LeBreton Flats 2.0 (RendezVous LeBreton) | Cancelled

[ars]

Internal strife with a partnership Melnyk is involved in? Colour me shocked
/s

On the flipside, no arena deal might mean that we get rid of Melnyk sooner rather than later.

[JHikka]

Originally Posted by ars

Internal strife with a partnership Melnyk is involved in? Colour me shocked
/s

On the flipside, no arena deal might mean that we get rid of Melnyk sooner rather than later.

Bettman has stated before that a downtown arena plays a vital role in the Sens moving forward. If Melnyk can't provide that then I assume the NHL starts moving things along to make sure it happens without Melnyk.

[roger1818]

I hope Ruddy and Melnyk can resolve their differences and get on with the project, but I am glad the NCC has put their foot down and giving RendezVous LeBreton two months to figure it out or else give them the boot. I would like to see construction start sooner than later, but sometimes you need to cut your loses and move on.

[OTSkyline]

So basically it's been exactly 2 years of "closed-door negotiations" that lead us to... nowhere (at least yet). Like c'mon...

If they can't make it work and fully commit by Jan deadline, the NCC should hand over the project to the other team DEVCOR, which would hopefully make a few adjustments to their proposal and then Melnyk can just buy/lease or be part of the ARENA part of the proposal, that's it. He can't handle the whole project.

[Norman Bates]

#MelnykOut

[Vixx]

Yeah I gotta say I'm happy the NCC gave them a strict deadline saying "get your shit together or we're proceeding to sell this to another developer".

Seems like the past two years has lead to pretty much nowhere. Melnyk needs to drop his ego here and actually think about the long term potential impact of this project. I'm still a believer that, if this project see's the light of day, Melnyk will only then sell the team and wipe his hands clean with a nice profit. He's looking at personal gain and doesn't really care about the impact of the team or city.

[Vixx]

There's speculation now that Melnyk may pull out of Lebreton completely.......

[Jamaican-Phoenix]

This dude needs to leave Ottawa.

[rocketphish]

After four years of work, LeBreton NHL plan veers toward ditch

Kelly Egan, Ottawa Citizen
Updated: November 22, 2018

Thursday was a dismal day for the National Capital Commission, the mayor, Eugene Melnyk, the Ottawa Senators — the city, even.

We found failure on the Flats one more time. It is to weep.

At a meeting of NCC directors, it was apparent the $4-billion plan to finally bring life to LeBreton is hanging by a thread, needing a miracle to rescue it by a January deadline.

The board was told that unresolved partnership issues between the two main players — Melnyk, the owner of the Senators and John Ruddy, the executive chairman of Trinity Development Group Inc. — have stopped the approval process at the 11th hour, only months before shovels were to hit the ground on the city’s generations-old wasteland.

In truth, the meeting publicly exposed a story whispered about privately for months — that Melnyk and Ruddy have a strained working relationship, a potentially fatal flaw for a partnership expected to roll out a massive amount of building, including an NHL arena, 4,000 housing units and a whack of retail and associated uses.

Mayor Jim Watson, who sits on the NCC board, was asked about his view of the relationship, which he has viewed first-hand in private meetings.

“Well, ah, let’s put it this way,” the normally unflappable mayor began, tapping his fingers on the side of the podium, as though morse-coding the message to his mind.

“It has been a challenging relationship that I have witnessed and my hope is that they come together, get their act together,” in such a way that they don’t need “constant mediating.”

(Neither man was present: Ruddy in Edmonton for the Grey Cup, Melnyk represented by a media-relations official feverishly working his phone.)

We were left to guess at “unresolved issues” between the pair. We shall only say that our personal suspicion does not immediately fall on Ruddy, a widely liked developer and philanthropist who has produced $7 billion in new construction in the last 30 years. He’s a builder. It’s what he does. There are no billboards urging him to get out of town.

