The $5 billion vision to redevelop Ottawa’s LeBreton Flats with massive residential and commercial projects – including a new arena for the Ottawa Senators – has been put on ice by the National Capital Commission (NCC) following an acrimonious dispute between the initiative’s two partners.
The NCC says in a statement that its board of directors “has resolved to terminate the preferred proponent term sheet, which was signed January 19, 2018, between Rendez-Vous LeBreton Group (RLG) and the NCC.” The NCC says the termination is effective in 30 days following the Dec. 19 notice, meaning it will take effect before its next board meeting at the end of January.
Shortly before the NCC announcement, Trinity Development filed a $1 billion counterclaim against Ottawa Senators owner Eugene Melynk, whose company a few weeks earlier had sued the developer, claiming that Trinity’s plans for a major project at nearby 700 Albert St. made the overall LeBreton project uneconomical.
In the counter-claim, Trinity’s founder John Ruddy made it clear that from his perspective, the Albert St. problem was not the issue behind the dispute. He asserted that the Senator’s organization, represented by Capital Sports Management Inc. (CSMI) was well aware of the project, which would be complementary, not competitive to the LeBreton project. Ruddy’s statement pointed out that it would be folly to think that Trinity would engage in both projects expecting that the LeBreton Flats initiative would be uneconomic even with the Albert St. project going forward.
In fact, Ruddy asserted that CSMI has failed to meet its financial obligations in the project’s planning stages, and it wishes to get a free $500 million arena.
Trinity’s Statement of Defence says that CSMI and Melnyk wanted the City of Ottawa or Trinity to fund and build the arena for the Senators, with the hockey club getting 30 years of free rent. The statement also asserts that CSMI also wanted naming rights power and “an unreasonable degree of control over the LeBreton project.”
In what may have been a last-ditch effort to resolve the matter shortly before the NCC’s “hold” announcement, Melynk proposed a revised arrangement where Trinity would build the entire LeBreton Flats project and pocket all of the revenue, as long as the Senators could run the arena.
However, Trinity would finance the project. CSMI proposed paying for operating and life-cycle costs during the lease term.”
Trinity indicated it isn’t interested in the latest CSMI proposal.
“Our court filings today made clear that Mr. Melnyk and CSMI have been demanding a free arena courtesy of local taxpayers and Trinity,” the statement said. “Mr. Melnyk’s letter does little more than confirm that fact. On its surface, it appears nothing has changed.”
It is unclear where things will go now.
The runner up in the NCC’s original LeBreton Flats redevelopment competition, Devcore Canderel DLS, has said it is ready to take over the project. But Devcore representatives said in the week before Christmas they hadn’t heard anything from the NCC about revisiting their proposal.
“The (NCC) Board of Directors is seized with the future of LeBreton Flats, and it is making sure that it is in a position to move quickly to maintain momentum on this important project,” the NCC said in its Dec. 19 statement. “The termination of the term sheet will allow the NCC to proceed with the next steps in the redevelopment process at its next public board meeting in January. This is also consistent with the commitment made at the NCC’s last public board meeting in November.”