UPDATE 2/26 No more extensions in LeBreton mediation, Heritage minister says

[Fandlauer]

And Trinity responds to Screugene lol

 

[NorthCoast]

^^^^^

Solution is basically this:
Trinity builds the arena, but Melnyk gets the operating rights.

This is the equivalent of Ottawa building for him.

Selfish and not going anywhere. The Operating rights are where the $$ is. But the team having operating rights is couched in language like this:
CSMI assumes all responsibility for operating the arena for the full 30 year lease.....

"Responsibility" is the word they use....but it means "right to make the profit off of the facility."

My gut keeps saying Melnyk is simply over leveraged.

Surely the franchise would be worth a lot more at the end of 30 years if he owned the arena, but he cant come up with the 10-15 mil per year to carry a 400-500m financing between when the arena is built and when the condos sell.

 

[Tap on the Ankle]

An interesting tidbit from the lawsuit, emphasis mine

https://ottawa.ctvnews.ca/trinity-development-sues-eugene-melnyk-csmi-for-1-billion-1.4222596

The countersuit claims the following: "CSMI and its guiding-mind principal, officer and director, Eugene Melnyk, together with other CSMI executives, including then CEO Cyril Leeder knew about 900 Albert from the outset of the RLG Joint Venture... 900 Albert was an integral part of the CSMI/Trinity relationship."

Part of Melnyk's lawsuit accused Trinity of deception with regards to the nearby 900 Albert development, but Trinity specifically namedropped Cyril Leeder in their suit while claiming that Melnyk & team were made aware of it from the start.

Leeder was heavily involved in the process from the get go, had a falling out with Melnyk (with most fans siding with Leeder), and was fired in early 2017. I imagine Trinity has already discussed this with Leeder and he is willing to corroborate that Trinity/Ruddy's interest in 900 Albert was disclosed early on in the process.

 

[supsens]

An interesting tidbit from the lawsuit, emphasis mine

https://ottawa.ctvnews.ca/trinity-development-sues-eugene-melnyk-csmi-for-1-billion-1.4222596


Part of Melnyk's lawsuit accused Trinity of deception with regards to the nearby 900 Albert development, but Trinity specifically namedropped Cyril Leeder in their suit while claiming that Melnyk & team were made aware of it from the start.

Leeder was heavily involved in the process from the get go, had a falling out with Melnyk (with most fans siding with Leeder), and was fired in early 2017. I imagine Trinity has already discussed this with Leeder and he is willing to corroborate that Trinity/Ruddy's interest in 900 Albert was disclosed early on in the process.

Isn't this why he was fired? Going behind EM's back and sneaky dealing with Trinity .
I wonder if both sides try to pin everything on that poor fellow

 

[madhi19]

Honestly probably a product of the Twitter bot/PR budget Melnyk set aside to try to gain leverage in Lebreton.

Kanata and tech is booming for sure (I know, I work and live here), but the team belongs downtown in a new arena/entertainment district.

Is it just me or depending on the tech sector to fill a arena is not the brightest of idea. Essentially you're asking people who work crazy hours to spend their one free night a week on your product.

 

[bert]

Isn't this why he was fired? Going behind EM's back and sneaky dealing with Trinity .
I wonder if both sides try to pin everything on that poor fellow

Lol you are truly incredible. Straight up made this theory up. With all the articles and press releases on Leeder and Melnyks relationship and you come in with this garbage. So transparent.

Everyone knew about 900 Albert. Its not illegal to develop real estate in Ottawa. Melnyks original suit had no legs to stand on he clearly did it because he has no money and was in breach of the LOI. To claim such a thing about Leeder when he was such a driving force to get the team here in Ottawa [mod]

 

[supsens]

Lol you are truly incredible. Straight up made this theory up. With all the articles and press releases on Leeder and Melnyks relationship and you come in with this garbage. So transparent.

Everyone knew about 900 Albert. Its not illegal to develop real estate in Ottawa. Melnyks original suit had no legs to stand on he clearly did it because he has no money and was in breach of the LOI. To claim such a thing about Leeder when he was such a driving force to get the team here in Ottawa.

Your 100% sure that if we entered a partnership paid for an assesment that said x number of condos were able to sell in an area then a short time later you applied with someone else to build condos in that area I couldn't sue and win? Never mind moving the areana behind my back to make your new shoping area that I have no part in the main peice of 'our' new development. Its not illegal to build condos but that isnt the issue at hand.
If I take my car and run over 50 people can we all agree it's not illegal to drive a car so i'm good right?

