. Construction would commence in the second quarter of 2011. Basic site work would begin the process with improvements to the infrastructure. In the three-month period from April to June 2011, construction of the parking, retail, residential, Civic Centre and Stadium components would be initiated. The concurrent construction is required to attain the end delivery date of April 2013 as specified in the September 2, 2009 report to Council.

The LPP proposes that the office and hotel development would occur subsequently, commencing after April 2013 and extending into 2014. However, should Council determine that it would like to proceed with the inclusion of the proposed office and hotel, it is recommended that, if feasible, this be undertaken at the same time as the rest of the site redevelopment. This approach would minimize multiple disruptions to Glebe and area residents as well as to businesses along Bank Street.

10. Motion 71/29 - Councillors Holmes and Doucet

Whereas there is an expectation that extra care would be required when evaluating a proposal in the absence of comparative and competitive bids that the implementation report include provisions for an independent due-diligence financial evaluation of the proposal and this evaluation will deal with assumptions about interest rates, construction costs, revenues from football and revenues from taxes.

Response: The City Manager has discussed this direction with the City’s Auditor General. As outlined in Recommendation 2 (a) (i) of this report, it is recommended that a final review of the financial projections of the LPP be completed by the Office of the Auditor General and that the Auditor General provide Council with a supplementary report on the accuracy of these forecasts as well as the reasonableness of the assumptions used in their development.

11. Motion 71/30 - Councillors Leadman and Doucet

Whereas there are legal and financial consequences related to the awarding of contracts for this proposal to move forward that staff be instructed to outline the process for tendering the stadium contracts, specifically responding to the question will it be the City or OSEG assuming the lead role, in the implementation report.

Response: Under the Lansdowne Partnership Plan it is proposed that the City, or a Municipal Service Corporation should Council choose to establish one, would enter into a long-term head lease with OSEG for the entire Park and would contract OSEG to undertake the redevelopment and construction for Lansdowne Park. Thus, OSEG would take the lead role in tendering the construction contracts for the stadium and the arena. Once the construction budget has been finalized between the City and OSEG, OSEG will assume the construction risk during the redevelopment period and the operations risk on revenues and expenses once the site reopens. The construction contracts for the stadium redevelopment will be competitively tendered in accordance with City policy.

12. Motion 71/31 - Councillors Deans and Bellemare

Whereas Council had decided to consider sole sourcing the Lansdowne Park project to the OSEG unsolicited proposal; and WHEREAS not sole sourcing is a standard condition for receiving federal and provincial grants; that staff be directed to provide information in the implementation report regarding the eligibility of this project for federal and provincial funds under the proposed arrangement which will discuss the final disposition of the project.

Response: Council’s direction for this facility to be “confirmed as the City’s stadium priority for Federal and Provincial infrastructure funding” was addressed when the City Manager contacted representatives at both the federal and provincial levels of government this past April. The letters received from both levels of government indicate that should Council wish to proceed with the renovation of an open-air stadium, the respective governments would give consideration to a request for funding under existing programs., these are the same programs to which the City will be applying for funding for the City’s Rapid Transit Program

Subsequent to these letters, correspondence was sent from the Minister of Municipal Affairs and Housing to Council indicating the “any joint project must adhere to a proper Request for Proposal process in order to be eligible for provincial funding.” The potential application of this requirement is unclear but it may be satisfied by the fact that the stadium construction contract would be publicly tendered.

13. Motion 71/32 – Councillors Deans and McRae

Whereas the Lansdowne Park Proposal includes the assumption that the Central Canada Exhibition will move to Albion Road; and whereas the Proposal also refers to a plan to establish a new trade show venue near the Airport; and whereas the assumptions regarding the transportation infrastructure for this part of the City have changed since the decision to move to the Central Canada Exhibition to Albion Road was made; that the implementation report include a traffic study for the lands for the Central Canada Exhibition’s relocation and the potential new trade show site.

