The City of Ottawa is proposing a list of ground rules it wants observed as negotiations over the redevelopment of LeBreton Flats continue — chief among them, a guarantee that municipal taxpayers won't be overburdened in the deal.

The National Capital Commission is negotiating with the Senators-backed RendezVous LeBreton to sell up to 21 hectares of its LeBreton Flats property.

RendezVous LeBreton plans to redevelop the downtown site into a community that would include a new NHL arena, 4,000 units of housing and a French-language public school.

While the city is not a direct partner in those negotiations, it has a direct interest in the outcome, city manager Steve Kanellakos wrote in a memo sent to the mayor and city councillors Friday.

Not only does the city have its own ideas for what constitutes "a sustainable and vibrant community," Kanellakos wrote, but it also "has a limited number of financial tools available to it to encourage development."

Taxpayer 'must be protected'

City staff want the city's finance and economic development committee and council to sign off on some recommended principles for the city's participation in negotiations, including that the city taxpayer "must be protected."

Should the Sens-backed group propose to get help in funding its arena and development, the city would need to do due diligence to ensure taxpayers are protected, staff wrote.

Any liability the city agrees to take on would also "need to be secured by assets or a mechanism to recover the costs from the benefiting area," staff wrote. Council would get a chance to consider the results of that due diligence if any recommendation is brought forward as part of an agreement on a deal or other application to the city.

Other principles city staff are recommending include that the redevelopment reflect the goals and intent of the city's own plans and current investments, that clear roles of who does what — including the role of the federal government — are spelled out, and that any work is coordinated with the city's own infrastructure projects.

An agreement in principle between the NCC and RendezVous LeBreton is expected by the end of the year.

The city's recommendations are expected to be presented to the finance and economic development committee on Nov. 7.