City solicitor urges appeal of $2.24M award to soccer dome firm
Arbitrator says city should have done more to find a new home for former Lansdowne soccer dome
By Joanne Laucius, OTTAWA CITIZEN February 9, 2014
OTTAWA — The City of Ottawa’s solicitor is urging an appeal of an arbitrator’s $2.24-million award to a company that ran a domed soccer stadium moved out of Lansdowne Park to make way for redevelopment.
A 157-page arbitration concluded that The Coliseum Inc. is entitled to $2.24 million out of a $6.5-million claim it made after it left Lansdowne but failed to come to an agreement with the city about a new location. At issue was the extent of the city’s obligation to find a suitable new location within 10 kilometres of Lansdowne.
In a memo to Mayor Jim Watson and city councillors, city clerk and solicitor Rick O’Connor said that when he received the arbitration, he asked that a review be undertaken to determine whether there were any grounds to have it set aside.
The ruling is “unusually long, somewhat repetitive, and at times, difficult to follow,” said O’Connor in the memo.
“While that comprehensive review continues, the preliminary conclusion is that the decision contains serious errors in law which constitute grounds for appeal. These errors include the arbitrator’s determination of the city’s liability, the proper calculation of damages and Coliseum’s obligation to mitigate its damages, among others.”
The arbitration is the latest chapter in a deteriorating relationship between the city and Coliseum that goes back to November 2010, when the city issued a notice of termination to Coliseum to allow the city to work on the redevelopment of Lansdowne Park.
Coliseum Inc., owned by businessmen Ian Martin and Marty Lauter, had a 10-year agreement with the city that began in 2000.
When development plans were delayed at Lansdowne in 2011, Coliseum was allowed to remain for another year, with the termination to take effect in 2012.
But agreeing to a new home for the dome was difficult.
The city offered Coliseum a site at Ledbury Park, but Coliseum declined because soccer teams and clubs were concerned about the area’s reputation for gangs and crime.
A three-way deal with the city and the University of Ottawa to relocate the dome to a synthetic turf field on Lees Avenue later collapsed in the fall of 2012 as the winter season approached.
Coliseum claimed there were ripples on the field and the deal wasn’t signed because of a number of delays and conditions. In November 2012, three days before the dome was scheduled to go up, Martin and Lauter said they were told the field wasn’t ready.
Coliseum walked away from the deal and decided to take the dispute to arbitration, seeking $6.5 million from the city to recoup its losses. Meanwhile, the season was cancelled for thousands of players.
The university has since acquired its own dome, which has been in operation this winter.
The arbitration took place over 11 days in September and the decision was released Wednesday.
The city argued that it had fully complied with its obligation to identify a suitable location. Although the agreement between the city and Coliseum made it clear that an alternative site was to be available within a 10 kilometres of Lansdowne Park, the parties did not agree on the extent of the city’s obligations regarding the site’s state of development.
In his memo to council, O’Connor said the arbitrator took “something of a midpoint on the issue.”
The city’s offer of Ledbury Park met part of its obligations, but failed to properly put forward improvements to ensure that it was appropriate for Coliseum’s operations.
The arbitrator found that the city was liable for damages amounting to three years instead of the six years Coliseum argued it should receive, said O’Connor.
The award also acknowledged that Coliseum was not entitled to recover any damages for a three-year contract extension that was not finalized by the parties.
Although the dome was not in use over the winter of 2012-2013, Coliseum later came to an agreement with the RA Centre to install it on Riverside Drive, where it has been in operation this winter, said O’Connor.
“It is noteworthy that the arbitrator did not accept this as a factor warranting a reduction in Coliseum’s damages.”
He added that the arbitrator believes the city could have done more with respect to relocating the dome on an unused portion of Ben Franklin Park and been more direct in its dealings with Coliseum about the potential for redeveloping Ledbury Park.
O’Connor said he was surprised to see that the arbitrator did not believe Coliseum’s walking away from the U of O deal was relevant to the city’s defence.
The arbitrator also identified some differences in interpretation of the city’s contractual obligations between the city’s legal services department and its real estate partnership development office. O’Connor said he will be directing all city lawyers to bring these differences in interpretation to his personal attention.
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