With his statutory fraud case now behind him, expect Graeme Roustan to be front-and-center while he continues his bid to build an NHL-sized arena in suburban Toronto. Even though his original deal with the city was rejected, things are happening behind the scenes.
When Graeme Roustan tried, and failed, to forge a public-private partnership to build an NHL-sized arena in suburban Toronto, many of his detractors portrayed him as a snake-oil salesman who would leave taxpayers on the hook for millions of dollars.
Much of that sentiment was based on the fact Roustan had been found by a Texas jury in 2009 to be liable for statutory fraud in his dealings with a Fort Worth couple with respect to an indoor rink there. Well, as it turns out, Roustan appealed the ruling and the lawsuit was dropped. In his final judgment on the case, Judge J. Wade Birdwell of the District Court of Tarrant County, Texas wrote, “Plaintiffs have announced they no longer seek and agree to dismiss and withdraw their claim of statutory fraud against all the Defendants.”
“It was unfortunate that a few opportunistic people twisted the limited facts they had while this matter was still ongoing and before the final judgment was entered, clearing my name,” Roustan said in an email to THN.com. “As a hockey player, I have never backed down when challenged and this was no different. Although it went into what seemed to be multiple overtimes, I am very pleased with the outcome.”
In return, Roustan agreed to drop his claim of civil theft against Michael Sanderson and his wife, Ann Gainous, who operated a rink called Ridgelea Iceland and entered into a business partnership with Roustan in 2006. Sanderson and Gainous had a 10-year lease on the rink and had received a cash infusion of $150,000 to help keep the rink afloat in 2006. Roustan and two other investors then formed a new partnership with Sanderson and Gainous, with Roustan and his partners owning 75 percent of the company and Gainous and Sanderson 25 percent. Another $85,000 was put into the company by Roustan and his partners six months later and when it became clear the venture would not turn a profit, Roustan and his partners, as per the deal they had made with Sanderson and Gainous, did not put more money into the business.
Gainous and Sanderson sued Roustan on the basis that they were unaware Roustan had borrowed money and recruited other investors, saying they were told by Roustan at a lunch one day that the money for the rink was coming out of his personal bank account. Roustan denied that and no proof the lunch took place ever surfaced.
It’s not believed the lawsuit scuttled Roustan’s bid to have the City of Markham borrow half the money for a proposed GTA Centre – a 20,000-seat arena that was believed to be a possible landing spot for an NHL team – but it certainly didn’t help. Among members of the public, Roustan was painted as an untrustworthy person with whom to enter into a business relationship, even though he passed a background check with the City of Markham.
Meanwhile, the GTA Centre is not dead. The original plan, which was rejected by the city council, called for the city to borrow $162.5 million – half the cost of the arena – with Roustan and his backers providing the other $162.5 million. The city was to recoup its half with rent payments amounting to $32.5 million over 20 years and the other $130 million on a voluntary levy collected from real estate developers in the region.
It’s now believed the deal could be revived by simply having the developers pay their half of the $162.5 million up front. The mayor of Markham, Frank Scarpitti, has reportedly been in talks with developers since the deal was rejected by council in December and an arena sub-committee meeting is scheduled for later this month to address the matter. Assuming Roustan would still be able to raise his $162.5 million, that would give them the funds they need and construction could begin in the spring.