“As a lifelong resident of Ottawa, I remain committed to the redevelopment of LeBreton Flats, the cleanup of the site in the shadow of the Peace Tower, the revitalized downtown core of the nation’s capital, and a new smart-growth community where people can live, work and play,” he said in a prepared statement.

Melnyk, meanwhile, said a statement: “We’ve championed a downtown sports and entertainment arena, and this important civic project, since initiating our proposal in 2014. We continue to be committed to making our vision a reality.”

There is speculation this could be a case of brinkmanship by Melnyk, to secure a better deal at the last minute. But the language Thursday suggests eight weeks is not going to fix what four years could not.

NCC CEO Mark Kristmanson could not hide his frustration while detailing how much effort the NCC has made to bring the parties together: meetings in June, meetings in the fall, warnings about a Nov. 1 deadline, regularly looping in Watson and NHL commissioner Gary Bettman.

“There has been a changing cast of characters in this project, from the beginning,” said Kristmanson, and his reference to “cast of characters” did not sound complimentary. “We started out dealing with (ex-Sens president) Cyril Leeder, for example, who we admire and was a great leader, then we move on to Tom Anselmi, then dealing with Mr. Melnyk, then Mr. Ruddy and his team.”

We heard, too, from board member Aditya Jha, an entrepreneur with computer science training, a business background and a flair for the metaphor.

Even four years ago, when the competing LeBreton bids were made public, Jha said a question occurred to him about the Melnyk-Ruddy team: “Immediately the question came to my mind, these are two people. If they win, can they stay together? Because I have seen that the biggest problems in businesses are partnerships. Will they be able to execute?”

He said the board was first given a private briefing on the status of LeBreton, after which he made a comparison to a much-loved child who wants to be an athlete but only has one leg and one eye. “I know for sure this child is not winning the race.”

There was a good deal of back-patting by the NCC about the job it has done to get things this far. We should hold our applause.

First of all, this process has taken way too long. We were looking at design proposals in 2015. The Melnyk-Ruddy group was chosen as the preferred candidate in April 2016. It’s now almost three years later. How do you sustain momentum?

But the bottom line: the public will judge the NCC’s effort by results, not by some slick flowchart. If this goes in the ditch in January, we’re nowhere. Nobody cares about your exquisite “process” to produce something that didn’t work.

Christmas is coming. Oh for the miracle on Fleet Street.

To contact Kelly Egan, please call 613-726-5896 or email kegan@postmedia.com
Twitter.com/kellyegancolumn

https://ottawacitizen.com/news/local...s-toward-ditch

[rocketphish]

UPDATED: LeBreton Flats plan in jeopardy after 'unresolved issues' between Melnyk and Ruddy

Jon Willing, Ottawa Citizen
Updated: November 22, 2018

The historic redevelopment of LeBreton Flats, and the future of the Ottawa Senators’ plans to move downtown, are in jeopardy because the two businessmen at the helm of RendezVous LeBreton Group can’t figure out how manage their partnership, leaving the National Capital Commission board of directors with an option to blow up the entire process.

The gut-shot was delivered by NCC staff in a public meeting of the board Thursday, although board members had received the news in a more meaty presentation behind closed doors a day earlier.

NCC CEO Mark Kristmanson said RendezVous is having a problem sorting out its own corporate governance, which was expected to be finalized on Nov. 1 so the board could get some rosy news on the project this week.

However, the two major partners of RendezVous — Senators owner Eugene Melnyk and Trinity Developments executive chairman John Ruddy — apparently can’t come to an agreement on their own business partnership. They let the NCC know they still didn’t have a corporate governance structure, prompting the NCC board on Thursday to vote unanimously in favour leaving the door open to start a new process to redevelop LeBreton Flats.

The next board meeting in January will be the make-or-break moment in the NCC’s deal with RendezVous.

It’s not entirely clear what the problem is at RendezVous and what’s preventing the consortium from establishing a governance structure.