Response: An updated Traffic Impact Study was undertaken as part of the site plan application submitted in 2004 for relocation of the CCEA. Also, draft terms of reference for a traffic study have been prepared for assessing traffic impacts should it be determined that the tradeshow space would best be accommodated on Airport lands south of Hunt Club Road. Both the CCEA traffic study update and the draft terms of reference for a traffic study for the potential relocation of the tradeshow to the Airport lands are contained in Documents 7, which is available through the City Clerk’s Office.

14. Motion 71/33 - Councillors Holmes and Doucet

Whereas Montreal does not allocate bond financing or city park land from the municipality for the Allouette franchise, it is completely privately financed; whereas the OSEG proposal will be dependent on public bond financing and alienation of a city park for commercial development and city property taxes; that the City Treasurer and City Clerk & Solicitor prepare a report to Council outlining whether the OSED proposal would be compliant with respect to the bonusing provisions of the Municipal Act, 2001, and that this report be submitted prior to the Committee of the Whole meeting where public consultations will be presented.

Response: A prohibition against municipalities providing “bonuses” to commercial or industrial undertakings within that municipality has existed as a concept of municipal law for many years and is currently set out in section 106 of the Municipal Act, 2001. The granting of a bonus is sometimes broadly defined as the conferring of an obvious advantage or benefit by the Council of a municipality upon a person absent statutory authority (e.g. a rezoning pursuant to a duly authorized zoning by-law). However, there is no principle to prevent a municipality from making bargains and exercising its powers to carry out such bargains even if it may be that the municipality is not benefiting to as a great an extent as the other party with whom the bargain was made.

In the opinion of the City’s external legal advisor, Borden Ladner Gervais LLP, in view of section 106 of the Municipal Act, 2001 and the principles established by Canadian case law, when the entire arrangement currently contemplated by the Memorandum Of Understanding (MOU) for the Lansdowne Partnership Plan is taken into account, including its complex matrix of covenants, benefits and services provided by each of the City and OSEG to create the Project, the arrangements contemplated do not result in the City granting a bonus to OSEG.

Amongst the factors leading to BLG’s conclusion are the exclusive right of OSEG to a football franchise for the City of Ottawa, the required equity contributions by OSEG and other services to be provided which create the ability of the City to provide benefits to the public contemplated by the Project which, without the contributions of OSEG do not appear feasible. In addition, the requirement that there be a “closed system” for the collection of net cash flow from each of the components (other than the residential proceeds all of which go to the benefit of the City) and the “waterfall” of priorities of distribution indicates a highly negotiated exchange of benefits between the parties without conferring any obvious advantage on OSEG. Finally, a required safeguard for the City is that in the event of a partial disposition of the retail lease to an independent third party that may become part of the developer group that creates the retail component under the Lansdowne Park Plan, the third party is responsible to pay to the City fair market value rent for its proportionate leasehold interest.

15. Motion 71/34 - Councillors Doucet and Bédard

Whereas a solicited proposal requires a competitive process for purchase of city goods and services, and construction; and whereas City Council has approved a process refining a proposal from OSEG and whereas city staff have been working diligently with the proponents to clarify and define the proposal that the Auditor General be requested to determine if the OSEG bid remains unsolicited or should be considered as a project subject to the process under the Purchasing By-Law for Requests for Proposal, and that this report be made available prior to the Committee of the Whole discussion.

Response: As directed by Council, the Office of the Auditor General completed the audit to determine if the OSEG bid remains unsolicited or should be considered as a project subject to the process under the Purchasing By-Law for Requests for Proposal. Due to the time required to complete the audit, the Auditor General’s report will be tabled for Council’s information and consideration on November 12, 2009.

16. Motion 71/36 - Councillors Legendre and Bédard

Whereas as Council has requested an unsolicited proposal for a LPP and whereas City staff have reviewed the proposal for value-for-money that the AG be requested to consider auditing the staff review of the proposal and that his audit report be tabled prior to Council’s scheduled approval of this partnership proposal.

