Senators Move to LeBreton Flats a Losing Proposition

All I am saying is that if you own the Senators, it’s hard to make a business case for relocating to LeBreton Flats, or anywhere else in downtown Ottawa. That is unless somebody donates a cool billion dollars or so to the cause. Because if you own the Senators, that’s what you’ll need to build a new arena where so many in Ottawa say you should.

So, my advice to hockey fans in the nation’s capital is not to hold your breath waiting for an announcement anytime soon that the Senators are moving out of Kanata. Here’s why.

Time Is Running Out for a LeBreton Flats Deal

The NCC extended until Aug. 31 its June 2022 memorandum of understanding (MOU) with the Senators to try to negotiate a deal to develop a new major event centre at LeBreton Flats. That’s just over three months away and by the sounds of it, there are still major issues to address. 

According to Leeder, “there are shortcomings in the agreement. Whatever we do with the NCC has to lead to a viable project. Something we can finance, something we can build that will work with us in the long term. It’s got to work for us and our fans.” Translated, that probably means there are major money issues that the Senators have with the proposed rink at LeBreton Flats. Yet, that doesn’t seem to be registering with the bureaucrats at the NCC. 

Despite Leeder’s comments, NCC chief executive officer (CEO) Tobi Nussbaum said, “there were no major sticking points” to reaching a deal. He seemed almost cocky about the NCC’s bargaining position saying, “We think it’s an excellent site (LeBreton Flats). I think the Senators think it’s an excellent site.”

Not only that, but Nussbaum went out of his way to make it clear that there would be no money from the NCC or any other public source to help the Senators pay what Leeder estimates is the $1.2 billion cost of a new arena at LeBreton Flats. He said, “Obviously, a project like that is a very significant investment of private dollars.” Note his emphasis on “private.”

So, if the NCC is feeling any sense of urgency to reach a deal with the Senators on a new home at LeBreton Flats, it’s not obvious in anything Nussbaum has said. Following the April press conference, the NCC chief said, “There will be a point at which we’ll either have to have a lease or not. I can’t say with 100 percent certainty when that is. Is it in September? I certainly hope so.” But then he went on to point out that if a deal with the Senators falls through, there is a backup plan for the site focused on a mixed-use development with housing.

Senators Need Government Money to Build New Arena

If the Senators are to move out of Kanata, one or more levels of government are going to have to come up with all, or a substantial portion, either in cash or equivalents, of the cost of the new rink. Yet woe betide the politician who gets behind that idea in a city plagued by crumbling roads, a housing shortage and long lineups in hospital emergency rooms. 

It’s true that Bell Centre in Montreal, Scotiabank Arena in Toronto and Rogers Arena in Vancouver were built largely without government money. Yet this underscores the point that while new rinks can be built with only private money in large hockey markets, they can’t in small markets like Ottawa.

Take Calgary for example. The new arena that will house the Calgary Flames comes with a price tag of $926.4 million. Of that, the City of Calgary is on the hook for $850.3 million while the Province of Alberta is kicking in $30 million. The Flames’ owner – the Calgary Sports and Entertainment Corporation (CSEC) will pony up $40 million, but enjoy a sweetheart lease agreement under which they’ll pay $17 million each year compounded at an annual rate of just 1% for 35 years. All told, Susie and John Q. Taxpayer in Calgary are covering over 90% of the cost of the Flames’ new arena.

Of five new NHL arenas that opened in the last 10 years, just two needed government support – Rogers Place in Edmonton and Little Caesars Arena in Detroit. The remaining three – the New York Islanders’ UBS Arena, the Vegas Golden Knights’ T-Mobile Arena and the Seattle Kraken’s Climate Pledge Arena were launched with no public money. What is important to keep in mind though, is that these arenas are multipurpose facilities hosting many events each year ranging from National Basketball Association (NBA) games, college basketball, professional wrestling, mixed martial arts and large concerts. Ottawa is too small to attract the kind and number of entertainment events that Las Vegas, New York City and Seattle can.

Given that it’s Ottawa, I wouldn’t blame any owner of the Senators for demanding public money to build a new rink at LeBreton. Sure, many will dismiss that as socialism for capitalists, but it’s not like it’s the Senators are the ones pressuring for the move. And why would they? 

