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Despite lawsuit stalling LeBreton Flats, Ottawa mayor has ‘confidence’ project will push ahead

Ottawa Mayor Jim Watson remains optimistic about the LeBreton Flats redevelopment project. THE CANADIAN PRESS/Justin Tang

Despite a bombshell lawsuit filed last week sending a long-awaited plan to redevelop LeBreton Flats into a nosedive, Ottawa Mayor Jim Watson insists he still has “great confidence” that the 53-acre, long-vacant property will be revitalized.

Capital Sports Management Inc. (CSMI), headed by Ottawa Senators owner Eugene Melnyk, is suing its LeBreton partner Trinity Development Group Inc. for $700 million over what it called a “failed joint venture” between the two companies on a mammoth project to build up the empty land west of the Parliament buildings with an NHL arena, new housing and commercial and public spaces.

READ MORE: Senators owner sues Trinity Group for $700M over ‘failed joint venture’ to redevelop LeBreton Flats

In the suit, Melnyk pitted most of the blame on Trinity for the deterioration of the partnership and also took shots at the mayor’s office. While he wouldn’t comment on the allegations, Watson said the LeBreton Flats project remains one of his top priorities, regardless of the outcome of the relationship between Melnyk and Trinity executive chairman John Ruddy.

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“I’m certainly very committed to ensuring that we see the revitalization, whether it’s with this partnership or another partnership,” Watson said after the last city council meeting of the term on Wednesday.

When asked by a reporter whether he would prefer to start from scratch or salvage the current partnership, Watson said that decision is up to the National Capital Commission (NCC), which owns the land waiting to be redeveloped.

“I would rather us do it right than fast,” he said of the project.

READ MORE: Eugene Melnyk suit claims Ottawa mayor’s office responded with ‘threats’ in LeBreton dispute

Watson added that he thinks it’s “highly unlikely” the Melnyk-Ruddy partnership could move forward with one party suing the other. Ottawa Centre MP and Environment Minister Catherine McKenna also questioned whether the two businessmen could successfully work together at this point.

“A lot of people are wondering that,” McKenna said on Parliament Hill.

Until Wednesday, Watson had not commented on the lawsuit, which was filed on Friday, Nov. 23.

None of the allegations contained in CSMI’s statement of claim have been proven in court. Ruddy and Trinity have “strongly” denied CSMI’s claims.

Melnyk’s company alleged the redevelopment tanked because of “an egregious conflict of interest” on Trinity’s part for its major development at 900 Albert St., located across the street from the LeBreton site. The statement alleged that Trinity pursued 900 Albert St. in a way that placed it “in direct competition with the LeBreton project.”

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The day before, the NCC’s board of directors indicated the project had stalled due to “unresolved issues” between the two partners, leaders of a consortium called RendezVous LeBreton. The board voted to give CSMI and Trinity until its next meeting in January — two months away — to sort out their problems or the NCC would move on.

READ MORE: NCC board gives RendezVous LeBreton 2 months to resolve ‘internal partnership issues’

In the scrum with reporters on Wednesday, Watson said the suit — and the timing of its launch — “surprised” him.

“Obviously, you don’t prepare a document of that nature overnight so obviously they’d been putting some thought into what their actions were going to be,” the mayor said of Melnyk’s company.

The NCC board of directors is expected to next meet during the third week of January. Asked on Wednesday morning whether the NCC would move to take any action prior to the January meeting in light of the lawsuit, the Crown corporation’s CEO Mark Kristmanson said he will not intervene in the legal dispute.

“This process has been governed by a fairness monitor and a fairness process since the very beginning so we’ll continue to respect that. That means I won’t get involved in any discussions between the partners,” Kristmanson told reporters following an event hosted by the mayor at city hall on Wednesday morning.

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Melnyk’s company asked City of Ottawa to build arena, mayor says

Watson also claimed Wednesday that Melnyk’s company initially asked the City of Ottawa to build the 18,000-seat hockey rink at LeBreton Flats, which was the proposed centrepiece of the massive venture.

After the NCC tapped RendezVous LeBreton as the preferred proponent for the project, CSMI came to the table with a number of ideas, one of which was that the city could take ownership of the NHL arena by creating a municipal services corporation, according to Watson.

READ MORE: No new deadline for Ottawa’s LRT in latest update from city

“I said we’re not in the business of building arenas so we’re not going to use tax dollars to pay for that,” Watson told reporters.

“I’ve said all along we should be there at the table with the public realm: sidewalks and parks and the maintenance of those and the building of those. That’s a legitimate expense of city dollars … not building an arena for the NHL.”

Global News has contacted the Senators for comment.

Minister responsible for NCC says feds ‘100 per cent’ behind LeBreton project

The Liberal minister responsible for the NCC said earlier on Wednesday morning that the federal government is “100 per cent committed” to seeing through the LeBreton Flats redevelopment.

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“Let me be very clear: we recognize the importance of LeBreton Flats for the National Capital Region,” said Canadian Heritage Minister Pablo Rodriguez in his remarks at Watson’s event. “I believe the strong collaboration with municipal leaders, the NCC and others, that strong collaboration will ensure that LeBreton Flats will become the jewel we all know it can be.”

READ MORE: Feds launch search for new CEO of NCC, appoint charity executive to board of directors

Earlier this week on Parliament Hill, Rodriguez called the recent upheaval on the LeBreton file “very disappointing.”

“I understand the frustration from the people from Ottawa, from Gatineau on the fact that the proponents were not able to get an agreement, and we have to find a way to move forward,” he said. “I know the NCC is looking for ways to move forward.”

The minister deferred any questions about how the site at LeBreton Flats should be built up to the Crown corporation.

It’s not up to me to decide. It’s not up to me to decide but I know that the NCC is working on this,” Rodriguez told reporters. “It’s a very important project for residents from Ottawa, from Gatineau, for the whole region.

“We have to find a solution.”

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