Ruddy provided a written statement, saying, “As a lifelong resident I remain committed to the redevelopment of LeBreton Flats, the cleanup of this site in the shadow of the Peace Tower, the revitalized downtown core of the nation’s capital, and a new smart-growth community where people can live, work and play.”

In a separate written statement, Melnyk said, “We’ve championed a downtown sports and entertainment arena, and this important civic project, since initiating our proposal in 2014. We continue to be committed to making our vision a reality.”

Behind the scenes, three sources with direct knowledge of the negotiations characterized the major roadblock as Melnyk, whose bargaining tactics have bedevilled government reps and those inside RendezVous who have been involved in the talks. No one is quite sure what Melnyk’s end-game is on LeBreton Flats, they said.

The sources, who didn’t want to be identified because they aren’t authorized to speak publicly about the negotiations, said Melnyk has been trying to avoid paying for the arena.

“The expectations were spectacularly unrealistic,” one source said.

Two sources said Ruddy has signed the corporate governance agreement, but not Melnyk.

The Senators declined to comment on the specific characterizations from sources.

“Throughout this process, we have respected the terms and conditions set out in our agreement with our partner. We will continue to do so and therefore, we will not be commenting on misleading and unattributed speculation that does not move the process forward in a constructive manner,” said Senators chief operating officer Nicolas Ruszkowski.

Mayor Jim Watson, a non-voting member of the NCC board, called Thursday’s news a “setback and it’s a disappointment.”

“They have to get their act together, plain and simple,” Watson said of RendezVous after the NCC meeting. “Otherwise, I think we’re going to have to move on in January.”

The Senators and Trinity can regroup or reorganize and even bring in new partners under the NCC’s process, but they have to agree to take a course of action.

Watson has sat in at least one meeting with Melnyk and Ruddy on the topic of LeBreton Flats. It happened last August in the mayor’s boardroom, with Ruddy on one side of Watson and Melnyk on the other.

On Thursday, Watson was asked about his impression of the relationship between Melnyk on Ruddy.

The mayor said: “Let’s put it this way: It has been a challenging relationship that I have witnessed, and my hope is that they come together, get their act together and bring forward a corporate governance structure that makes sense and that is workable and is implementable so we can break ground on this project and not be constantly mediating between the two partners.”

The work to change the municipal land-use rules for the property has ground to a halt at city hall.

“We’re not going to go and get the public engaged in a zoning and an official plan consultation until we know exactly if this project is going to move forward,” Watson said.

Watson said the NCC and the city need to have assurances that RendezVous will survive over the long term.

“We need to see solid evidence that they have their act together, that it’s an amicable relationship, because we cannot have a dysfunctional partnership to construct and build this site over the next 10-20 years. It has to be workable,” Watson said.

Last January, the NCC announced it had reached an agreement in principle with RendezVous. It was a major milestone that was supposed to lead to a master development agreement.

There was a Nov. 1 cutoff for RendezVous to sort out its own governance. The consortium asked for an extra week.

“And then, on Nov. 8, they each communicated that they couldn’t reach a resolution, so we’ve come because we feel it’s in the public interest that this matter be known,” Kristmanson said.

The NCC, which has been accused in the past of dragging its heels on LeBreton Flats, emphasized all the work it’s done to advance the project. The agency has four internal teams working on the project. Staff now know the state of soil contamination, the requirements for utilities, the impact of the Confederation Line LRT and have made big leaps in their discussions with the Algonquin community.

RendezVous beat a bid from Devcore Canderel DLS Group (DCDLS) for the development rights, but DCDLS was officially put out of the picture last January.

Asked if DCDLS is in the picture again, Devcore’s JP Poulin responded by email, “We’ll see what happens. Stay tuned.”

RendezVous has wanted to build an 18,000-seat NHL arena surrounded by a mixed-use community of multi-residential and commercial building. A Sensplex and an abilities centre are also included in RendezVous’ plans.

“If it turns out this group can’t do it, we’re going to move on to a new solution and new ideas for how to bring this very important area back to life as a community in the capital,” Kristmanson said.