 

[varano]

On the positive side, If lebreton doesn't happen, Eugene will probably sell what he deems to be a sinking ship.

 

[lifelonghockeyfan]

"Operating expenses" is always the stumbling block in almost all arena/stadium deals. Even if the facility is paid for, what party pays operate/maintain/uprgrade the facility. Case in point, the Skydome is Toronto which cost an overpriced 700m to build. Believe it was the city of Toronto who owned it they did not want to operate the stadium at a deficit of $100,000 a day. They sold SkyDome to Rogers Corp ,hence the Rogers Centre for 80m.

 

[NorthCoast]

Isn't this why he was fired? Going behind EM's back and sneaky dealing with Trinity .
I wonder if both sides try to pin everything on that poor fellow

Lol, thought you were connected. (edit: sorry, mistook you for mysens)

I would be shocked if EM went after Leeder. A lot of skeletons would come pouring out if you opened up that closet.

 

[bert]

Lol, thought you were connected.

I would be shocked if EM went after Leeder. A lot of skeletons would come pouring out if you opened up that closet.

You are actually getting supsens and Mysens confused with one another. However they do echo one anothers sentiments in a pro melnyk fashion. I have also made the same mistake and only realized it after the fact.

 

[supsens]

So you actually think that Melnyk didnt think that it would try and get a variance? They didnt go for a rezoning it was already zoned for high rise R5 zoning........ Every single developer in Ottawa always goes for a variance after they achieve a certain zoning. You must be real dim or just do not understand real estate development on any level whatsoever. Fortunately for us the courts actually do, these wet paper bag arguments arent going anywhere when the litigators actually go to bat. Anyways keep fighting the good fight pal, whens your shift end?

Umm the owners of the building were aproved for 1.4 million square feet of office space. That was the aproved plan.
I don't care how big you talk thats a fact.
Trinity bought it up after meeting Melnyk another fact. You like to call people names and speak down to them, that has no bearing on the facts.
Again with the blanket statement 'everyone goes for variance._.._ its not illegal to drive._. It doesn't mean anything.

In court he has to prove these actions financialy damaged him. He does not have to prove laws were broken. Will he win or even go to court? Who knows, I can guarantee with statements like, building condos isn't illegal, you have no clue about litigation. but you blanket statements are poop and do not mean anything.

 

[bert]

Umm the owners of the building were aproved for 1.4 million square feet of office space. That was the aproved plan.
I don't care how big you talk thats a fact.
Trinity bought it up after meeting Melnyk another fact. You like to call people names and speak down to them, that has no bearing on the facts.
Again with the blanket statement 'everyone goes for variance._.._ its not illegal to drive._. It doesn't mean anything.

In court he has to prove these actions financialy damaged him. He does not have to prove laws were broken. Will he win or even go to court? Who knows, I can guarantee with statements like, building condos isn't illegal, you have no clue about litigation. but you blanket statements are poop and do not mean anything.

Oh man just forget it. So you admit you were wrong about the rezoning. Ok good. You have yet again compared a developer going for a variance to build more which literally everyone does, whether its building a 4 plex on a 25 by 100 lot of a high rise building.... To someone driving around killing people with their car. No point in arguing with you anymore its going no where.

 

[rojac]

"Operating expenses" is always the stumbling block in almost all arena/stadium deals. Even if the facility is paid for, what party pays operate/maintain/uprgrade the facility. Case in point, the Skydome is Toronto which cost an overpriced 700m to build. Believe it was the city of Toronto who owned it they did not want to operate the stadium at a deficit of $100,000 a day. They sold SkyDome to Rogers Corp ,hence the Rogers Centre for 80m.

Skydome was built and run initially by a provincial crown corporation named StadCo not the city of Toronto. It cost ~$570M not $700M. It was financed by a mix of federal, provincial, city, and private money. I believe the province was covering StadCo's overruns which seems to have led to irresponsible spending -- such as the $112M to add a hotel and health club. In 1994, the province decided they wanted out and paid off all StadCo's debt and sold the stadium to a consortium for $151M. In 1998, that consortium filed for bankruptcy protection and Sportsco International LP bought the stadium out of bankruptcy in 1999 for $80M. Sportsco sold off the hotel for $31M and in 2004, they sold the stadium itself to Rogers for $25M.

But I understand why people prefer the story of the city or the province being forced to sell the stadium to the evil Rogers for pennies on the dollars. When, in fact, Rogers is the fourth owner of the stadium (and just the stadium, not the hotel) and the province sold it for about 25% of its cost -- while still not great -- nowhere near as bad as some like to paint.