Response: As directed by Council, the Office of the Auditor General completed the audit of the staff review of the proposal. Due to the time required to complete the audit the Auditor General’s report will be tabled for Council’s information and consideration on November 12, 2009.

October 6, 2009 Corporate Services and Economic Development Committee

1. Councillor Cullen - That Council be informed on the cost difference of financing the City's debt ($101.6 million for the stadium plus $15.3 million for the parking structure) from the private market based on commercial rates that would be available to OSEG vs. the preferred rate that the City would get based on its triple-A rating. The commercial rates are traditionally much higher (due to higher risk associated with private investors) and so the difference would represent the subsidy to OSEG to build both the stadium and the parking structure, both of which OSEG will operate and retain the profits.

Response: As proposed, the City's debt financing would be used to renovate the stadium and build a parking structure. Since the estimated future revenues from the stadium itself are not projected to cover operating expenses and provide positive returns, the stadium itself does not provide sufficient collateral to secure the financing required unless additional security is made available either from the private sector or from the City itself in the form of a guarantee.

The City's experience with private sector financing for Public Private Partnership (P3) projects, indicates that if the City guarantees the loan, the cost of the loan will be close to what the City could borrow directly. If the loan is supported by a City obligation to pay rent or commit to a flow of revenue, which is sufficient to cover debt service, the cost of the loan may be 0.25% to 0.6% higher than the rate the City would pay for borrowing the funds in its own name. For the amount of the proposed loan for the Lansdowne Park proposal, this would amount to an additional $240,000 to $480,000 per year.

It is important to note that any net cash flow from the operation of the stadium and parking lot is not retained by OSEG under the LPP proposal but is instead shared between the City and OSEG.

2. Councillor Jellett - That staff provide estimates of what it would cost the City to undertake the proposed project on its own, without a private-sector partner.

Response: Staff discussed this direction with Councillor Jellett who confirmed that the intent of the direction is to determine the cost of constructing a similar stadium on an alternate site.

The full estimated project cost associated with the delivery of a comparable stadium, similar in size to the existing Civic Centre and Frank Clair Stadium would range between $160M and $175M depending on the scope of the construction program. This cost does not include the land acquisition cost for the alternate site.

3. Councillor Jellett - That staff provide costing for the proposed project without a retail component.

Response: Staff discussed this direction with Councillor Jellett who confirmed that the intent of the direction is to determine the cost of constructing the project at Lansdowne without the retail component.

This cost is estimated at $136.8M which assumes the cost of refurbishing the stadium components ($110M), constructing the underground parking component for the stadium (19.3M), the front lawn ($2.5M), the refurbished Horticultural Building ($5M) and retaining the Aberdeen Pavilion.

4. Councillor Deans - That staff go back and look at the conditions outlined in the motions approved by Council on 22 April 2009 and advise as to how the proposal would change if those conditions were incorporated as it relates to trade shows, housing and size and scale of commercial developments.

Response: With respect to trade and consumer show space, housing, and the scale of commercial developments, the April 22, 2009 Council Motions directed that:

· Part Motion #65/9 “staff negotiate a partnership agreement with The Ottawa Sports and Entertainment Group (OSEG) to redevelop Lansdowne Park, including revitalizing the Civic Centre and Frank Clair stadium, enhancing Trade and Consumer Show space and protecting the Ottawa Farmer’s Market, based on a revenue- and value-neutral basis, subject to Committee and Council approval”

· Part Motion #65/10 “That the plan respect the scale and character of the neighbourhood and the public nature of the site, and that:

a) There be no housing component;

b) There be no large format commercial;

c) Commercial uses be limited to uses that support the main uses on the site, and/or that are compatible with the neighbouring business districts”

Trade Show and Consumer Show Space:

As set out in Section 6.2 “Trade and Consumer Show Plan” of this Report, a staff assessment of providing additional, better quality, and contiguous Trade and Consumer Show space at Lansdowne Park indicates that there would be significant conflicts in achieving the other uses set out by Council for Lansdowne including the greening of the Front Lawn.

