Documents mentioned in the Friends of Lansdowne court case are now posted for the public record. See them here:

• Transcript Vol I Kent Kirkpatrick
• Transcript Vol II Kent Kirkpatrick
• Transcript Vol III Kent Kirkpatrick
• Transcript Vol V Kent Kirkpatrick
• Transcript Vol VI Kent Kirkpatrick
• Transcript Vol VII Kent Kirkpatrick
• Affidavit Kent Kirkpatrick Dec 20 2010
• Supplementary Affidavit K Kirkpatrick Apr 26 2011
• Deloitte Report
• Sports Complex Opportunity Assessment March 23, 2009
• Stadium Evaluations March 23, 2009
• Lansdowne Park Business Plan June 9, 2010

June 22 & 23, 2011  Of Waterfalls, Champagne and Bonuses

On Wednesday June 22 at the Elgin St. Courthouse it was Waterfall Revelation Day— and all about how the financial architecture of the Lansdowne deal discriminates against City of Ottawa taxpayers and overwhelmingly favours the OSEG developer group.

FOL lawyer Steven Shrybman explained to Justice Hackland how the financial hierarchy of the deal is arranged into a tiered structure that gives initial and favoured priority of investment return to OSEG and little if no investment return to the City. Shrybman noted that payments from the Waterfall for the 10 acres of public land will not flow to the City before 2038, some 27 or more years from now, if any flows at all. The overall arrangement is discriminatory in favour of OSEG against all other potential bidders and a clear breach of Sec. 106 of the Municipal Act, which prohibits bonusing of commercial enterprises.

Mr. Shrybman explained how OSEG is always in first position for payment of revenues from the overall scheme and is in a preferred position in the Waterfall scheme. OSEG will be paid an annual return on invested capital of 8%. The City will receive a similar return on its funding equity, which is now estimated to be much less than OSEG’s equity. After receiving the initial 8% return, OSEG will maintain a privileged priority payment position over the City─ the entire capital that OSEG invests will be paid back to it, before the City sees any return payment on its land, which is called “deemed equity” and is valued at only $20 million. The public land will be leased to OSEG at $1 a year for 30 years.

“More worrisome, still,” Shrybman argued, “if there are any losses incurred in the operation of the stadium and sports franchises, losses which are indeed projected in the pro formas advanced by the City, such losses will be capitalized as an equity contribution from OSEG and be positioned in priority position to be repaid from the Waterfall”.

June 21, 2011 First Day in Court

Lawyer Steven Shrybman kicked off the Friends of Lansdowne (FOL) legal challenge in Superior Court against the City's Lansdowne development scheme today, arguing that the City failed to serve the public interest by breaking its own procurement by-laws and contravening its obligations under the Municipal Act to act in good faith and not provide unfair bonuses to private interests.

Shrybman emphasized that the FOL case is about openness, transparency, accountability, candour and an obligation of City Council and its senior staff to act legally. When questioned by Justice Hackland "...if the deal is a good one" Shrybman replied: "FOL's case does not concern the merits of the proposed Lansdowne scheme per se; our case is about Bad Faith not Bad Economics, and we contend that the City acted illegally in bad faith by misrepresenting the OSEG scheme."

Elaborating on the City's procurement policy obligations, the FOL lawyer argued that "Competition is the sine qua non of ensuring value for money to the taxpayer." By agreeing to receive an unsolicited proposal from OSEG during the initial Design Competition, the City impugned its legal obligations to conduct an open transparent competitive procurement. "It broke its own rules, as well as those laid down by provincial statute: "...The receipt of the OSEG sole source proposal was used to justify the abandonment of a competitive process, and that is what is unlawful," Shrybman stated. OSEG benefitted from the City's illegal actions "...by submitting through the back door and jumping the queue" he noted. In accepting the OSEG sole source proposal "what we really see is the the tail wagging the dog" said Shrybman, "a sports stadium wagging for a commercial and retail development."

The Lansdowne Legal Challenge is scheduled to begin at 2 p.m. on Tuesday, June 21 and continue Wednesday and Thursday, probably starting at 9:30 or 10:00 in the morning on those days. Please come out to listen in and to show your support for Steven Shrybman and his colleagues Colleen Bauman and Fay Brunning from Sack Goldblatt Mitchell.