 

[MNNumbers]

No matter who did what and who has the upper hand in the lawsuit, I think the main question is:

What's the future of the team now?

And, it certainly seems that, regardless of the outcome of the lawsuits, that RLB is not going to be building an arena, so the Sens won't be moving downtown in the immediate future....

What are the possibilities then?

1- NCC likely, if reports are true, has to go through an entirely new process and choose a new developer. That slows any downtown arena by 4 years or so, right?

2- That means the Sens continue to play in Kanata. Melnyk has been hinting about this recently as well.

What's the future there in Kanata?

If he goes broke, who are the buyers?

 

[Mightygoose]

I would agree, if the parties can't figure out an agreement next month then the NCC would have to restart the process, unless there is a way Devcore can take over the project.

Either way the Sens only place they can play is Kanata. In this aftermath, the fan base will continue to erode as well as further alienation from the corporate community. This with a lawsuit in the works, how can this still be viable under Melnyk?

If he won't pay rent and still want control over an arena, he will have no options to move the team himself so selling would be his only way out. Desmarias and Laliberte have been the names mostly connected to a possible sale but apparently there are others interested. Watching Melnyk being further backed into a corner will not help the value of the team when it's time to sell.

 

[lifelonghockeyfan]

Skydome was built and run initially by a provincial crown corporation named StadCo not the city of Toronto. It cost ~$570M not $700M. It was financed by a mix of federal, provincial, city, and private money. I believe the province was covering StadCo's overruns which seems to have led to irresponsible spending -- such as the $112M to add a hotel and health club. In 1994, the province decided they wanted out and paid off all StadCo's debt and sold the stadium to a consortium for $151M. In 1998, that consortium filed for bankruptcy protection and Sportsco International LP bought the stadium out of bankruptcy in 1999 for $80M. Sportsco sold off the hotel for $31M and in 2004, they sold the stadium itself to Rogers for $25M.

But I understand why people prefer the story of the city or the province being forced to sell the stadium to the evil Rogers for pennies on the dollars. When, in fact, Rogers is the fourth owner of the stadium (and just the stadium, not the hotel) and the province sold it for about 25% of its cost -- while still not great -- nowhere near as bad as some like to paint.

Thanks for your insight. I'm one is do not believe Rogers in evil in how they operate their sports empire. Don't like how they operate, don't buy tickets. But they are certainly are an evil empire (and Bell) and how they gouge with impunity the 35m Canadians with their intercom services.

 

[Mightygoose]

https://www.tsn.ca/melnyk-now-willing-to-play-in-a-building-he-doesn-t-own-1.1228850

In many cases this is true with sports teams. Controlling the building is a different matter which is what it appears Melnyk proposed.

Of course Trtinity is not going to accept it if they're the ones paying all of the cost to build and not collect any rent. Most teams use rent payments as part of their contribution to the construction costs.

Swinging this back to the possibility of Devcore getting involved again. I see the same situation here unless Melnyk sells at least part of the team. Maybe he's on better terms with Devcore's partners than he is with Trinity.

 

[Fandlauer]

It's official

 

[justafan22]

ELI5?

 

[harrisb]

ELI5?

Melnyk sues partner for 700m
Partner (Trinity) counter sues for 1B
NCC who owns the land just pulled the plug on the land deal for both of them

Likely means a new developer for the land and both these lawsuits will either be settled or hit the courts. I could see Trinity seeing his lawsuit through, I believe he financially lost more here, 3.4B of the total 4B investment was his while only the rink (600m) was Melnyk

 

[justafan22]

Melnyk sues partner for 700m
Partner (Trinity) counter sues for 1B
NCC who owns the land just pulled the plug on the land deal for both of them

So what's next Devcore negotiates with Melnyk?

 

[harrisb]

So what's next Devcore negotiates with Melnyk?

I hope so

 

[Tap on the Ankle]

So what's next Devcore negotiates with Melnyk?

Initially it looked like the NCC was going to default to DevCore if this fell through but then there was word that they may do another bidding process. Hopefully it's the former, I don't want to wait another 4 years for anything to happen.

 

[Mightygoose]

It reads the termination takes effect in 30 days of the notice.

Is that timeframe a formality? I can't see this getting resolved in 30 days so it's time to move forward.

My understanding is they will need to restart the process but I wonder if there is anyway to expedite it since allot of work has been done during the past many years?

In any case, I can't see how anyone can partner with Melnyk with him being tied up the ying yang in litigation.

If Devcore moves to the front of the line, it's best they build with room for an arena and don't build until they have an agreement with the Sens....or own them.