In order to meet the minimum requirements of the Trade and Consumer Show Industry in Ottawa over the long term, staff also concluded that enhanced facilities would be best provided by a new purpose built trade and consumer show facility at a location outside of the central area of the City similar to what has happened in most other cities.

In preparing this response, staff consulted with Councillor Deans who recalled that previous visioning exercises carried out by the former City of Ottawa resulted in unanimous feedback from participants that the primary use, for a redeveloped Lansdowne Park, should be Trade and Consumer Space.

As a result, staff then reviewed the report regarding the April 1996 Lansdowne Park Charrette and this confirmed that all five teams felt that the main line of business for a redeveloped Lansdowne Park should be Trade and Consumer Show Space and that a significant amount of additional new purpose built space should be provided.

In that regard, three of the teams identified adding approximately 100,000 sq. ft. of new space below grade in a space located between the Aberdeen Pavilion and the Driveway and just north of Frank Clair Stadium with the new space linked underground to both the Civic Centre and the Aberdeen Pavilion. Another team identified adding approximately 100,000 sq. ft. of new space under the field at Frank Clair Stadium, by raising the field, with the new space linked to the Civic Centre space. The remaining team indicated that the sports facilities at Lansdowne show should be eliminated which would provide sufficient space to construct a new purpose built trade and consumer show facility.

It is also noted that the subsequent RFP process conducted by the former City of Ottawa in 1997/1998 resulted in only two proposals and that trade and consumer show space was not included in the preferred proposal being recommended to the Council of the day notwithstanding the feedback from the charrette process.

This would appear to support the conclusions set out in Section 6.2 of this report that the provision of enhanced Trade and Consumer Show space, to meet that industry’s requirements, would be best provided by a new purpose built facility at a location other than Lansdowne Park.

Housing:

Housing is not an element of the initial stage of the Lansdowne Partnership Plan (LLP) and is not required to finance the key elements of the LLP. The housing component has been included only as an option should the City wish to have the ultimate development comply with the current direction of its OP policies.

Commercial Uses:

Ensuring the appropriate types, volumes and mixes of retail uses, necessary for Lansdowne Park to become a destination that both compliments and supports existing retail businesses in the area, is critical to the success of the LPP. In this respect, Section 4.2 “Retail Strategy” of this Report indicates that OSEG must provide more definition regarding its retail strategy including confirming the sizes, mixes and types of the different retail uses to be accommodated and then a peer review should be undertaken of the two separate market studies carried out for OSEG and Glebe BIA.

Therefore, Recommendation 2 (a) (iii) of this Report provides as follows: “That a third-party, independent peer review of the Lansdowne Retail Market Demand and Impact Analysis produced by Tate Economic Research Inc. and the Market Research Study: Glebe Business Improvement Area Ottawa, Ont. produced by the Market Research Corporation be undertaken to determine whether or not the commercial component of the LPP is viable, is compatible with the desire to have destination specific retail and is complementary and supportive of the existing Bank Street retail business community.”

5. Councillor Legendre - That staff provide an estimate of what it would cost to demolish and remove the existing paved parking lot on the site to convert the Lansdowne site to a true “park” and also include the existing funding that would be freed-up, and partially support, this alternate vision of Lansdowne.

Response: Staff discussed this direction with Councillor Legendre who confirmed that the intent of the direction is to determine the cost estimate for the retention of the Aberdeen Pavilion and Horticultural Building, along with a portion of the site for associated parking areas. The remainder of the facilities, including all stadium elements and the Civic Centre structure, would be demolished with the lands then being converted to a park.

Staff established an order of magnitude cost of $30M (Scenario 1) for demolition ($15M) and basic greening of the site ($10M) plus an allowance to upgrade the aging Horticultural building ($5M) since it is at the end of its effective service lifespan. However, for an additional $15M, the greening component could be brought up to a level that includes park like amenities and features similar to what is being proposed for the front lawn of the LLP. The cost of the proposed front lawn is estimated at $5M but the remaining area would be approximately 3 times the size resulting in a cost estimate of $15M. This scenario would result in a total cost of approximately $45M ($30M plus $15M).

