TORONTO - A deal to convert the Maple Leafs' storied former arena into a supermarket has collapsed.
Loblaw, Canada's largest grocery chain, announced it will cancel plans to buy Maple Leaf Gardens, citing high costs to renovate the arena.
An extensive study by Loblaw revealed that in particular, a requirement to keep the historic building's exterior walls standing were above initial estimates. Maple Leaf Sports & Entertainment, which owns the Leafs and the NBA's Toronto Raptors, requires any buyer maintain the existing facades.
The sale was announced in October and was expected to be completed in January. Financial terms were not disclosed.
The deal had stirred controversy among hockey and heritage purists, some of whom prefer that any buyer leave room in a renovated Gardens for an ice rink.
Maple Leaf Sports will entertain offers for the 72-year-old building and contact former bidders. Renovation chain Home Depot made a bid this year that would see one of its outlets plus condominiums on the site.
Neil Robinson, real estate manager for Home Depot Canada, said while his company is searching for a Toronto site, it's too early to confirm its interest in bidding once again for the Gardens.
"No decision has been made as to whether we want to pursue it or not at this point," he said.
Eugene Melnyk, owner of the Senators and chief executive of drug producer Biovail, had been interested in the site as a home for his Toronto-based junior hockey club, the Ontario Hockey League's St. Michael's Majors.
Melnyk tried to buy the arena last year, reportedly to build a 10,000-seat arena on the site for his team and a museum for minor hockey.
Melnyk did not sound interested in revisiting a potential purchase of the arena.
"Maple Leaf Sports had a great opportunity to sell to an owner who would have maintained Maple Leaf Gardens as a first-class facility for minor hockey with the dignity that it deserves," Melnyk said in an e-mail. "I have been pursuing other options since my offer was rejected."
Maple Leaf Sports does not want an arena that would compete with the Air Canada Centre, which opened in 1999. It's already facing competition from Ricoh Coliseum, a new arena that hosts the American Hockey League's Toronto Roadrunners.
"Eugene was initially looking at a 10,000-seater," Maple Leaf Sports spokesman Bob Hunter said. "If (the arena Melnyk wants to build) is much smaller, potentially."
He said while Maple Leaf Sports is in no hurry to sell the Gardens, "We do want to get on with some sort of redevelopment because we think we owe it to the building and the neighborhood."
Maple Leaf Sports has been trying to sell the Gardens for four years.
Talks dragged as company officials debated if a buyer should be asked to maintain the Gardens' ice, as hoped for by former chairman Steve Stavro and other board members. Stavro was replaced by Larry Tanenbaum as chairman in July in a shuffling of the company's ownership and senior executives.
In a first round of talks on a Gardens sale several years ago, MLSE left it up to developers to decide if they would keep an arena on the property. Those talks failed, and about a year later the company said it wanted proposals that include room for a Leafs practice facility.
Hunter also said it's up to the bidders to find a project that makes economical sense, noting it's not uncommon in the construction industry to keep a building's exterior standing while gutting the interior in a renovation. That's a condition of any sale of the Gardens, which was designated as a heritage site several years ago.