What a new process would look like — another high-profile design competition a scaled-down request for proposals, or simply calling up DCDLS — hasn’t been determined.

jwilling@postmedia.com
twitter.com/JonathanWilling

https://ottawacitizen.com/news/local...ncc-board-told

[lrt's friend]

This will be a massive loss for the city, if this results in a downtown arena not being built. It will also be a massive loss for the stability of the Sens franchise.

[rocketphish]

What could be the issues between Melnyk and Ruddy?

James Bagnall, Ottawa Citizen
Updated: November 22, 2018

You can’t say we weren’t warned. Ottawa Senators owner Eugene Melnyk openly mused last summer about the risks in the $4-billion project to remake LeBreton Flats. His job was to finance the construction of a new $600-million arena — the centrepiece of the bid known as RendezVous LeBreton.

Melnyk’s partner, John Ruddy, is the founder and executive chairman of Trinity Developments, responsible for building the condominiums that would bring humanity onto the Flats.

Yet, oddly, it was Melnyk who commissioned some real-estate studies. His goal was to determine whether Ruddy’s plans to add thousands of condominiums just outside LeBreton Flats would undercut the economics of the RendezVous LeBreton project. A suggestion of tension between partners if ever there was one.

The NCC on Thursday gave Ruddy and Melnyk until January to sort out their differences.

The precise sticking point isn’t clear, but we can try to discern its nature.

In a project this size, multiple streams of future revenue pay for the upfront cost of the sporting facilities, condominiums, retail stores and public spaces.

An official familiar with the structure of the bid notes it’s similar to the $614-million deal that led to the construction of an arena and other facilities in downtown Edmonton. Oilers’ owner Daryl Katz committed to paying $132.5 million to cover part of the costs of building the arena. The city kicked in $226 million and there was a special nine per cent tax on tickets to raise $125 million. The construction of a pedestrian corridor and light rail transit station accounted for some of the other costs related to the wider project.

The City of Ottawa, of course, is not subsidizing RendezVous LeBreton — hence, the importance of building condominiums, whose buyers will offset construction costs and contribute ongoing fees.

Is Melnyk looking to extract money from the housing side of the project as well as the arena portion? Perhaps. But it seems more likely his concern was that any new arena be surrounded by a lively community of residents served by a generous supply of retail outlets. In Edmonton, the Oilers retained the right to develop the area around the arena for offices, hotels and retail stores — all of which would contribute additional streams of revenue for the team.

Any number of detailed negotiations between Melnyk and Ruddy might have produced an impasse. Two factors, in particular, may have exacerbated things.

First, recall the timing. The Ottawa Senators and Trinity prepared their bid when Melnyk was recovering from his May 2015 liver transplant. It wasn’t until March 2016 that Melnyk declared he had “a clean bill of health.” By then, the NCC had nearly finished the evaluation of the bids. In April that year, it ruled in favour of RendezVous LeBreton, thereby knocking out its only rival, Canadensis — a Montreal-heavy team led by Devcore and Canderel.

During this period, the lion’s share of the work on the Senators’ portion of the bid was handled by president Cyril Leeder (who Melnyk pushed out in early 2017) and Geoff Publow, the team’s long-serving vice-president of strategic development. (Leeder and Publow did not return calls.)

Sources say that when Melnyk’s health improved, he began pushing for better terms within the RendezVous LeBreton partnership.

Some of the tougher negotiating stance may have been stimulated by money considerations. While Melnyk got an exceptionally good deal when he acquired the Senators and their Kanata arena in August 2003 for $127.5 million, they have not been able to generate consistent profits. Indeed, this can be seen in the debt that has accumulated.

Earlier this summer, Melnyk revealed the parent company of the Senators and the arena had concluded a $135-million financing from a syndicate of banks, which allowed him to pay off debt that had been held by Highbridge Principal Strategies of New York. Last month, the Senators said they had negotiated a $20-million credit line with Bank of Montreal. All of this is on top of a $100-million US ($140-million Cdn) line of credit provided by the NHL in 2015.

