News Article: Lebreton project

[Knave]

Why in the world would he get condo dollars ? Did you read this somewhere, I’d be shocked, other than some arena funding by the developers which I would hope would be minimal.

Because this isn't a typical development. The NCC was never going to approve a bunch of condos and businesses.

The Rendezvous people need the arena which likely needs the Senators.

 

[Take a Bath Son]

the devil is in the details.

The whole argument over corporate structure is essentially, who gets what. I think asking trinity to build an arena is a bit rich. But, I could see 2 models evolving. One where a portion of the arena is paid for by trinity indirectly, funded by housing sales/rental income. The other, where melnyk gets a piece of the real estate return. This is what they cannot agree on. The other variable is ownership of the senators-to what degree does melnyk retain control. And trinity's other projects in the area.

Real estate returns can yield 15-20%. entertainment revenues will increase at least 10-20%. this project is certainly viable, but asking trinity to pay for the whole stadium is a non-starter. This is melnyk's way. He simply borrows of his equity holdings, and puts in as little capital as possible-his equity is never at risk. The borrowing is offset by the valuation.

at this juncture, with this size of project, he needs to place a bet-if he can't he needs to step aside. Otherwise he puts a lot at risk. His best move right now is to sell and let the new owner inherit the RVL contract and complete it.

 

[JD1]

From the value of a toy for billionaires in a professional sports franchise increasing. He bought it cheap over a decade ago. If he can sell with a brand new arena in the heart of the city... the value of the team has gone way up over time. An arena downtown that can host an anchor tenant and major concerts and events is attractive as well. It may not play well with a traditional ROI sheet but look around at what sports franchises sell for.

And while you may have your model: two bids with major investors in construction thought enough of the value of land and condos within walking distance of downtown to join or submit a bid.

So it's not just some anonymous hf boards poster here. You're saying dozens of people, many who have made fortunes in construction are all wrong.

yes there were 2 bids....push appears coming to shove and one is falling apart

the other bid had an arena and the idea of a tenant for the building...so they are making some return on the arena thru jockey and concerts and likely accepting a lower ROI offset against volume

that's quite a different deal than Melnyk's. ... he already has a rink and concert revenue and can only look at the incremental difference

the business models would be profoundly different

 

[Stylizer1]

Should have awarded the bid to Devcore in the first place.

I didn't like the look of the proposal.

 

[JD1]

Melnyk is to get a portion of the condo $.

He’d also make money off the increase in the number of events run at Lebreton and the increase amount he could charge for the arena rental for those events.

again...it's easy to say increased number of events

step back and ask yourself if we are losing events now due to the lack of an 18000 seat arena. the answer is no. if someone plays montreal and Toronto and can stop here they do. Lebreton versus Kanata won't change that.

a convention? something too big for the Rideau centre facility but that wouldn't consider Kanata because it's not downtown? ya that might book a week.

again....you can say it...but that doesn't mean it's true or makes financial sense

musicians aren't gonna say...f*** that I'm not playing in a suburban arena.. I'm a downtown musician

 

[GCK]

Devcore had a lot of maybes in the bid like an aquarium IF someone wanted to build one etc... Having said that, they have lots of cash on hand.

 

[OgieO]

Car museum and automotive business school in Devcore big was odd to me as well. I thought the arena and surrounding grounds was better with Melnyk's bid as well but both were pretty exciting in that area. Only thing I didn't like of the Melkyk bid was Melnyk.

 

[GCK]

Car museum and automotive business school in Devcore big was odd to me as well. I thought the arena and surrounding grounds was better with Melnyk's bid as well but both were pretty exciting in that area. Only thing I didn't like of the Melkyk bid was Melnyk.

I also liked covering the LRT in the RVL bid rather than an ugly open pit.

 

[Joeyjoejoe]

Hahahaha its just a couple of guys on Twitter and this board lmao.

 

[DaveMatthew]

I'm not surprised by this at all. This project, from the point of view that it funds an arena and Melnyk makes a ton of money, has never made financial sense to me

It's a 4B deal. that seems to be the oft quoted number. If the entire project returned a 15% profit then it funds the arena minus any type of NPV assessment. The research I've done doesn't show condo projects returning 15% and even if this particular deal did....all of that return is not Melnyk's.

The money doesn't add to me.

I don't see the incremental revenue from a downtown arena being anywhere close to sufficient to fund the project. And if the revenue cannot fund it then there's an equity injection required and I don't see the ROI on that equity injection.

