Lansdowne still in startup mode, OSEG says

Three years after the Ottawa Redblackskicked off their inaugural season at the renovated TD Place Stadium, the Lansdowne Park project remainsin startup mode,the team's owners told the city's finance and economic development committee Tuesday.

• OSEG posts $14M net loss for Lansdowne in 2016

According to an annual report delivered by Ottawa Sports and Entertainment Group whichowns the Redblacksand two other sports teams, and runs TD Place and Lansdowne's commercial district attendance and financialshave improved, but still fell belowexpectations.

Attendance at Lansdowne was up 41 per cent to 3.4 million people in 2016, and OSEG posted a $2.9-million operating profit, compared to a $1-million loss the previous year.

We're still in the startup phase, we're still learning how to manage all the activities that are taking place.- Roger Greenberg, OSEG

But revenues for the year came in at $50 million, about $5 million less than originally expected. And Lansdownedidn't host as many large stadium events as planned.

Guns N' Roses is coming to TD Place later this summer, butOSEG would like to have at least two major rock concerts at Lansdowneeach year, a target that'sproving difficult to achieve because the low Canadian dollar is foiling promoters' efforts to attract big acts to Ottawa,said Roger Greenberg, OSEG'sexecutive chairman and managing partner.

2017 expected to be big year

"We would have liked themto be better," said Greenberg of OSEG'sfinancial results, adding that he'd like to see as many as 130 events at Lansdowneas opposed to last year's total of 100.

Greenberg saidthe organization is learning every year how to better run Lansdowne, particularly large events. That belief is behind OSEG'scontinually increasing forecast for its long-term financial success, despite missing its short-term targets.

"We're still in the startup phase, we're still learning how to manage all the activities that are taking place," Greenberg told reporters.

"So we always want things to be better, noquestion about it, but we're happy with the way things are right now."

OSEG has big hopes for the current year, especially when it comes toevents related to the Grey Cup and the outdoor NHL game later this year. The group is forecasting fourmillion visitors this year.

'Delighted' by retail

Greenberg said Lansdowne'scondo tower is virtually full, and saidretail space is about 95 per cent leased.

"We're delighted on how the retail is performing," said Greenberg. He acknowledged that a few retailers have pulled out of Lansdowne, suggesting to councillors it was the businesses' own fault.

"Frankly, they just weren't good retailers," said Greenberg, adding new retail tenants will be announced soon to replace them.

An officetower on the edge of the Lansdowne site isn't faring so well. It's only half-occupied, and Greenberg said he doesn't see that changing before next year.

"It's proven to be a bit more challenging to fill up that building than we had anticipated," said Greenberg, who blamed a recent spike in downtown office vacancy rates.

Grey Cup cost OSEG $1M

Winning the Grey Cup also proved expensive, according to the annual report.According to OSEG'schief executive officer, Bernie Ashe, bonuses for Redblacksplayers and staff contributed to the financial burden.

Then there were the travel costs: as host of the Eastern finals in 2016,the Redblacks had to pay for the visiting team's expenses to come to Ottawa. The CFL's rules are reportedly being tweaked in time for the 2018 season, but cost the Redblacks last season.

The Grey Cup expenses contributed to a $14-million net loss for OSEG in 2016, includingdepreciation costs and loan repayments.

Ottawa is hosting the 2017 Grey Cup at TD Place.

Popular attractions

The committee also heard from the city's general manager of parks and recreation, Dan Chenier, that public programming at Lansdownehad increased, as had attendance.

The city invested about $235 million to refurbish TD Place Stadium andthe Horticulture Building, and to construct the urban park.

Weddings at the heritage-designated Horticulture Building are popular despite "climate control" issues that will eventually require a new $1-million air-conditioning system. Winter farmersmarkets, the outdoor skating court, family roller-blading and full moon yoga were also popular events at Lansdowne.

This year more than 80,000 people have visited the "Ottawa Welcomes the World" exhibits put on by various embassies in the HoritcultureBuilding. Embassies didn't pay any rent, but Mayor Jim Watson said the exhibit was used as a draw to bring more people to Lansdowne, especially on non-event days.

The city made $100,000 less in operating revenuethan expected in 2016, but came within its $1.7-million budget for Lansdowne.