Two days before a vote that could decide both the fate of a new 20,000-seat arena in suburban Toronto and the possibility of a second NHL team in the area, former Montreal Canadiens owner George Gillett has emerged as the head of a possible rival ownership group.
THN.com has learned that Gillett is expected to attend a meeting Sunday morning in the Toronto suburb of Markham, at the invitation of local city councilor Jim Jones, to discuss the possibility of putting an ownership group together to scuttle the bid led by former Bauer chairman Graeme Roustan.
Roustan, whose bid is being backed financially by local billionaire developer Rudy Bratty, calls for a 20,000-seat arena to be built at a cost of about $325 million on land donated by Bratty. Under the project’s financial framework, which was approved by Markham council last spring, the city would borrow the $325 million and Roustan’s group, which would operate the facility, would repay half the loan over the next 20 years. The city, which would own the facility, would raise its half through a controversial volunteer levy on developers, along with parking revenues and ticket surcharges.
But there is a motion that will be voted on Tuesday night that calls for council to effectively kill the deal, which some believe would kill the arena and any chance of the city getting an NHL franchise. Roustan has stressed repeatedly that NHL commissioner Gary Bettman has not assured him he will ever get a franchise, but contends the building can turn a profit without an anchor tenant. There has been growing resistance to the deal, which still faces final approval before the arena can be built.
There are 13 members on the council and of the 10 contacted by thn.com, six of them – Jack Heath, Valerie Burke, Colin Campbell, Don Hamilton, Jones and Joe Li – have said they will vote in favor of killing the deal. Mayor Frank Scarpitti and councilors Gord Landon, Alan Ho and Howard Shore said they would vote against the motion. Three councilors – Carolina Moretti, Logan Kanapathi and Alex Chui declined to return repeated messages left by thn.com. It’s believed all three are prepared to vote against the motion to kill the deal, which would mean it would be defeated 7-6, keeping the financial deal alive.
Roustan has hinted the arena project will be dead if the financial deal is killed, as will Markham’s chances of getting an NHL team. Colin Campbell – who shares the same first and last name as the NHL’s senior vice-president, but is no relation – tabled the motion and says he wants the league to guarantee a franchise for Markham before they commit to an arena. And he said he thinks the league will do that.
“The NHL wants to be here and we just need a team to be awarded,” Campbell said. “Let’s start negotiating with the NHL properly. I know Mr. Bettman has said, ‘that’s not the way I do business.’ Well, nobody builds a restaurant and then goes to Tim Horton’s and says, ‘Look, I’ve got a great coffee shop here and I want a license. It doesn't happen. Business doesn’t operate the way Mr. Bettman does. Maybe that’s why they have the problems they do.”
Against that backdrop is a meeting scheduled for Sunday morning that will include Gillett, who sold the Montreal Canadiens in 2009.
It has been learned by thn.com that prior to selling the Canadiens, Gillett approached Roustan for a loan of between $80 million and $85 million in order to keep ownership of the team. The loan was to be repaid within 12 to 15 months with an interest rate of 12-15 percent. If Gillett did not repay the loan, he would have given Roustan a stake in the Canadiens equal to the amount he owed. After Gillett was turned down by Roustan, he defaulted on another loan and was forced to sell the Canadiens. A group headed by Roustan was one of the finalists for the team before it was sold to the current ownership group headed by Geoff Molson.
Three years later, the two men could once again be major players in possibly deciding the future of the NHL in Canada’s largest city and the most underserviced hockey market in the world.