The annual debt servicing costs for Scenario 1 ($30M) is estimated at $2M, and $3M for Scenario 2 ($45M). Since costs are estimated at $3.8M over a ten-year period for the current status at Lansdowne, this would result in a net savings of $1.8M for Scenario 1 and $0.8M for Scenario 2. However, the above estimates do not account for ongoing operational costs and future life cycle costs associated with the proposed alternative.

October 8, 2009 Joint Transportation Committee and Transit Committee

1. Councillor Doucet – Notice of Motion (For consideration at Council on November 12 and 13, 2009)

Whereas it has become clear that a major renovation of the Civic Centre needs to be undertaken in order to ensure that Ottawa trade shows and hockey continue to be located at Lansdowne regardless of whether the Lansdowne Live proposal goes forward;

Be it Resolved: that OC Transpo come up with a plan to serve an upgraded Civic Centre during Junior Hockey and Trade Shows.

Response: The level of transit service required to effectively serve activities and events at Lansdowne and the manner in which this will be achieved is a key element of additional works to be undertaken to further develop the LLP. This Notice of Motion will therefore be fully responded to following Council consideration of this submission in the context of the further work required as outlined in Recommendation 2 of this report.

Inquiries from the Joint Transportation Committee and Transit Committee meeting:

1. Could staff provide information for Council regarding the adequacy of the NCC’s commitment (as per the Letter of Understanding) to the transportation needs of each of the two phases of the OSEG – Lansdowne Partnership proposal and the risks associated with the state of that commitment, in advance of the Council decision in November 2009.

Response: The Letter of Understanding signed by representatives of the NCC and the City prior to Council’s receipt of the LPP in September, sets out both the City’s and the NCC’s commitment to collaborate in the planning of the public lands, which will form the front lawn, at the interface of Lansdowne Park and the Rideau Canal – Queen-Elizabeth Driveway corridor.

Some discussions with the NCC have occurred regarding other considerations of the LPP including transportation. Once the additional transportation study and associated traffic demand management plan are complete, staff will engage in further discussions with the NCC to confirm past practices for continued use of the Queen Elizabeth Driveway (QED) for transit for larger stadium events. The Letter of Understanding speaks to the desire of both parties to see that the results of this collaboration result in advancing the goals and objectives the City of Ottawa and the NCC for this site.

2. Could staff provide information for Council regarding the adequacy of the City’s information on transportation needs for each of the two phases of the OSEG – Lansdowne Partnership proposal and the risks associated with the state of that information, in advance of the Council decision in November 2009.

Response: The work undertaken to develop the LPP Transportation Strategy was based on a level of assessment that has allowed a determination to be made that the strategy developed can be implemented and be effective for the LPP. This strategy now serves as the basis for undertaking a necessary transportation study and supporting transportation demand management plan. This work would be undertaken following Council consideration of this report.

3. That staff provide the costs of renovating the Civic Centre but dismantling the outdoor stadium, in advance of the Council meeting on 12 and 13 November 2009.

Response: This inquiry is addressed by a presentation made by the City Manager to PEC and CSEDC on April 20, 2009 for the Assessment of Stadium Proposals.

The presentation included Option (B) on Slides 4 and 5 entitled “Civic Centre Full Contemporizaton” which described the following scope of work:

Removal of the South Side stands and Frank Clair Stadium;
Removal of the North Side stands, seating and the cantilevered roof;
Install new roof structure to Civic Centre;
Install upgraded arena amenities and finishes; and
Removal of the Coliseum Building

The estimated cost for this option was $45.25M for renovations to the Civic Centre and the demolition of stadium elements plus minor capital works. The above costs do not include any operating costs.

