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Remember This? The re-birth of the Ottawa Senators

Imagine the excitement, and the scepticism, when news broke in June 1989 that an Ottawa development company was not only attempting to restore NHL hockey to the nation’s capital after a break of close to 60 years, but it also planned to revive the old Ottawa Senators club, an honoured name that still resonated in Canadian hockey lore.
2020-09-18 Ottawa Senators logo
Ottawa Senators updated logo. Photo/ Ottawa Senators

CityNews, in partnership with the Historical Society of Ottawa, brings you this weekly feature by Director James Powell, highlighting a moment in Ottawa's history.

After winning multiple Stanley Cups during the 1920s, the storied Ottawa Senators, collapsed in 1934. Barely profitable during good times, the team simply could not survive the ravages of the Great Depression. Decades later, a World Hockey Association (WHA) franchise, the Ottawa Nationals, appeared and disappeared in a matter of months during the early 1970s.

Imagine the excitement, and the scepticism, when news broke in June 1989 that an Ottawa development company was not only attempting to restore NHL hockey to the nation’s capital after a break of close to 60 years, but it also planned to revive the old Ottawa Senators club, an honoured name that still resonated in Canadian hockey lore.

That company was Terrace Investments Ltd, under the direction of its young president and chief executive officer, Bruce Firestone. Terrace Investments was no fly-by-night operation. The family-owned firm, established in 1956 by Bruce Firestone’s father, Jack Firestone, was well known, the developer of a number of commercial properties in the Ottawa region. However, bringing a National Hockey League (NHL) franchise to the city was a huge undertaking for the company, one that would require outside investors to bring it off as well as a lot of hard work and much good fortune. The price of admission was steep, a cool $US50 million. And that was before paying for players, building an arena, and covering all the ancillary costs associated with starting a hockey club from scratch, including putting together a convincing bid to the NHL’s board of governors.

A bid for an NHL franchise was not a wacky idea, however. The NHL was in the mood to expand after a decade of stability; it had previously added four new teams in 1979—Edmonton Oilers, Hartford Whalers, Quebec Nordiques, and the Winnipeg Jets—former members of the World Hockey Association. Reportedly as many as thirty cities had expressed an interest in obtaining a hockey franchise. In addition to Terrace Investments’ bid for an Ottawa team, investors were interested in bringing major league teams to Halifax, Hamilton, Saskatoon and Kitchener-Waterloo. A number of US cities were also keen, including Dallas, Houston, Milwaukee, Phoenix and Seattle. As well, there was talk of European cities obtaining franchises in what would become a global hockey league. Cities like, Moscow, Leningrad (today’s St. Petersburg), Stockholm and Helsinki were mentioned as likely contenders. But did little Ottawa stand a chance? Many doubted it. The senior Firestone was sceptical of the idea. Ottawa Mayor Jim Durrell, while wishing Bruce Firestone well, thought his bid for an NHL franchise had little chance of success. Alan Eagleson, the former director of the NHL’s Players’ Association, said that Ottawa was a “long shot.”

Firestone’s bold game plan was to build a 20,000-seat arena on agricultural land that Terrace Investments had purchased in West Carleton and Kanata. Around the arena would be constructed a mini-city of 9,000 residents to be called Terrace West. An adjacent, upscale hotel was also planned for the site. The cost of the franchise would be covered, at least in part, by Terrace reselling land for development, assuming the site was rezoned for commercial and residential use. This was a big assumption.

Firestone officially kicked off his bid for an NHL franchise at a news conference in early September 1989 with Frank “Finny” Finnegan at his side. Finnegan had been a member of the Ottawa Senators’ team that had won the club’s last Stanley Cup in 1927. Firestone also announced that plans for the new arena, to be called the “Palladium,” would be forthcoming shortly. Simultaneously, he launched a campaign for reservations for season tickets.

The words had hardly left his mouth when Firestone’s bid for a franchise hit the first of the many stumbling blocks that were to come. The Ottawa Senators of the Central Junior A Hockey League (CJHL) had launched a law suit over use of the name “Ottawa Senators.”

For the next fifteen months, Firestone worked hard to put together a package that would convince John Zeigler, the president of the NHL, and the NHL’s Board of Governors that his Ottawa Senators bid was genuine, and that he had the financial backing to bring it off.  Things initially moved smoothly according to Firestone’s game plan. In January 1990, Terrance Investments came to an agreement with the Canadian Junior Hocley League (CJHL) Senators over the name as well as members of the Thomas P. Gorman family who also had a claim on the name. In March, Terrace put up an initial non-refundable US$5 payment, a down payment on the $50 million franchise fee. Three months later, Regional Council and the Kanata City Council agreed to rezone the agricultural land for the construction of the Palladium. In October, Milwaukee, a front-running city in the bidding for an NHL franchise, pulled out, improving Ottawa’ chances. Subsequently, Ottawa Mayor Durrell urged supporters of the Ottawa Senators to swamp Premier Bob Rae with letters demanding provincial support for Firestone’s bid. The Premier complied sending a letter of support to the NHL governors on behalf of Ottawa, but also for Hamilton whose bid was backed by Tim Horton’s Donuts. Kanata residents were urged to support Operation Blackout in which they were to turn off their electricity on one day in November in support of the team. An estimated 134,000 people took part.

