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Staff say more modest Lansdowne budget possible, despite warnings from city's auditor general

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The City of Ottawa is moving forward with a $419 million budget estimate for Lansdowne 2.0 despite financial warnings from the city's auditor general.

According to Nathalie Gougeon, construction costs for a new event centre and a north side stands at TD Place could approach $500 million due to delayed construction and increasing cost.

Gougeon told reporters during a media availability after Monday's audit committee meeting, "I think as we highlighted in our report, there are specific elements that we didn't see considered in-depth enough when it came to determining aspects such as contingencies."

The audit report concludes construction cost estimates could be understated by $73.4 million for the new stadium and north-side stands, while costs for the new parking structure could be underestimated by $2.7 million.

"I do think it's important that taxpayers understand that, yes, there is obviously risks with projects and that also means escalating costs and we're seeing that in the (construction) industry right now. We're seeing extreme increases in overall construction costs," Gougeon said.

"We highlighted areas such as potential labor disruptions, changes to regulatory clearance, such as building code. We know there's a new building code coming into play next year, which, if there's any shifts in timeframe, could result in significant, costly impacts to this project."

Gougeon's report includes a different estimate when it comes to contingencies, or events that cannot be predicted.

Part of the report raises the potential risk of the Ottawa Redblacks leaving Ottawa, or not bringing in substantial revenue in order for the project to be successful. "I think the one piece we highlighted is next to the retail business line, the Redblacks are the next most profitable aspect for this overall partnership for the city. So, obviously, it's a key component. It draws many individuals so that, in itself, can have an impact on the success of the retail as well."

That is concerning for Capital Ward Coun. Shawn Menard, the councillor for the area where Lansdowne is located.

"It's a huge concern given that the Redblacks are only projected to be in Ottawa right now to 2032 and there's no guarantee or staff guarantee or OSEG guarantee that they're going to stay beyond 2032. The Redblacks are one of the reasons why we'd be doing this major investment," he said.

"To me, it makes no sense to tear down a stadium that could be refurbished."

Menard says the report is "important when it comes to discussions about whether or not this investment is the right one for the city of Ottawa and what we could otherwise spend half a billion dollars on when we have an affordable housing crisis, when we're seeing things like, concern about storms coming through and a response to those real pressing issues of basic services that the city has to maintain while also investing in the stadium that is projected to last for some time."

The approved concept plan for the Lansdowne 2.0 project. (City of Ottawa)

Staff say they will work within the $419 million budget, despite the financial warnings.

Kanata North Coun. Cathy Curry, chair of the audit committee, said Monday, that city staff indicated they're going to try very hard to make sure that it does stay with that estimate.

"When you're trying to renovate a kitchen, you have a lot of choices you can make. It's much more complicated than a kitchen, of course, but you can scale it back, and in this case you can say we're not doing it at all," she said.

"I just I really have a lot of faith in staff that we will try to get down to that actual number."

The final cost of Lansdowne will go before council next year after a contract has been awarded. The project still needs to go to tender. Staff say they are moving forward with the design process and site plan approvals. 

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