Alternative Option

Document 1 details the Council and Committee directions and provides a staff response, which includes how the directive has been, or will be, responded to should implementation of the LPP move forward. However, along with the various directions provided by Council, there were several directions requesting feedback on alternate options for Lansdowne. In light of this, City staff requested that the OSEG provide an example of an alternative development scenario that might be acceptable to them.

The scenario presented by OSEG is based on a reduction in both the retail and office components, shifting portions of the second floor retail space to office use, and a return of the Aberdeen Pavilion to the City for inclusion in the front lawn. As would be anticipated changing the terms of reference to the LPP has an impact on a multitude of variables in the business plan. The implications of each alternate option, relative to the negotiated LPP, are complex and difficult to present in a high level overview. The change in Phase 1 of the LPP proposal is shown below.

Comparison of Phase 1 in the Original LPP Proposal and the Alternative Option
Original LPP Proposal		Alternative Option
Space Designation	Square Footage	Space Designation	Square Footage
Retail	199,000 sq. ft.	Retail	150,000 sq. ft.
Office	77,000 sq. ft.	Office	71,000 sq. ft.
Cinema	47,000 sq. ft.	Cinema	47,000 sq. ft.
Unique Food Store	41,000 sq. ft.	Unique Food Store	41,000 sq. ft.
Ottawa Farmer’s Market (Horticulture Building)*	16,000 sq. ft.	Ottawa Farmer’s Market (Horticulture Building)*	16,000 sq. ft.
Specialty Restaurants (Aberdeen Pavilion)	15,000 sq. ft	Specialty Restaurants (Aberdeen Pavilion)	0

* Note: The Horticulture Building should not be included in the retail numbers, as it does not contribute rents or tax revenues to the pro forma.

The alternate scenario reduces the retail development by 49,000 square feet (approximately 25 per cent) and office use by 6,000 sq. ft. (approximately 8 per cent). The reduction of 55,000 sq. ft. of income producing commercial development has numerous implications on the OSEG business model. The high level implications to the City are the cost to program the Aberdeen Pavilion and a lower tax base to generate property tax revenue to fund stadium debt repayment.

The drop in property tax revenue corresponds to a decrease in property assessment. The lower assessment reflects the size reduction, and a modest shift to more office space. Also, oOffice space carries a lower market value than retail and thus produces a lower assessment. In addition, the net commercial office property tax rate is less than the commercial retail rate. As a result of these three factors, the modifications to the original LPP will decrease the property tax revenue by approximately $900,000. The gap between City revenue streams and the debt repayment for the stadium renovation will increase by this amount.

To offset this lost income stream, OSEG proposes to include two components of Phase 2 in the original LPP as part of the alternative option. The immediate development of the hotel and office components would generate tax revenue to narrow the funding gap. The ~~Hotel~~ hotel (180 units, ~~0000~~ 100,000 sq. ft.) and office (~~0000~~ 97,000 sq. ft.) would be built concurrent to with the rest of the project elements. It is estimated that these components will generate, based on an allocation of 75 per cent of the City property taxes, revenue of approximately $810,000. ~~900~~The difference between the original Phase 1 of the LPP and the OSEG alternative option, inclusive of Phase 2, would result in is a modest decline of $90,000 in revenue to the City~~negligible~~.

