Eugene Melnyk is fretting publicly about whether his own proposal for LeBreton Flats is any good and he’s not just blowing smoke.
On his tour of town halls with aggrieved season-ticket holders for his Ottawa Senators, Melnyk started submarining the LeBreton plans. They’re supposed to see the fallow ground in the middle of Ottawa, the scar of a federal mistake in the 1960s, turned into a new residential, culture and entertainment district with a new arena for the Senators.
The arena, putting Ottawa’s one top-flight sports franchise downtown where it belongs, is the heart of the plan. But condos and office buildings are the skeleton, the profitable real-estate part that will pay for everything else. Melnyk and his RendezVous LeBreton group have been negotiating terms with the National Capital Commission to buy the land for almost a year-and-a-half, and reached an agreement in principle in January.
“It’s a huge project with a tremendous risk,” Melnyk said in a recording from one of the fan sessions. “I’m a risk-taker, but this one is really rolling the dice, and if we’re wrong, we’re really bad wrong.”
Specifically, Melnyk said he worried about whether there’ll be a market for the condo units the RendezVous LeBreton plan includes. The land is surrounded by other developments and Ottawa’s only so big a market.
“I’m now hesitating back and saying, ‘You can’t do all this development there and have LeBreton’,” he said.
Melnyk’s a loose talker. He mused about walking away from the LeBreton deal late last year, right when he was on the verge of signing an agreement in principle to move the plan forward. He’s mused about moving the team. He’s left the Senators’ hockey fans bitter over how he treated team captain Daniel Alfredsson and their business fans bitter over how he treated team president Cyril Leeder.
But gee-I-don’t-know-about-thissing your own proposal after it’s been through two rounds of acceptances is special. The NCC group that evaluated the RendezVous LeBreton plan against the one from a group led by Gatineau developer Devcore even worried publicly that the condo component might be too aggressive. No, no, the RendezVous LeBreton people said, we’re confident this’ll work. They seemed to know what they were doing. They sure insisted they did.
Melnyk’s now got a market study of some sort, he said, and it’s worrying him. Asked Thursday, the Senators declined to share it. “(T)hey are evaluating the results at the board level,” senior spokesman Brian Morris said.
So no-go there. But we can sketch out what might have Melnyk worried now with publicly available information.
The Senators’ LeBreton Flats plan includes 4,000 units, to be built in two phases that extend beyond 2032.
A typical year in Ottawa sees about 6,000 housing starts, according to the federal government’s Canada Mortgage and Housing Corp., about half of them in multi-residential buildings. Fifteen years is a long planning horizon, people’s habits and desires change and unexpected things happen, but in broad strokes we’d expect local builders to put up about 45,000 condos in that time. Four thousand condos is a lot, but not over 15 years.
The thing is, RendezVous LeBreton won’t have the market all to itself.
Developer Claridge already owns the eastern chunk of LeBreton Flats and, after a bit of a construction lull, just filed paperwork to build another 1,950 units there. Trinity, one of Melnyk’s partners in the RendezVous group, is planning 1,100 units in a complex at Bayview just to the west. Both include several hundred thousand square feet of commercial space and the Trinity project includes offices, too.
Windmill’s Zibi development, just to the north of LeBreton Flats, is to include about 1,200.
Over the next 10 to 15 years, the city also expects a new forest of condos not far away at Preston Street and Carling Avenue, about another 4,000 units. A lot of those went through approvals in a mad rush around 2015 but the would-be builders are now sitting on the land and waiting.
If all these projects are built, RendezVous LeBreton will be in the middle of a 15,000-unit condo corridor from the Ottawa River to Dow’s Lake, and that doesn’t include the Booth Street complex the feds want to offload or another 3,500 units in the long-term plan for redeveloping Tunney’s Pasture.
Melnyk’s project will have prime placement on the light-rail line close to the business district and the Ottawa River, not to mention the Senators’ new arena, the central library, and all of LeBreton Flats’ other fun stuff. It has significant advantages. But Melnyk’s group not only has to sell the condos, it has to sell them profitably and briskly enough to cover the project’s numerous other costs.
The Sens are the centrepiece of a land-development deal that’s supposed to secure the hockey team’s future for generations and create a glorious new neighbourhood in the bargain. That was also the plan when they opened up shop at the Palladium in Kanata in 1996. “West Terrace” never happened (a few box stores and the auto mall aside), the failure crippled multiple owners’ and lenders’ finances, and the Senators’ final corporate collapse and sale in 2003 was how Melnyk got to own the team in the first place. For him to lose it in exactly the same way would be humiliating.
What’s a reasonable bystander to do? Be a bandwagon-jumper. The whole point of a pro sports team is to love it through the downs so the ups are all the sweeter. But that’s emotion talking and sports is, above all, business. Don’t love the Senators, don’t love Eugene Melnyk, and don’t love the plan for LeBreton Flats. If it comes together, we can all wave our banners and cheer ourselves hoarse. But let’s see these people rack up some wins first.
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