Rendez-Vous LeBreton Dead in Wake of $1B Counter-Suit
A day after John Ruddy and Trinity file their counter-suit, the NCC has terminated their deal with the crumbling partnership
It’s the move we’ve all been expecting since Eugene Melnyk and Capital Sports Managment sued John Ruddy and Trinity Developments over their LeBreton Flats partnership nearly a month ago - Ruddy and Trinity have filed their counter-suit over the issue for $1 billion.
This is the first time we have seen Ruddy and Trinity’s side of the story. Until now we’ve only had a full story from Melnyk’s side of things, and then a few comments from the mayor, the NCC and a few off-the-record individuals.
Right off the top regarding the conflict of interest accusation, the counter-suit claims that CSMI, Melnyk and other executives (including then-CEO Cyril Leeder) knew about the detailed plans for 900 Albert from the start of the partnership, and that those details did not change after the Rendez-Vous LeBreton agreement was signed between the two.
The counter-suit also makes several accusations regarding the arena portion of the development - that Melnyk and CSMI wanted the City or Trinity to pay for it, provide it to the Senators for 30 years rent-free, and for CSMI to own the naming rights. The suit also accuses Melnyk and CSMI of wanting an “unreasonable degree of control” over the full LeBreton project.
Trinity further accuses CSMI of “neglecting or evading” their financial obligations, going so far as to include the statement “It is fair to infer that CSMI is not financially sound.”
While a number of the accusations leveled at Melnyk and CSMI in this counter-suit appear to go hand-in-hand with some of the other comments and rumours already out there, it is worth remembering that they have yet to be proven in court.
Update, Dec 18th, 4:57 pm:
The Senators have released a statement in response to the counter-suit, which proposes a solution that they hope will move things forward:
The Ottawa Senators group has responded to the $1 B counter lawsuit from Trinity Developments.
— Ian Mendes (@ian_mendes) December 18, 2018
They are proposing a solution where the downtown arena is built on time and under the current framework.
Here is the official response: pic.twitter.com/BQwL5i7W6K
It appears that with this proposal, Melnyk and CSMI are willing to walk away from everything outside of the arena entirely, putting the entirety of both the cost and profit on Trinity.
For the arena itself, Trinity would build and pay for it, though it would still be designed by CSMI. CSMI would then lease the arena, and take over the operating and maintenance costs of it during the course of the lease.
Some points that are unclear:
- If the Sens would also assume all of the arena profits during their lease (ie: concerts), or just from Senators related events
- Who would retain the naming rights
- If the lease is rent-free, beyond covering the operating and maintenance costs
- What happens with the separate proposed facility that would have worked as a practice rink for the team/
Not only would this proposal have to be accepted by Trinity, but such a change in the framework of the partnership may also require NCC approval to move forward.
Update, Dec 18th, 6:00 pm:
Trinity is having none of it, with a response that can basically be summed up as “See, told ya”.
And Trinity’s response to the Sens proposal pretty much kills the idea of a joint arena venture. pic.twitter.com/GsocvOEWP7
— Ian Mendes (@ian_mendes) December 18, 2018
Update, Dec 20th, 8:53 am:
The NCC has decided to pull the plug on the Rendez-Vous LeBreton bid.
#LeBretonFlats update: The Board of Directors has resolved to terminate the preferred proponent term sheet between Rendez-Vous #LeBreton Group & the NCC.
— National Capital Commission (@NCC_CCN) December 19, 2018
More details: https://t.co/wKMoDvI2s6 pic.twitter.com/wMRkvbwNf4
Their statement late yesterday acts as 30 days notice of the deal being terminated, allowing the NCC to move forward with whatever they’re going to do replace it during their next public board meeting in late January. At this point it’s not clear what they will do. DCDLS apparently remains interested, and has reached out to the NCC to determine where they stand. There have been comments from NCC board members though, indicating that simply switching to the second place bid may not be possible at this point and a new bidding process - full, or a scaled back one - might be required.
While this does not completely eliminate the long term possibility of the Senators moving downtown - the team could attempt to forge a new partnership, work out a deal to be a tenant, or end up being sold to someone else involved with whatever plan replaces the current one - it does officially mark the end of the current plan for a new rink.
