Ottawa Senators owner Eugene Melnyk was counter-sued by his business partner this week as the plans for a downtown arena continue to deteriorate.
But according to Sportsnet’s Elliotte Friedman, the NHL is still set on keeping the team in the nation’s capital long-term.
“When an owner gets sued for a $1 billion you’d think the league is going to weigh in somewhere, but no. And that’s because I believe they think they’ve got a lot of options to have this sort out,” Friedman said on Saturday Headlines.
With the arena issues currently stalled, questions about the team’s long-term future in Ottawa are starting to pop up. According to Friedman, commissioner Gary Bettman believes a new downtown arena is in the best interest for the club.
“The commissioner reminded the city sometime in the fall of the importance of the downtown arena, how much he believed it was important to the future of the Senators and how critical that would be to get, and I think they understand the message,” Friedman said. “The problem is, just like the city didn’t want it in the middle of their election (in 2018), the federal government, which is coming into their own election, they’re not going to want it either. So we’re about a year away probably at least until this is put back into the front burner and that’s just not good for anyone.”
The Senators entered a partnership with developer John Ruddy and his company, Trinity Developments, to build a $4-billion arena development on a prime piece of land known as LeBreton Flats in downtown Ottawa. In Jan. 2018, the National Capital Commission (NCC), a federal body that manages government property including LeBreton Flats, agreed in principal to sell the land to Melnyk and Ruddy’s RendezVous LeBreton group.
But the two sides of RendezVous had trouble agreeing on things from the start and in November, the NCC warned them that the sale could fall apart if the two didn’t result their issues.
In late November, Melnyk filed a lawsuit against Ruddy for $700 million. In the suit, Melnyk alleges the developer has a conflict of interest with another development near LeBreton that the Senators owner sees as direct competition to the arena project.
On Tuesday, Ruddy counterclaimed Melnyk for $1 billion, alleging the Senators ownership has been evading its financial responsibility and wanted to rent the arena for free.
Neither claim has been tested in court.
As this turmoil continues, the Senators will likely be forced to remain in their current home in Kanata, Ont., 25 kilometres southwest of the capital, for the next four-to-five years. According to Friedman, the delay will turn the spotlight on Melnyk and whether he will want to sell the team.
“We know that Eugene Melnyk loves owning the Ottawa Senators and we know that he has said many times that he’s not going to sell the Ottawa Senators,” Friedman said. “We also know that at a board of governors meeting this year, there was a sale brought up but it was not at a number that the NHL thought was even remotely acceptable. The maximum that it was, was $400 million and the word has got out that if that’s what you’re going to do for the Ottawa Senators, don’t even bother coming to the table.
“Now, as this continues over the next couple of years, and now we know that the Senators will be at Kanata for probably about four-or-five more years at least, people are going to wonder will that change? And will he begin to look around and hire companies to explore and say ‘ok, what potentially is out there?’ And I think that is going to become the biggest question because that is where they’re going to be.”
In response to Ruddy’s allegation that Melnyk wanted a free arena, Friedman also detailed what the original partnership plan for the new arena was, before everything fell apart this fall.
“Before this whole thing started to fall apart in September, here is what I understand the deal was,” Friedman said. “The city was going to own the arena; they were going to operate it through a governing body but the city was going to own the arena. The Senators were going to pay 100 per cent of the operating costs and they were going to pay 100 per cent of the upkeep costs. And they were going to feedback their debt over 25-to-35 years.
“Now people can decide if that’s acceptable, but that’s what the plan was.”
It’s been tumultuous year for the Senators on and off the ice, and Friedman’s latest reporting suggests there is still a long way to go before the team can solve its arena issues.
[relatedlinks]