There seems to be this overwhelming view that Melnyk makes a boatload on this but I don't see where it comes from. it will not come from a massive increase in arena rentals. there are only so many arena rock shows touring at any point in time and we're not losing out on 50 dates a year because our rink is in Kanata. If we're talking hockey revenues increasing the only way that happens is with increased ticket prices and that brings in to question whether the market can absorb the increase.

personally I don't see the windfall. and before I get jumped on for saying so....I'm not coming out with this opinion as a result of this week...I've expressed this before.

you can't spend 600M on something without an ROI model and that model would need to consider the opportunity cost on the 600M. I don't see it making sense without public investment. that's not to say public investment makes sense, just that private investment does not.

if anyone wants to layout some numbers that shows it all making sense please do.

and for those that want to throw out a whack of LOLs and call me a "shill"... I'm qualified to be involved in building this type of ROI model so before you make a "shill" type comment, consider whether your career would get you hired to produce this kind of ROI model

So Eugene Melnyk and a rotating cast of characters including Cyril Leeder and Tom Anselmi have spent the last 4+ years working on a partnership and with the city and federal government on a bid and plan that doesn't, and never, made financial sense? Is that what you're saying?

And after all the work, the years of bidding and negotiation, they're going to pull out in the last few weeks because Melnyk has just now realized it's not going to be ROI positive for him?

If it the research is so simple and clear cut, as you say, we did the organization invest so much time and effort into this? Why didn't they just hire you to produce "this type of ROI model"?

 

[JD1]

Why in the world would he get condo dollars ? Did you read this somewhere, I’d be shocked, other than some arena funding by the developers which I would hope would be minimal.

I suspect Melnyk has some leverage on Ruddy which is "without the Sens you can't win" which is likely true and as a result then Melnyk is most likely getting a cut

but step back.. if its a 4B deal and that includes an arena plus other dev that are not condos...how much is condos? 3B? 12% margin on 3B is 360M in profit all in and Melnyk gets a piece of that which is a long way away from 600M

 

[GCK]

So Eugene Melnyk and a rotating cast of characters including Cyril Leeder and Tom Anselmi have spent the last 4+ years working on a partnership and with the city on a bid and plan that doesn't, and never, made financial sense? Is that what you're saying?

And after all the work, the years of bidding and negotiation, they're going to pull out in the last few weeks because Melnyk has just now realized it's not going to be ROI positive for him?

If it the research is so simple and clear cut, as you say, we did the organization invest so much time and effort into this?

Maybe this is why Anselmi left.

Anselmi: “So Eugene, your plan to fund the arena was to wait until everything is signed and then tell the city and your partners to give you 500M ?????”

 

[Knave]

Car museum and automotive business school in Devcore big was odd to me as well. I thought the arena and surrounding grounds was better with Melnyk's bid as well but both were pretty exciting in that area. Only thing I didn't like of the Melkyk bid was Melnyk.

It's weird because the automotive industry is primarily west of Toronto.

It would have made more sense to have an Indigenous history museum, move the science and technology downtown (I know it was or is working on a huge upgrade in it's current location) and other museum ideas like that. If the goal was to be more like a major capital city, car and craft beer museums seem like odd choices because they are so regional in nature and not really national.

 

[JD1]

So Eugene Melnyk and a rotating cast of characters including Cyril Leeder and Tom Anselmi have spent the last 4+ years working on a partnership and with the city and federal government on a bid and plan that doesn't, and never, made financial sense? Is that what you're saying?

And after all the work, the years of bidding and negotiation, they're going to pull out in the last few weeks because Melnyk has just now realized it's not going to be ROI positive for him?

If it the research is so simple and clear cut, as you say, we did the organization invest so much time and effort into this? Why didn't they just hire you to produce "this type of ROI model"?

yes that's what I'm saying....from the view point of owning the team and the rink...it doesn't make sense to me

it makes perfect sense that every other entity wants to move forward....lots of money to be made ... it doesn't make sense financially to me for the Senators to move

I've laid out why I believe that...feel free to chime in with some numbers showing how it does make sense....I'm not saying I'm right, I'm saying I don't see it and I'm fully open to being educated on it... but not in an "increased concerts" kinda way...I mean real numbers

 

[Sensung]

yes that's what I'm saying....from the view point of owning the team and the rink...it doesn't make sense to me

it makes perfect sense that every other entity wants to move forward....lots of money to be made ... it doesn't make sense financially to me for the Senators to move

I've laid out why I believe that...feel free to chime in with some numbers showing how it does make sense....I'm not saying I'm right, I'm saying I don't see it and I'm fully open to being educated on it... but not in an "increased concerts" kinda way...I mean real numbers

What is the franchise worth if it stays in Kanata?