In early December 1989, the NHL’s board of governors met in conclave at the tony Breakers resort in Palm Springs, Florida to consider competing bids for NHL franchises. Firestone provided them with an impressive black, leather bound bid book with gold trim. Outside in the street in front of the hotel, the Ottawa Fire Brigade band and enthusiastic, placard-waving Senators supporters did their best to sway governors’ opinions.

Two years of lobbying and US$3.5 million in bid preparation costs paid off. Just before noon on 6 December 1989, President Zeigler announced that Ottawa, along with Tampa Bay, had been awarded conditional franchises.

From that point, the really hard slogging began. It was not obvious that Firestone and Terrace Investments would be able to meet all of the NHL’s conditions. Most importantly, there was the matter of finding US$45 million of the franchise fee to be paid in two tranches, the first by June 1991 and the second by December 1991. Second, the NHL insisted that by December 1991, Terrace had to have a binding financial agreement for the construction of the Palladium.

Both conditions were problematic. Terrace did not have the cash to make the payments; it needed outside investors. But Canada was experiencing a deep recession in 1991, and money was not easy to find. As well, much of Terrace’s financial plan hinged on the rezoning of prime agricultural land on the outskirts of Kanata for the construction of the arena and surrounding hotel, retail and residential development. But a Carp farmer, later joined by others, had protested the rezoning to the Ontario Municipal Board, setting in motion a hearing into the rezoning decisions made by Kanata and the regional government.

One condition that was easily met was the number of season tickets sold. In a ten-day selling “blitz” late December 1990, 9,355 season tickets were reserved for the Senators’ first season in the Ottawa Civic Centre, their temporary home before the Palladium was built. This was essentially all the seats in the arena. Following a renovation in 1991, capacity was increased to 9,793 seats by reducing the width of seats to a standard 16 inches.

Through 1991, Firestone worked on both the financing and zoning issues. To help him, Ottawa’s Mayor Jim Durrell, now a convert to the Senators’ cause, became President of the club in late 1990. Shortly afterwards, he resigned from the mayor’s chair after there were complaints of his “moonlighting.”

Terrace Investments began selling limited partnerships in the new franchise, which were divided into Class A, B, and C units. Buyers did come in, but it was slow going. And it looked touch and go whether the June US$22.6 million payment could be met. In the event, Terrace placed the funds in escrow on the due date (which had been extended a week for both Ottawa and Tampa Bay). Reportedly, Terrace borrowed the necessary funds. Funding prospects improved with news that Paul Anka, the crooner from the 1950s and 1960s who had roots in Ottawa, had stepped forward and bought a significant interest in the team and the Palladium project.

The Ontario Municipal Board hearing, held over an eleven-week period through the summer of 1991, was a close call. The Ministry of Agriculture and Food as well as twelve individuals opposed the rezoning of prime agricultural land for other purposes. If there was no rezoning, the Firestone’s NHL’s franchise bid would fail. The opposition of the Minister of Agriculture incensed Firestone. Firestone thought that the New Democratic Party (NDP) government’s hostility to the rezoning reflected its preference for Hamilton to receive an NHL franchise as Hamilton was an NDP stronghold.

The decision of the three-person Board hinged on six points. These comprised: the appropriateness of using agricultural land for commercial purposes, specifically a hockey area; whether Terrace Investments had made an adequate search for alternate sites; the size of the economic benefits to the project; the need for commercial development around the proposed arena, i.e. the proposed hotel and the homes and retail spaces; traffic congestion in the area; and the integrity of the municipal planning process.

While critical of Firestone’s approach to the rezoning issue, the Board agreed that 220 acres of land could be rezoned to permit the building of the Palladium arena. However, it required Terrace Investments to pay for all the required infrastructure, including the interchange linking road access to the arena to the Queensway. Moreover, the Board denied permission to rezone additional agricultural land for a hotel and the Terrace West “mini-city.”

It was enough. Construction on an NHL-size arena to house the re-born Ottawa Senators could begin. A key condition of the franchise had been met. Now that this major hurdle had been crossed, investor money was easier to raise. Terrace Investments paid the second US$22.5 million installment into the escrow account in mid-December 1991. On Dec. 20 1991, following the completion of the necessary paperwork, an excited Bruce Firestone held up a framed NHL franchise certificate. The Ottawa Senators had been reborn. Firestone said “The Senators will never leave town again.”

The re-born Sens were back in action at the start of the 1992-93 season. Bruce Firestone, however, didn’t stay around beyond that first year. In August 1993, he sold his and his family’s interest in Terrace Investments to his partner, Rod Bryden. The financial and emotional toll of bringing an NHL franchise to Ottawa had been too great.

 

 

 

 

 

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