Lansdowne Partnership Plan (LPP) Implementation Schedule Document 2

LPP Implementation Cost and Resources Estimates Document 3

TABLE 1 - STAGE 1 Consultant Cost Summary for Lansdowne Partnership Plan
Task Name	Total Costs	City’s Share	OSEG Share
Evaluate Business Terms Definition of Business Terms Quantify Life Cycle Obligations Realty Tax Review Evaluate and Revise Business Model	$70,000	$35,000	$35,000
Negotiation of Project Agreement Framework Legal Project Co-ordinator	$1,000,000 $150,000*	$500,000 $75,000	$500,000 $75,000
Develop Corporate Governance (Included in Legal Costs identified above)
Refine Development Concept Master Site Plan Retail Strategy Transportation Strategy Stormwater Management Pond Environmental Site Assessment Geotechnical/Engineering Works Heritage Requirements and Approval Process Open Space / Front Lawn Architectural work for refinement	**$1,000,000 $100,000 $50,000 $80,000 $130,000 $35,000 $40,000 $30,000 $100,000 $435,000	$412,500 $100,000 $80,000	$587,500 $0 $355,000
Special Agreements NCC, Parks Canada and Off-site Interests	$10,000	$5,000	$5,000
Special Tasks CCEA Relocation Plan Trade & Consumer Show Plan Traffic Study	$105,000	$105,000
Total Summary	$2,335,000	$1,132,500	$1,202,500

* Note 1: It is understood that the City’s share will be $600,000 of the $1,000,000 but the costs will be split equally between both parties. The City’s share is higher since the City’s legal team is responsible for taking the lead in drafting the Agreements.

** Note 2: Costs are split equally between the City and OSEG, except where these costs broken out separately.
Summary of Official Plan Directions Document 4

This document highlights the key directions of the Official Plan (OP). These directions provide context for the Lansdowne Partnership Plan (LPP) development concept to ensure that the concept would be both responsive to, and would advance key directives of the OP applicable to determining a development concept for any revitalization of Lansdowne. These directions, in addition to the April 22, 2009, directions will continue to serve as the key frame of reference for further developing the LPP as it relates to the development program for Lansdowne.

Strategic Directions: The Strategic Directions detailed in Section 2 of the OP establishes the underlying foundation of the Plan’s policy thrusts. Those of particular relevance to the development of Lansdowne deal with intensification, maximizing use of existing infrastructure, compatibility and design.

Policy References:

Section 2.2.3 - Managing Growth within the Urban Area
Key Directions

1. Direct growth to locations with significant development potential.
Mainstreets are identified as one of the areas where growth is to be directed to so as to reinforce and strengthen their role as focal points for shopping, offices and community interaction with mixed-use development including residential uses being encouraged.

2. Development along Mainstreets to sensitively build on existing neighbourhoods and contribute to achieving a strong pedestrian orientation

3. Supports capitalizing on opportunities for intensification within the General Urban Area land use designation.

4. Requires that all development occur in accordance with design objectives and principles set out in Section 2.5.1

Section 2.3.1 - Transportation
Key Directions

1. A key thrust of the OP related to transportation is to increase use of sustainable transportation including walking, cycling and transit and reducing dependence on automobile use, especially for peak period travel.

2. Land use is acknowledged as being a key element of achieving the Plan’s transportation objectives and direction is provided to encourage land use patterns that reduce the need to travel across the city for different trip types and encourage alternatives to car travel.

3. The specifics of how the City’s transportation objectives will be achieved are set out in the TMP

4. Regarding parking, the OP sets out a strategic direction to have short term parking provided to support interests of local businesses, institutions and tourist destinations, to limit the supply of long term parking to support achieving transit objectives while minimizing parking spill over into adjacent residential areas, and to minimize the amount of land devoted to parking through shared parking, and providing parking in structures.

Section 2.5.1 - Compatibility and Community Design
Key Directions

1. Provides for development that contributes to enhancing established communities and co-exists without causing undue adverse impacts

2. Key principle is that new development “fits well” in its physical context and “works well” among those functions that surround it

3. Sets out a series of design objectives and principles as qualitative statements of how the city wants to influence the built environment as it matures and evolves. The key objectives are:

o To enhance the sense of community by creating and maintaining places with their own distinct identity

o To define quality public and private spaces through development

o To create places that are safe, accessible and easy to get to and move through

o To ensure that new development respects the character of existing areas

o To consider adaptability and diversity by creating places that can adapt and evolve easily over time

o To promote environmental sustainability in development

Section 2.5.4 - A Strategy for Parks and Leisure Areas
Key Directions

1. Linking parks and leisure areas which includes major facilities such as Lansdowne to the Greenspace network (canal green space corridor)

Section 2.5.5 - Cultural Heritage
Key Directions

1. Protect and maintain heritage buildings and where these are owned by the City, to improve and manage these to advance the heritage objectives of the plan

Land Use Designations: Lansdowne Park is designated as Traditional Mainstreet along the Bank Street frontage and General Urban on the balance of the site. It is also considered a Major Urban Facility and is subject to the policies in the plan dealing with major urban facilities. These include major sports, recreational and cultural facilities of a scale similar to Lansdowne Park.

