Sens Move to LeBreton Likely Dead

Internal issues within the RendezVous LeBreton Group have escalated to a $700m lawsuit

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If you’ve been following the LeBreton Flats development closely, you’ve had today circled on your calendar. The NCC board had an “in-camera” (ie: private) briefing yesterday on the topic, and today was the public meeting.

In the lead up, some concerns about how well things are going have popped up in the public. While not part of the NCC process, the planning applications with the city are apparently incomplete and a pending change at the top of the NCC ladder.

Those concerns were well founded, as the news was not good. While the NCC has been generally happy about the progress of their negotiations with the RendezVous Lebreton group, the NCC was advised of “unresolved issues within their partnership” by Trinity and Capital Sports (the Sens) on November 8th, and those issues would not be resolved by today’s meeting. The partnership was supposed to be solidified in June. When it was not, Trinity and the Sens were given a later deadline of November 1st.

In response, the NCC put forward a motion to push a decision to the next board meeting in January - not on whether to proceed or not, but if they would proceed with or without the RVL group.

Jim Watson, a non-voting member of the NCC board, expressed his disappointment in the current status, and in his role as Mayor of Ottawa essentially declared that the process between RVL and the city as being on hold until that NCC decision is made, and that RVL was being given “one last chance” to get things together.

After Watson’s comments, NCC board member Larry Beasley stated he was somewhat surprised when he found out that the bumps the NCC was experiencing while dealing with RendezVous were mirrored in the City’s dealings with RendezVous. He said that the NCC’s internal work on LeBreton has been slightly ahead of schedule, and that the co-ordination between the NCC and the city has been proceeding smoothly.

Board member Aditya Jha was skeptical that Trinity and Capital Sports could resolve their issues and execute the project.

In the end, the motion passed unanimously. The Senators and Trinity Developments have roughly two months to get their partnership in order and be ready to proceed, or the NCC will be moving forward with a new process.

A bit more information came out in the media scrum after the board meeting. NCC CEO Mark Kristmanson indicated that the issues appear to revolve around corporate structure, adding “There’s been a changing cast of characters”. Mayor Watson indicated that he had witnessed “a challenging relationship” between Melnyk and John Ruddy (the founder and Executive Chairman of Trinity Developments) during meetings between RVL and the city. When asked if he thought they could make it happen, his response was “we need to see solid evidence”.

You can read the NCC’s statement on the issue here.

Update, Nov 23rd, 9:46am:

While specifics are still thin, some have leaked out.

Chris Stevenson of The Athletic spoke with members of the Ottawa business community that are familiar with the project and has reported that the planned division of the costs had Melnyk & the Sens paying for the new arena plus $150m towards infrastructure with Ruddy and Trinity covering most of the remaining $4B, and that there is “healthy skepticism” among the Ottawa business community about Melnyk being able to do that.

As part of their coverage of the issue, the Ottawa Citizen spoke with three unnamed sources with direct knowledge of the negotiations, all of whom pointed the finger at Melnyk as the road block. All three indicated that Melnyk has been trying to avoid paying for the arena. Two of them said that Ruddy has signed off on the corporate governance agreement but Melnyk hasn’t.

The Citizen also reached out to DCDLS for a comment - “We’ll see what happens. Stay tuned.”

Update, Nov 23rd, 1:41pm:

According to a new piece of reporting by the Ottawa Citizen, Capital Sports Management has filed a lawsuit against Trinity Developments and John Ruddy for $700 million over the “failed joint venture” of the LeBreton Flats development. The statement of claim states that the issue is a conflict of interest on the part of Trinity and John Ruddy, due to their plans to develop a 65-story mixed-use building complex at 900 Albert St, directly across the street from LeBreton Flats.

It’s worth noting the use of “failed” here, past tense, and with such a significant lawsuit between the primary partners, it is difficult to see the RendezVous LeBreton Group moving forward.

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