What is the franchise worth if it moves to Lebreton?

See if you can figure out where the ROI for Melnyk resides.

 

[Engineer]

yes that's what I'm saying....from the view point of owning the team and the rink...it doesn't make sense to me

it makes perfect sense that every other entity wants to move forward....lots of money to be made ... it doesn't make sense financially to me for the Senators to move

I've laid out why I believe that...feel free to chime in with some numbers showing how it does make sense....I'm not saying I'm right, I'm saying I don't see it and I'm fully open to being educated on it... but not in an "increased concerts" kinda way...I mean real numbers

You haven't provided any real numbers, and you aren't privy to any real numbers.

If you're certified to be managing 4B infrastructure projects as you claimed, why do you spend all day on HF arguing for Melnyk instead of building these projects?

 

[JD1]

What is the franchise worth if it stays in Kanata?

What is the franchise worth if it moves to Lebreton?

See if you can figure out where the ROI for Melnyk resides.

you say that like you have an answer

you continue to just blow noise Sensung

why don't you take a shot at spelling out what that increased value is...seriously...put some numbers together. start at the 420 forbes credits the value at currently and go from there

you're pretty f***ing keen on posting fluff... put something credible together that supports what you've said

 

[BonkTastic]

You haven't provided any real numbers, and you aren't privy to any real numbers.

If you're certified to be managing 4B infrastructure projects as you claimed, why do you spend all day on HF arguing for Melnyk instead of building these projects?

The first part of this is valid criticism that I can get behind.

The second part, not as much.

 

[JD1]

and please don't come back with your usual bs "are you suggesting that franchise won't increase in value"

we both know it will

I am asking you to put the numbers together to show it making sense....otherwise leave it be

 

[Engineer]

The first part of this is valid criticism that I can get behind.

The second part, not as much.

& that is fine. It was my personal criticism; it's easy to claim how important one is online & I don't believe him when he claims to be certified to manage such projects.

I am asking you to put the numbers together to show it making sense....otherwise leave it be

You're making the claim, you provide the numbers.

 

[Tnuoc Alucard]

Imagine them dumping EM, and proceeding to build a new arena without him involved? Omg. That would be the ultimate collective middle finger from the city.

On the other hand, proceeding with new plans that don't include an arena would be a potential death sentence for the franchise...

It would be a middle finger from the NCC, not the City ........ as it's the Federal Government who actually owns the land, that the RLG is planning on purchasing, and has to eventually sign off on it.

 

[Sensung]

you say that like you have an answer

you continue to just blow noise Sensung

why don't you take a shot at spelling out what that increased value is...seriously...put some numbers together. start at the 420 forbes credits the value at currently and go from there

you're pretty ****ing keen on posting fluff... put something credible together that supports what you've said

You're the hard numbers guy with all the answers.

Feel free to posit a value on the Franchise if it stays in Kanata.

Then provide us with your wisdom on what the franchise is worth on a new Lebreton venue.

Is it the same?

You are the one who keeps claiming that owning sports franchises is a losing venture. You back it up with your opinion.

I'll go with the fact that the NHL keeps posting record revenues and has groups plopping down $600 M to join the club.

 

[JD1]

You're the hard numbers guy with all the answers.

Feel free to posit a value on the Franchise if it stays in Kanata.

Then provide us with your wisdom on what the franchise is worth on a new Lebreton venue.

Is it the same?

You are the one who keeps claiming that owning sports franchises is a losing venture. You back it up with your opinion.

I'll go with the fact that the NHL keeps posting record revenues and has groups plopping down $600 M to join the club.

that's a fluff answer and it doesn't provide you any insight

try and answer it...or continue with your head in the sand

I can get why Ruddy et al want to move forward. ... everyone makes money....but I don't get it from the Senators perspective

 

[JD1]

Maybe this is why Anselmi left.

Anselmi: “So Eugene, your plan to fund the arena was to wait until everything is signed and then tell the city and your partners to give you 500M ?????”

yep. I've wondered why he left and it was never explained. he came on AFTER the bid went in....maybe he looked at it and said it makes no f'n sense and left

 

[Sensung]

that's a fluff answer and it doesn't provide you any insight

try and answer it...or continue with your head in the sand

I can get why Ruddy et al want to move forward. ... everyone makes money....but I don't get it from the Senators perspective

So you want to continue to avoid the question, answer man.

What do YOU think the change in valuation of the team is with the move from Kanata to Lebreton?