Policy References:

Section 3.6.1 - General Urban Area

Key Directions

1. Very permissive policy permissions for a wide range of uses including permitting major urban facilities in accordance with policy 3.6.7

2. Development is to be assessed in the context of Section 2.5.1 and Section 4.11

3. More intense uses/development is directed to locations where potential impacts on and conflicts with established residential areas can be mitigated

4. Within established communities, direction is provided for development to integrate well with the existing community character to enhance and build upon desirable established patterns and built form.

Section 3.6.3 - Mainstreets

Key Directions

1. Generally 4-6 storey built form, with higher heights permitted where appropriate from a context perspective – i.e., gateway, at a major corner, where compatibility factors can be addressed etc.

2. Buildings are to have a minimum height of two stories to ensure appropriate enclosure and intensity of development for the street

3. Supports and encourages compact mixed use development and requires development to be close to the street with a strong pedestrian orientation to contribute to pedestrian activity and animation

4. Ground floor uses are to be street related and are to contribute to pedestrian activity and interest

5. Parking can not be located between the street and buildings to ensure buildings will relate directly to streets and support achieving a pedestrian orientation for development

6. Major urban facilities are permitted in accordance with policy 3.6.7

7. Development to be assessed in the context of Section 2.5.1 and 4.11 to ensure appropriate fit and a compatible relationship with the site’s current or planned context.

Section 3.6.7 - Major Urban Facilities

Key Directions

1. Requires where an amendment to the Zoning By-law is considered to permit ancillary uses to locate on the same lot as a major urban facility, that the ancillary uses are secondary to and supportive of the primary use and that the addition of ancillary uses does not result in a scale of development that is incompatible with adjacent residential uses.

Phase 1 Business Plan Presentation to CSEDC on October 6, 2009 Document 5

LPP Transportation and Transit Strategy to Joint Transportation Document 6
Committee and Transit Committee on October 8, 2009

Albion Road Traffic Impact Study Up-date and Terms of Document 7

Reference: Hunt Club Traffic Study (Ottawa International

Airport Tradeshow Site)

Please note: Document 7 is available through the City Clerk’s Office.

SUBJECT:	LANSDOWNE PARTNERSHIP PLAN (LPP) IMPLEMENTATION REPORT

OBJET:	RAPPORT SUR LA MISE EN APPLICATION DU PLAN DE PARTENARIAT DU PARC LANSDOWNE (PPPL)

Report to/Rapport au:

SUBJECT:

OBJET:

REPORT RECOMMENDATIONS:

RECOMMANDATIONS DU RAPPORT

EXECUTIVE SUMMARY

BACKGROUND

DISCUSSION

Page 10

STAGE ONE – Refine LPP Agreement – November 2009 to May 2010

STAGE 3 – Final Design and Construction – March 2011 to May 2014

CONCLUSION

On-line Consultations

LEGAL / RISK MANAGEMENT IMPLICATIONS

SUPPORTING DOCUMENTATION

DISPOSITION

September 2, 2009 Lansdowne Partnership Plan – Report recommendations as amended:

October 6, 2009 Corporate Services and Economic Development Committee

October 8, 2009 Joint Transportation Committee and Transit Committee

Comparison of Phase 1 in the Original LPP Proposal and the Alternative Option

Original LPP Proposal

Alternative Option

Retail

Unique Food Store

Evaluate Business Terms

Special Agreements

Special Tasks

Total Summary