Ottawa Senators owner Eugene Melnyk has filed a $700-million lawsuit against a business partner, leaving doubts about a proposed LeBreton Flats arena.
Over the last few years, Melnyk and his RendezVous LeBreton Group have been pitching a new Senators arena in downtown Ottawa as part of a larger LeBreton Flats redevelopment plan. John Ruddy has been serving as a business partner in that effort, but he is one of the defendants in a lawsuit filed last week by Melnyk. Within the lawsuit, Melnyk claims that Ruddy had a conflict of interest, as he was planning to build a condominium tower on a nearby property. That pursuit is separate from the LeBreton Flats initiative, and Melnyk contends in the lawsuit that Ruddy was using inside information from the arena project to plan his own competing development.
Ruddy is one of the defendants in the lawsuit that was filed Friday, along with Trinity Development-related companies and consultant Graham Bird. It remains to be seen how the proceedings will play out, but for now it is leaving questions about whether the arena project can move forward. More from The Province:
“The claim sets out the concerns of CSMI and Mr. Melnyk, and really we have to wait and see how the process plays out,” [lawyer Robert] Brush said. “I can’t say to you now one way or the other where Mr. Melnyk considers RendezVous. What we have to see is what response we get back and where things go from here.”
While people involved in the LeBreton negotiation have accused Melnyk of being the roadblock to landing a final development deal, Melnyk’s lawsuit claims he was kept in the dark about Ruddy’s development interest at 900 Albert St., across from the Bayview LRT station and near LeBreton Flats.
Trinity is part of TIP Albert GP, which last July received city council’s blessing to build a 65-storey condo complex at the high-profile junction of the municipal rail lines.
The lawsuit says Melnyk hired PricewaterhouseCoopers to look into the residential market and found the massive project at 900 Albert would “destroy the viability of the LeBreton project outright.” The market, according to the lawsuit’s description of the report, couldn’t support both projects.
Negotiations over the LeBreton Flats project have been taking place with the National Capital Commission (NCC), as the land that is targeted for the development is currently under public ownership. As part of that process, RendezVous was to have presented a finalized corporate structure by the beginning of this month. The NCC has agreed to push that deadline back to January, but is not ruling out the possibility of launching a new process to redevelop the land.
The Senators currently play their home games at the Canadian Tire Centre in suburban Kanata. A new downtown arena has been envisioned as a way to give the NHL team a more modern home than the 22-year-old venue, while providing a more favorable location that could help eliminate attendance and revenue issues, but it remains to be seen whether the concept will become a reality.
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