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No More Extensions Expected for Ottawa Senators Arena Mediation

RendezVous LeBreton, Ottawa

Ongoing Ottawa Senators arena mediation efforts have a deadline of Thursday that cannot be extended, warns one key official as that date approaches. 

The Senators spent several years pursuing a new arena as part of a larger LeBreton Flats redevelopment initiative, but the status of that project came into doubt in late 2018 amidst a series of legal battles. Senators owner Eugene Melnyk filed a $700 million lawsuit against RendezVous LeBreton Group business partner John Ruddy, alleging that Ruddy had a conflict of interest because he was planning to build a condominium tower on a nearby property through a separate development effort, and had kept those plans hidden from Melnyk and his Capital Sports Management Inc. (CSMI). Ruddy then countersued Melnyk and CSMI for more than $1 billion, with one of his contentions being that Melnyk and CSMI were kept in the loop on the condominium development plans.

Last month, the National Capital Commission (NCC)–the crown corporation that controls the LeBreton Flats land–gave the two sides an extension until February 28 to settle their differences through mediation led by former Ontario chief justice Warren Winkler. As that deadline approaches, Heritage Minister Pablo Rodriguez is warning that the NCC will not grant an extension if the two sides fail to reach an agreement by the deadline. Should the discussions not yield a solution by the deadline and the NCC passes on issuing an extension, it could start a new process for redeveloping the LeBreton Flats land. More from the Ottawa Sun:

“The NCC was very clear,” Heritage Minister Pablo Rodriguez said Tuesday. “There’s a deadline for Feb. 28 and there will be no extension.”

The main issue, as it has been for some time, is how the project’s extensive risks and potentially large profits should be shared. Shortly before the relationship between Trinity Development founder Ruddy and Ottawa Senators owner Eugene Melnyk degenerated late last year into $1.7 billion in suits and countersuits, Melnyk had been willing to forgo his share of the profits in exchange for a rent-free arena for his NHL team. Ruddy has been insisting that Melnyk should pay arena rent on commercial terms. What to do with the proceeds of the sale of the Canadian Tire Centre and surrounding property also figured into the mix….

If there’s no agreement Thursday between Ruddy and Melnyk that would spell the end of their RendezVous LeBreton partnership. It would also free the NCC to launch a new process for redeveloping the Flats. The NCC warned six weeks ago that it had plans already in place, but would wait to see if Winkler’s mediation proved successful.

Rodriguez made clear Tuesday the NCC is still committed to a transformative project on LeBreton Flats. Whether this would mean starting a competitive bidding contest from scratch is an open question. Such a turn would give members of Devcore Canderel DLS — the runners-up in the contest to redevelop LeBreton — a shot at taking part, perhaps in partnership with either Ruddy or Melnyk.

The arena project has been viewed as a potential boost to the Senators, who have struggled with revenue and attendance issues at Canadian Tire Centre, their current home in suburban Kanata. However, the issues between Melnyk and Ruddy have been casting doubts over whether the concept will be able to proceed in some form.

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