Melnyk does benefit, that said, from the rising value of the team and arena, which Forbes Magazine estimated last year was worth an estimated $400 million US ($570 million Cdn). Depending on how much of the NHL credit line Melnyk has drawn down, nearly half of the value of the Senators and arena could be offset by debt. (Senators chief operating office Nicolas Ruszkowski declined to comment.)

Which naturally makes Melnyk cautious in his negotiations.

On Thursday, Melnyk signalled that he’s still in this thing.

“We’ve championed a downtown sports and entertainment arena, and this important civic project, since initiating our proposal in 2014,” he said in a statement. “We continue to be committed to making our vision a reality.”

The question is whether commitment alone is enough to get this done by January.

https://ottawacitizen.com/news/local...lnyk-and-ruddy

[acottawa]

I blame the NCC for most of this. The idea that private investors would spend hundreds of millions in amenities in exchange for the right to purchase or lease tens of millions of contaminated land is nonsensical. The fact that they only got two bidders should have been a clue that there was a problem with this approach. The fact that neither had a viable business model should have further tipped them off. This might work in Vancouver where a developer could build 30 towers over a 10 year period. It does not and will not work in Ottawa.

[CityTech]

The NCC should have offered the land up for free. That's really the only way the math works for any substantial non-market development like this one.

[FutureWickedCity]

The whole NCC "process" was a sham. Everyone knew that whoever owns the Sens was going to get the bid, no matter how bland and generic their proposal was.

[roger1818]

Originally Posted by acottawa

I blame the NCC for most of this. The idea that private investors would spend hundreds of millions in amenities in exchange for the right to purchase or lease tens of millions of contaminated land is nonsensical. The fact that they only got two bidders should have been a clue that there was a problem with this approach. The fact that neither had a viable business model should have further tipped them off. This might work in Vancouver where a developer could build 30 towers over a 10 year period. It does not and will not work in Ottawa.

I also blame the city to some extent. Having a major sports and entertainment facility so close to downtown and on a major transit line adds value to the city as a whole, but rather than invest money in the project, they seem more concerned about what the future maintenance costs of the development will be. I am not saying it should be fully paid for by the city, or even the approx. 45% paid by Edmonton for their arena (plus tax revenue), but they should be at the table with their wallets in hand.

[Kitchissippi]

Originally Posted by roger1818

I also blame the city to some extent. Having a major sports and entertainment facility so close to downtown and on a major transit line adds value to the city as a whole, but rather than invest money in the project, they seem more concerned about what the future maintenance costs of the development will be. I am not saying it should be fully paid for by the city, or even the approx. 45% paid by Edmonton for their arena (plus tax revenue), but they should be at the table with their wallets in hand.

Um, "their wallets" are actually our wallets. No way would I want to facilitate billionaires to make more money skimming mine. We're already giving them access to a multi-billion dollar transit line that adds exponential value to the land, which hasn't even been factored into the equation.

[YOWflier]

I also agree that the land should have been offered for free with certain high level conditions/ considerations that must be met.

Do not mistake that opinion as an apology for Melnyk. He's a douche of the highest order and this may hopefully spell the end of him. In that sense the news may be wonderful.

[Kitchissippi]

Free land isn't going to solve RVL's private partnership problems. It wasn't even the issue, so why even offer it?

[acottawa]

Originally Posted by Kitchissippi

Um, "their wallets" are actually our wallets. No way would I want to facilitate billionaires to make more money skimming mine. We're already giving them access to a multi-billion dollar transit line that adds exponential value to the land, which hasn't even been factored into the equation.

We just gave hundreds of millions to the billionaires who own the red blacks, and there is way more economic spinoff from a hockey team than a football team.

I’m not thrilled about it either, but any amenity is going to cost the taxpayers money.