NCC flattens LeBreton deal — Ottawa Senators-backed bid booted as runner-up waits in wings
Jon Willing, Ottawa Citizen
Updated: December 20, 2018
Kiss RendezVous LeBreton Group goodbye.
After days of virtual open warfare between the two business moguls who lead the group that vowed to bring hockey and redevelopment to LeBreton Flats, the National Capital Commission has pulled the plug on its dysfunctional development partner.
The NCC announced Wednesday it is cutting loose RendezVous LeBreton after Eugene Melnyk of the Ottawa Senators and John Ruddy of Trinity Developments, sued each other over the demise of their consortium.
“The NCC board of directors has resolved to terminate the preferred proponent term sheet, which was signed January 19, 2018, between RendezVous LeBreton Group and the NCC,” the federal agency said in a written statement. “Termination is effective 30 days following the issuance of the notice to this effect.”
And with that, the prospect of an imminent move by the Senators to a downtown arena — something once touted as essential to the club’s fate — has seemingly vanished, and the future of a long-languishing swath of prime real-estate in the nation’s capital is once again up in the air.
The Senators issued a statement Wednesday expressing “regret” at the NCC’s decision.
“For over a year, we have tried to resolve our concerns about the flaws in the economic model for the redevelopment, both within the context of our private negotiations with the NCC and then publicly since Nov. 22, 2018,” the team said.
It said it was dismayed when the NCC declined to meet with the parties to try to resolve the “challenges” after the Crown corporation had publicly acknowledged the problems within RendezVous last month and initially given the group until January to sort them out.
“Despite our best efforts to resolve the impasse as late as yesterday, we were unsuccessful in bringing our vision to fruition,” the Senators said.
Ruddy’s Trinity Developments said it would not be commenting Wednesday.
Scrapping the term sheet will allow the NCC board to make a decision about moving forward at its meeting in January, the agency said.
Wednesday’s announcement by the NCC was hardly a surprise after the ugly legal battle between Melnyk and Ruddy became public in recent days, but it still strikes a blow to Ottawa residents and Senators fans.
Much of LeBreton Flats has remained an undeveloped eyesore for five decades, and has become a symbol of dashed dreams in Ottawa. Plans for a vibrant redevelopment anchored by a hockey arena seemed to finally spell the end of that history of failure on LeBreton. Until now.
The failure of the development to move forward also raises questions about the future of the Senators who have faced attendance issues in recent years and for whom a downtown arena represented new possibilities.
What comes next?
While one option for the NCC is to restart a competition to redevelop LeBreton Flats, there is at least one interested party that insists that shouldn’t be necessary.
A local developer whose company was part of the second-place consortium seeking to develop LeBreton said there’s a united group of businesspeople ready to put shovels in the ground.
“We spent over $3 million on that bid and two years of our energy and we’ve assembled a great group of Canadians. It was all about celebrating Canada,” said Jean-Pierre Poulin, president of Gatineau-based Devcore Group. “What would the NCC gain about doing another process? Who doesn’t want to partner with Guy Laliberté, Jim Pattison and André Desmarias?”
Those three men are behind Cirque du Soleil, Ripley Entertainment and Power Corp, respectively. JDS Uniphase co-founder Bill Sinclair is also involved with the Devcore Canderel DLS bid group.
DCDLS has reached out to the NCC about where the consortium stands, particularly in light of the RendezVous LeBreton Group rupture, but DCDLS hadn’t heard back earlier Wednesday.
The NCC’s procurement process for the redevelopment of the part of LeBreton Flats west of Booth Street has been happening since 2014. The agency named RendezVous preferred proponent in 2016 in a battle between two development groups.
Poulin said that while the DCDLS proposal also included an arena, the group’s real focus is on the other aspects of its mixed-use vision, such as rental units, a seniors residence, a hotel and an aquarium. The arena in the blueprint is a placeholder, he said.
“We’re not talking much about hockey,” Poulin said.
Poulin said it would be nice to get a courtesy call from the NCC, since DCDLS believes it has a legitimate place in the procurement process.
“We believe the NCC should respect the process that is established now. We believe that the NCC will make the right decision on that process,” Poulin said.
The NCC board is still scheduled to meet in late January, even though incoming CEO Tobi Nussbaum begins his term on Feb. 4, replacing Mark Kristmanson. The agency will have to decide if it wants to tie Nussbaum’s hands with any decision made at the board meeting before he gets to weigh in.
“The NCC will proceed with next steps, in consultation with the fairness monitor and key stakeholders, at its meeting of the board in January. No delay is foreseen as a result of the transition,” NCC spokesman Mario Tremblay said.
Poulin said DCDLS group sent a letter to Nussbaum to congratulate him on the new gig.
