Thursday, July 18, 2024

‘I wish I could do it tomorrow’: Michael Andlauer still working toward new Senators arena

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OTTAWA — In a wide ranging interview with The Athletic this month, Michael Andlauer discussed at length what he learned in his first season as owner of the Ottawa Senators. And he stressed that his organization is not remotely close to reaching the standards and expectations that are being set by the new regime.

“Culture takes time to change. It’s not going to happen overnight,” Andlauer said. “We’re not best in class yet. Far from it — we’re not even close.”

The phrase “it’s not going to happen overnight” also could apply to the Senators’ attempts to construct a downtown arena. This saga has drawn out for nearly a decade, if we draw the line back to the Senators’ original pitch to the National Capital Commission (NCC) to develop the land at LeBreton Flats in 2015.

As part of the interview with The Athletic, Andlauer fielded a handful of questions about the status of the new arena. And while patience is certainly one of Andlauer’s strongest characteristics, his eagerness to break ground in a new arena is also evident.

“I’m excited about the opportunities, but it’s a process,” Andlauer said. “I wish I could do it tomorrow.”

A deal for a new arena won’t be reached tomorrow, but there is some reason for optimism about the ongoing negotiations with the NCC. The Senators and the NCC have been working under a Memorandum of Understanding from June of 2022 to construct an NHL arena on the LeBreton Flats site. In a statement to The Athletic this week, NCC officials expressed hopefulness there could be a deal reached at some point within the next four months.

“The NCC remains confident that providing the Ottawa Senators with the opportunity to build a downtown arena at LeBreton Flats is of tremendous value for the team, their partners and for fans,” the statement read. “We continue to demonstrate flexibility and openness in our conversations with the Ottawa Senators, we are still aiming to have an agreement in place for September 2024 as there are no major roadblocks to reaching a deal.”

The NCC pointing out they “continue to demonstrate flexibility and openness” should be a key takeaway. Earlier this year, the NCC extended the terms of that Memorandum of Understanding through the end of August to help facilitate a deal.

The Senators know they won’t be able to re-create the original 2015 plan and design from the Rendez Vous bid, which had roughly 55 acres to work with. Now, they’re looking at something closer to seven acres at the LeBreton Flats site, but the NCC sounds like they would consider a small expansion of that footprint.

The Senators, for example, would like to see some public parking spaces added to the site. Andlauer doesn’t believe every fan wants to rely solely on public transit on, for example, a bitterly cold night in January, — especially when the light rail system has had so many issues in recent years.

“What would be best for our fans? We live in a cold climate, so access to the arena is important,” Andlauer said. “I’m trying to look at this through the lens of a fan. A fan having to go to the game and the experience they get. Before and after the game.”

Ottawa’s troubled light rail system has been a major talking point in this market. It’s often ridiculed for being unreliable, with an embarrassing list of glitches and issues since the Confederation Line launched in 2019. But Ottawa mayor Mark Sutcliffe is confident that by the time a new arena is built for the Senators, a lot of these startup issues for the light rail system will be in the rearview mirror.

“I understand the concerns and frustrations that people have about the troubles we have with light rail. I share those concerns and frustrations,” Sutcliffe told The Athletic in a phone interview this week. “It’s not unusual to have growing pains with new infrastructure. Every engineer and transit expert I’ve talked to is of the view that this will take time, but these things can be fixed. When an arena gets built, it will be a different ballgame.”

Sutcliffe is keenly observing the negotiations between the Senators and the NCC. He wanted to make it explicitly clear that he’s not actively engaged in negotiations with the Senators about alternative sites to LeBreton Flats. Sutcliffe characterizes it as an “information sharing” stage with the Senators, providing them with any details as requested by the hockey club.

“From my perspective, I’m waiting to see how things play out with the NCC. If they go ahead with LeBreton, there’s no work for us to do. If they’re successful, great,” said Sutcliffe. “If not, then we’re prepared to look at other options.”

Earlier this year, Sutcliffe told The Athletic that there are a handful of suitable spots in the downtown core that could possibly work for an NHL-sized arena if the LeBreton site didn’t materialize. But as the Senators have studied some of those options, it appears that a handful may not work from a logistical standpoint. If the Senators want to build an adjacent practice facility next to their arena, the parcel of land at the Department of National Defence (DND) — off Colonel By Road — simply may not be large enough.

“I’ve always said that my first choice is for the arena to be right downtown. But, obviously, the site has to work,” said Sutcliffe. “We’re not in the business of designing arenas. It’s up to the Senators and their architects to determine what are workable solutions or not.”