Bytown has the NHL’s lowest average ticket price (US$103). With the average ticket price in Toronto at US$338, it’s no wonder that Toronto Maple Leafs fans sporting their blue rags take over CTC to see their beloved play when the Maple Leafs come to the nation’s capital. Even so, Ottawa’s embarrassingly low ticket prices probably explain why the Senators’ average attendance per game last season reached over 95% of capacity at 17,580. Average attendance per game was up 5% from 2022-23.

The point of all of this is that moving the team downtown won’t result in higher ticket prices or increased attendance. Ottawa is a government town, and civil servants don’t buy luxury boxes or seats in the 100 Level. Even located in the wilds of Kanata, the Senators still get sellout crowds. So why leave?

That’s a question Leeder will have a tough time answering when trying to convince Senators’ owner Michael Andlauer to dish out $1.2 billion of his hard-earned money to build a new home for his team at LeBreton Flats. That of course follows on the $950 million he spent to acquire the team in September 2023.

It’s tough to make money on a small market team like the Senators. Just ask Bruce Firestone, the team’s first owner who was forced to sell out to Rod Bryden who in turn almost went bankrupt before passing the team on to Eugene Melnyk. He then poured millions of his own money into the franchise year after year to keep it afloat. 

Now it’s Andlauer’s turn to try to keep Ottawa’s entitled fans happy – complaining as they do about driving to Kanata to see games, the price of tickets, beer, popcorn and parking. All the while demanding he spend even more on better players and build them a new rink that’s more convenient for them.

LeBreton Flats Not Ideal Location for Senators’ New Arena

There are other things that take the shine off the business case for a move to LeBreton Flats. For example, there won’t be much parking there, forcing fans to use Ottawa’s notoriously unreliable light rail system to travel to games. It breaks down when it gets too cold in winter or too hot in the summer. 

Even if it didn’t, the capacity of the transit station next to LeBreton Flats isn’t large enough to handle capacity crowds of Senators fans. Thousands of revelers on Canada Day in 2023 found that out the hard way when transit authorities closed Pimisi Station outside LeBreton Flats because it wasn’t designed to handle large crowds.

What must concern the Senators is that moving to LeBreton Flats means moving out of the west end of the city. Five hundred companies are in Kanata North alone and many of them are among the fastest-growing technology companies in North America. Not only do they pay well, but they buy luxury boxes.

Not only are people living in west-end Ottawa well-heeled, but Kanata alone has a population of almost 140,000. Add in Barrhaven, Stittsville and a few other west-end neighbourhoods and the number of people living around CTC approaches about one-third of the entire population of Ottawa. That compares to just over 100,000 people living close to LeBreton Flats. How does moving away from their most well-off customers to a location downtown make any sense for the Senators?

One can easily argue that Kanata isn’t a hockey and entertainment destination. Even so, LeBreton Flats isn’t within a walk of anywhere anyone would want to go. Even if it were, downtown Ottawa has been hollowed out by the COVID-19 pandemic and the federal government’s decision to allow most civil servants to work most of the time from home. 

Far fewer people now work in the downtown core and fewer live there. Many restaurants, shops and bars have been boarded up. What’s more, homelessness, drugs and crime blight much of the downtown core leaving areas like the once-fashionable Byward Market unsafe to visit.  

An oft-cited problem with the NCC proposal is that the Senators can only lease the land at LeBreton Flats. The money to be made on entertainment venues is in owning the associated real estate not leasing it. With only six acres being set aside for the Senators’ new arena, there isn’t much opportunity to earn money from adjacent real estate developments to subsidize the arena operations. 

Senators Will Stay in Kanata

Ottawa fans can be sure of one thing. To where the Senators move and when is far from settled and could take a long time to figure out. The City of Ottawa and the NHL have acknowledged that the team’s new ownership group may settle on staying in Kanata. Also, Ottawa Mayor Mark Sutcliffe has made it clear that there are other locations in central Ottawa besides LeBreton Flats where the Senators could move. By last count, there are seven. 

All of this sounds to me like there’s a lot more negotiating to come and the Senators hold all the cards.