Update: Ottawa Senators owner launches $700M lawsuit against partner Trinity, ending LeBreton bid

LeBreton
A rendering of RendezVous LeBreton's pitch for the vacant land owned by the NCC.
Editor's Note

Updated at 8:15 p.m. on Nov. 23 to include a statement from John Ruddy.

Updated on Nov. 27 to include a statement from GBA Development and Project Management.

RendezVous LeBreton’s bid to redevelop LeBreton Flats has come to a crashing end Friday as Eugene Melnyk’s Capital Sports Management announced it is suing partner Trinity Development Group and its executive chairman John Ruddy for $700 million in damages, citing a conflict of interest that led to the failure of the companies’ joint venture.

A release from the Ottawa Senators’ media relations division states that CSM is seeking damages against John Ruddy and Trinity, as well as developer Graham Bird and his company, for an inability to resolve issues related to the LeBreton Flats redevelopment, which would have seen Trinity build residential units and a new arena for the Sens.

The statement of claim alleges a number of breaches on the part of Ruddy and Trinity, “all arising out of conflict of interest, that directly resulted in the failure of the partnership.”

Lawyer Robert Brush, who’s representing CSM in the lawsuit, confirmed to OBJ that the conflicts relate to the threat of competition from Trinity’s nearby residential development at 900 Albert St.

In a statement Friday night, Ruddy said Trinity "strongly denies the allegation" in CSM's lawsuit and "intends to vigorously defend the claim."

"For over 30 years, I have sought to make a contribution to the communities in which Trinity operates, and in particular my hometown of Ottawa. I will always find ways to build Ottawa up and continue to make a contribution to our great city," Ruddy stated.

Graham Bird, the president of GBA Development and Project Management, said in a separate statement that the allegations are "entirely false and will be vigorously defended."

On Thursday the National Capital Commission, which owns the vacant development land and has spearheaded the process to revitalize it, gave the two parties an ultimatum to resolve their issues by January or lose the chance to develop the valuable property west of the downtown core.

The CSM release speaks about the failure of the RendezVous LeBreton bid as a foregone conclusion, indicating an end to the project that was under negotiations for the past two years.

‘Plenty of room’ for development, says Firestone

Trinity Developments has two proposed development projects close to LeBreton Flats along the light rail transit line. One will see three skyscrapers at Bayview Station at 900 Albert, and another announced earlier this month will feature three more towers at the proposed Gladstone Station on the Trillium Line.

The man who headed up the bid that brought NHL hockey back to the nation’s capital in 1992 told OBJ he doesn’t buy Melnyk’s allegations that Ruddy and Trinity’s plans to build other mixed-use projects near LeBreton Flats will undercut the success of the multibillion-dollar proposal to redevelop the 20-hectare site just west of downtown.

Calling Ruddy “an outstanding developer and a great community person,” Bruce Firestone said developments such as Trinity’s plan for 900 Albert would complement rather than undermine the RendezVous LeBreton venture.

“Our region is doing very well economically,” said Firestone, who is now an Ottawa real estate broker. “There’s plenty of room, in my opinion, for great projects like Zibi, like RendezVous LeBreton and like Trinity’s project not far away. They are not competitive; in my view, they are synergistic.”

Back to the drawing board

After Thursday’s NCC board meeting, Mayor Jim Watson acknowledged that Melnyk and Ruddy had a “challenging” relationship, but said the project should not move forward unless the two men could get on the same page.

“We cannot have a dysfunctional partnership construct and build this site over the next 10 to 20 years. It has to be workable,” he said.

It’s unclear what happens next for LeBreton Flats. Mark Kristmanson, the NCC’s chief executive, said Thursday that if the two parties don’t come together by January, the Crown corporation will have to restart the process. That could mean an entirely new request for proposals to develop the land, but Kristmanson did rule out picking up negotiations with the other bidding consortium, Devcore Canderel DLS.

– With reporting from Craig Lord and David Sali