When the Ottawa Senators released their impossibly awkward hype video in September, the one in which owner Eugene Melnyk described his team as “kind of in the dumpster,” there was a moment, other than that one, that stood out.
Melnyk tells defenceman Mark Borowiecki — who is ostensibly his interviewer but in practice is a sounding board — that people have wondered about the future of the team in Ottawa.
“The franchise is not going anywhere,” Melnyk parps. “That’s, like, totally solid.”
It turns out that as these assurances were being uttered, the deal for a new downtown arena for the Senators was already in a complete shambles. That would be the same arena, as part of the redevelopment of the LeBreton lands next to the Ottawa River, that NHL commissioner Gary Bettman had said was “vital” to the future of the team.
The LeBreton deal isn’t technically dead, but all that’s left is to shovel soil over the corpse. When one partner sues another for $700-million, as Melnyk has done to developer John Ruddy, that is pretty much the end of that. And so, while Melnyk continues to insist that he has every intention of keeping his team in Ottawa and pursuing a downtown arena, Senators fans could be forgiven for wondering if this is the beginning of the end.
Arenas are notoriously difficult to finance and build, for the simple reason that the economic case for them, to use Melnyk’s phrase, is kind of in the dumpster. You need a few hundred million dollars and in the end you have a building that will be booked for 41 nights a year, plus some exhibition games, and as many concerts as you can schedule. People spend money on this stuff, but it’s the same discretionary money they would have spent anyway in the local economy, so the net gain is minimal, in terms of return on investment in the building.
Sometimes governments will throw all that aside in hopes of luring a sports team with a shiny new arena (hello, Quebec City), but that it obviously not part of the business case here. The Sens are already in Ottawa. Well, Ottawa-ish.
The trick, as wealthy sports owners have figured out, is to make the new-arena play part of a neighbourhood revitalization or some such sales pitch, with the building folded into larger plans that include other commercial and retail developments and maybe a casino (hello, Edmonton). That way the fact that the billionaire owner is getting a sweetheart deal on the arena is lost in the glare of the Fabulous Economic Development Opportunity.
It’s not easy to get those pieces into place, but LeBreton Flats presented just such a case — an under-used piece of prime land that is ripe for a splashy development. The detailed financials of the prospective deal had not yet been released, and it’s entirely possible that Melnyk was displeased by the way they were going. He says he no longer believes in the viability of the project because of competition from an adjoining development owned by Ruddy, but it could also be that he was simply unhappy with the amount of his own money that he would have had to kick in to the LeBreton proposal. One unnamed source told Postmedia colleague Jon Willing last week that the Senators owner’s expectations in negotiations were “spectacularly unrealistic.”
But with that deal staggering to its demise, what next? Melnyk has already said that he has no interest in being a tenant in someone else’s downtown arena, should LeBreton end up in the hands of a different group entirely. There’s no guarantee that the next plan for the area would even include an NHL-size arena, given how this one imploded.
Asked what the National Capital Commission, which last week gave Melnyk and Ruddy until January to sort their issues out, before the lawsuit blew up that idea, would do about LeBreton next, a spokesman said they will deal with that when the board next meets, in the new year. He also provided a quote from Marc Seaman, the chair of the NCC board, saying it was “fully committed to the redevelopment of LeBreton Flats to the highest standards of design, accessibility, sustainability and connectivity.” You will note that among those standards there is nothing certain about a hockey arena.
The NHL, which has so far stayed silent on the LeBreton imbroglio, cannot be pleased. Bettman supported the move downtown as key to reversing years of declining attendance, a credible plan to do it was proceeding, and now this. Will the team try to stick it out in Kanata? That location, aside from getting worse as traffic has increased, has been poisoned by all the talk of moving downtown. You can only tell people that relocation is crucial so often before it sinks in that your current location stinks.
Melnyk says he is game to try again. He told my colleague Adrian Humphreys in an interview last week that “the Senators remain committed to the hope of developing a downtown arena and will continue to explore options to make that happen.”
But, where, and with whom? There isn’t another parcel of empty land handy, unless the Senators are going to put another rink on the lawn of Parliament Hill. And Melynk’s reputation locally, especially after this latest controversy is, well, kind of in the dumpster.
The team’s fans may see this as the chance to finally get Melnyk out of the picture, if he doesn’t want to be in Kanata and no one wants to help him pay for a new arena. But, he owns the team. Changing that is even harder than building a new stadium.