Senators owner Melnyk suing partner over failed downtown arena bid

The Ottawa Senators' plans for a new downtown arena will need to come via a different path.

Capital Sports Management, which is led by Senators owner Eugene Melnyk, is suing Trinity Group, its partner in the redevelopment of downtown Ottawa neighborhood LeBreton Flats, the team announced Friday. The suit claims a conflict of interest caused the venture to fail.

The lawsuit is for $700 million, according to Shaamini Yogaretnam of the Ottawa Citizen. John Ruddy, Graham Bird Associates, and Graham Bird are also named in the suit.

The Senators and Trinity Group told the National Capital Commission that they've "not been able to resolve their internal partnership issues," NCC board members heard during a public meeting Thursday.

During the meeting, the NCC said it would give the Senators and Trinity Group until their next meeting in January to resolve these problems before the board begins looking for other groups to take over the project.

Commencing legal proceedings is perhaps not what the NCC had in mind.

"The two companies were not able to finalize a master development agreement that would have resulted in the construction of a new sports and entertainment arena, as well as a mix of residential, retail, commercial, and hotel properties in Ottawa's downtown core," the Senators release states. "... A number of breaches, all arising out of a conflict of interest ... directly resulted in the failure of the partnership."

According to the lawsuit, Trinity Group executive chairman Ruddy started developing a housing property on a nearby street, which put that development in "direct competition" with LeBreton, Yogaretnam adds.

"Ruddy and Trinity misused confidential inside information about the LeBreton Project and abused the trust (Capital Sports Management) had placed in them," the lawsuit states, according to Yogaretnam.

The NCC said it knew in the planning stage of the project that having one side work alone on the redevelopment would not be possible.

Following Thursday's meeting, Ottawa mayor Jim Watson voiced his frustration over the "challenging" relationship between Melnyk and Ruddy, saying the two must "get their acts together."

"We have given the partners one last time to come together," said Watson, a non-voting member of the NCC.

Driving from downtown Ottawa to the Senators' current arena - Canadian Tire Centre in suburban Kanata, Ontario - can take up to 45 minutes during rush hour.

Copyright (C) 2018 Score Media Ventures Inc. All rights reserved. Certain content reproduced under license.