Other spots in the heart of the downtown core — including the DND site and L’Esplanade Laurier — may also prove too tight for large 18-wheeler trucks to navigate when they require access to the arena for television broadcasts and concerts. If there is a city-owned spot that could provide the right amount of space and transit access, it might be the Bayview Yards plot of land, which is located just 1.5 kilometres to the west of the LeBreton Flats site. And the Bayview LRT station is the junction point where the two light rail systems meet — potentially providing easy access from north, south, east and west points in the city. That spot might just emerge as a dark-horse candidate if LeBreton Flats doesn’t advance to the next stage.


The Senators have long been in search of a new arena to replace Canadian Tire Centre. (Minas Panagiotakis/Getty Images)

At this point, Andlauer is relying heavily on his committee of real estate experts to study the best possible sites for a new arena. That committee is spearheaded by George Armoyan Sr. — who also serves the team’s alternate governor — and includes representation from the Malhotra family, who own and operate Claridge Homes. Team president Cyril Leeder has been tasked with trying to get a feel for where the fans would like to see the new arena. Meanwhile, chief operating officer Erin Crowe and Chris Phillips, who is now the vice president of business operations, have travelled to places such as Seattle, Detroit and Edmonton with Andlauer to study the new arena setups in those markets.

“The other people who bid on this team, a lot of them were focused on the real estate first. I think I was the only one who was more focused on the hockey side of things,” said Andlauer. “I’ve surrounded myself with partners who know more about real estate and development.”

The Senators’ real estate committee is not only tasked with studying the options for the best site for the arena, but they will also be required to help secure the financing for a project of this magnitude. The new arena project for the Calgary Flames is expected to cost in the neighbourhood of $800 million — with an additional $125 million spent on ancillary things such as parking structures, a community arena and public plaza. So something in the neighbourhood of $900 million would be a safe estimate for what we should expect the arena project to cost Ottawa.

Andlauer readily concedes, “It’s not something a private person can afford to do. Trust me, if I could, I would.”

He points to the financing model used to construct both arenas in Alberta, where the Oilers had Rogers Place open in 2016 and the Flames have designs on a new arena in the heart of downtown Calgary.

“There is a public-private initiative that’s worked out well in Calgary and Edmonton,” said Andlauer. “Edmonton is a great story. It’s not burdening the taxpayers.”

In Edmonton, Rogers Place was tabbed to be constructed for $483 million. The Oilers’ ownership group paid $132 million of that bill, with $112.8 million of their contribution to be paid to the City of Edmonton as rent over 35 years. The City of Edmonton’s contribution of $226 million to the arena building included funding through a Community Revitalization Levy, new parking revenues and redirecting a Rexall Place subsidy. And then $125 million was slated to be collected through a ticket surcharge placed on events taking place at Rogers Place in the years ahead.

In Ottawa, Sutcliffe said he is willing to partner with the Senators on an arena project, but he will not endorse a scenario in which the taxpayers are on the hook for a massive project like this one.

“I don’t think the public is open to a scenario where the City of Ottawa is writing a big cheque towards the construction of a new arena,” said Sutcliffe. “It’s not realistic, and I think the Senators know that too.”

What would make a lot more sense is the City of Ottawa assisting by handing over a parcel of land, which could significantly help mitigate the cost of a new arena. Or if the City of Ottawa was to advance a loan for the construction of the arena, it could be recouped through a ticket surcharge like what they’ve done in Edmonton.  Those are viable ways in which the municipal government could help, without reaching into the pockets of the average taxpayer in the city.

There are a lot of hurdles — both with real estate and financing — before the shovels even get put into the ground on this project. The next few months will be filled with high-stakes negotiations that could advance or deteriorate in the snap of a finger. It’s a precarious point in the process, at which all stakeholders will try and extract the best possible deal to protect their own interests.

Andlauer is promising not to be a detonative force at the bargaining table.

“We want this arena to happen. I would never say, ‘These are my terms, take it or leave it,’” said Andlauer. “I’m not doing this for the money. For me, it’s about sustainability.”

Andlauer said he and his executive staff pay close attention to fan polls and conversations around the arena. He understands the wide range of opinions on the topic, which often lead to polarizing and emotional conversations in the marketplace. But he’s asking everybody to take a deep breath, exhale and let the process play out, because he believes this is a legacy project that requires patience and calculation as the guiding forces.

“We have one chance to do it right. This arena isn’t for us, it’s for the next generation,” said Andlauer. “You have to put it all in perspective and ask, ‘What’s in the best interest of the fans?’”

(Top photo of Michael Andlauer: Chris Tanouye / Freestyle Photography / Getty Images)

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