“I don’t know him personally. We wish him well,” Poulin said. “Of course, he comes in at a difficult time.”
Mayor Jim Watson, who was at the National Arts Centre on Wednesday to help introduce the architects for the super library on the eastern part of LeBreton Flats, said the NCC will need to seriously consider restarting the entire procurement process. The NCC’s lawyers will need to weigh in, he said.
“I think that’s one of the realistic options that we have to look at,” Watson said.
“Some people will groan about that, but I think the fair thing to do is to allow others to come in and bid.”
Watson noted that going with DCDLS is another option but he would want to know from lawyers if the NCC could go with the runner-up, without risk of being sued by the RendezVous partners.
It’s not going to be easy to make big decisions in 2019, especially starting at mid-year, since the next federal election is scheduled for October.
Watson said if the LeBreton process went as previously expected, all the municipal planning work would have been done in January and February 2019 and the full proposal would be in front of the federal cabinet in June.
“After June it becomes very difficult to get anything at the federal cabinet because we’re in election mode,” Watson said. “With the setback we’ve had with the (RendezVous) partners suing one another, it’s unlikely that we’re going to have an arrangement of some kind before June.”
Environment Minister Catherine McKenna, the MP for Ottawa Centre, where LeBreton Flats is located, noted the big job ahead for the NCC is considering the “dysfunctional partnership” at RendezVous and a need to establish a path forward for the redevelopment.
McKenna, who was also at the library event at the NAC, said there’s no point rushing a project that will leave a legacy for the city.
“My biggest priority is to get this right,” McKenna said. “I think it’s a very unfortunate situation we’re in, but that’s where we’re at and I think we now need to figure out our options, whether there’s the other bidder, if that’s a possibility or not, and I think lawyers are involved with this, but we need to step back and just make sure we’re getting it right. We do not want to be rushed into something that we aren’t going to be proud of.”
Joel Harden, the NDP MPP for Ottawa Centre, said the city should focus on providing more affordable housing if RendezVous can’t deliver.
“The Melnyk-Ruddy debacle is what happens when development serves the few instead of the many,” Harden said in a written statement sent by his office. “We need to build more affordable housing, including at LeBreton Flats. If feuding millionaires can’t make that happen, the city should.”
TIMELINE OF DOOMED LEBRETON DREAM
Sept. 30, 2014: The National Capital Commission launches a process to find a development partner for 9.3 acres of LeBreton Flats, asking for “an architecturally stunning anchor institution of regional, national or international importance.” The creativity, said NCC CEO Mark Kristmanson, would come from the private sector.
Jan. 26, 2016: The public gets to see details of the two bids that will compete to develop LeBreton Flats, RendezVous LeBreton and Devcore Canderel DLS Group. Both proposals include hockey arenas and significant residential development. Both are also connected with billionaires — Melnyk with RendezVous LeBreton and Quebec billionaires André Desmarais and Cirque du Soleil founder Guy Laliberté with the Devcore Canderel DLS Group.
April 29, 2016: RendezVous LeBreton’s $3.5-billion bid to develop LeBreton Flats get the green light. Senators management muses about opening night at the new downtown arena in 2021.
Nov. 25, 2016: The NCC begins formal negotiations for a development agreement with RendezVous LeBreton.
Jan. 26, 2018: The NCC and RendezVous LeBreton reach an agreement in principle to develop the Flats.
April 20, 2018: In an early sign of trouble, Ottawa Mayor Jim Watson asks publicly whether Eugene Melnyk is serious about the LeBreton redevelopment project after the Senators owner says he is concerned about the amount of development around the site and muses about keeping the team in Kanata.
Nov. 23, 2018: After weeks of rumours, the NCC reveals that RendezVous LeBreton partners Eugene Melnyk and John Ruddy, Trinity Developments head, have been unable to reach an agreement on their own business partnership. The NCC tells them to get their act together by January.
Nov. 24, 2018: The split between the partners breaks into the open as Melnyk sues Ruddy for $700 million, accusing him of destroying their joint venture with plans for a major condo development at 900 Albert St. and keeping Melnyk in the dark about expansion plans. Ruddy denied the claims.
Dec. 18, 2018: The implosion of the RendezVous LeBreton development seems certain when Ruddy slaps Melnyk with a $1-billion countersuit claiming the hockey magnet’s company is on shaky financial ground, among other things. Melnyk, meanwhile, says Trinity can build the entire project and pocket the revenue as long as the Senators can run the arena, an idea batted down by Ruddy.
Dec. 19, 2018: With a succinct press release delivered late in the day, the NCC pulls the plug on the troubled RendezVous LeBreton project. “The NCC 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.”
with files from Elizabeth Payne
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