The City of Winnipeg is prepared to provide $40 million worth of grants and tax relief to True North Real Estate Development over the next 25 years to help the company purchase downtown’s beleaguered Portage Place mall and redevelop it over the next three to four years at a projected cost of $650 million.
The real-estate wing of the company that owns the Winnipeg Jets plans to build a 12-storey medical tower rising above the east side of Portage Place and a 200-unit, 15-storey residential tower above the west, with up to 80 of those units rented out below median market rates.
The redevelopment plan also calls for True North to dismantle the mall’s glass-enclosed atrium, extend Edmonton Street from Portage Avenue to the Promenade north of the property, and convert central areas of the mall into community centres, offices for community organizations and a small amount of space for retail stores and food services.
In a report to city council’s executive policy committee, published Wednesday, Winnipeg’s economic development office recommends council approve a package of assistance that includes up to $14 million worth of tax increment financing over 25 years, $10 million worth of housing grants and $16 million worth of infrastructure commitments in and around the property.
“The redevelopment of Portage Place Mall will be among the largest private sector investments ever undertaken in Winnipeg’s downtown and should be a catalyst to support further downtown redevelopment projects in the future,” Winnipeg economic development manager Matt Dryburgh wrote in the report.
The tax increment financing grants will flow from new property tax revenue generated by the project. The city plans to keep 20 per cent of the new tax revenue and provide True North with the remaining 80 per cent, but won’t start remitting this money to the private developer until the first September after the new residential tower has an occupancy permit and the entire property is reassessed by the city for tax purposes, the report says.
The $10 million worth of housing grants will be split into two payments in 2025 and 2026, using federal housing accelerator money, the report says. The money will flow to a new non-profit organization directed by the Southern Chiefs’ Organization and True North, which are overseeing the housing component of the project.
The $16 million worth of infrastructure work includes $7.5 million to extend Edmonton Street to the north, $6.5 million to build a new skywalk and upgrade existing sidewalks, and $2 million to help build a community drop-in space in the middle of the mall. City money for the drop-in centre was set aside in the 2023 budget.
Money well spent: mayor
Mayor Scott Gillingham said these funding commitments won’t impact city budgets for the next three years. The municipal funding would be well spent, he said.
“Anybody who knows Winnipeg knows that Portage Place right now is a massive footprint in Winnipeg’s downtown that is not performing anywhere near what it needs to perform to,” Gillingham said outside city hall.
“We need a significant investment at that site to unlock other investments in the downtown as well.”
The city funding, which must be approved by council, is one more piece of a deal for True North to purchase the mall from its private owner, along with its public components from the non-profit Forks North Portage Partnership, which owns the parkade below the mall and the air rights to build towers above it.
The city, the province and the federal government must approve the deal because all three levels of government are stakeholders in Forks North Portage.
The deal calls for True North to purchase the public assets for no less than $34.5 million and a commitment by the company to keep the existing and future skywalk connections open to the public.
The Forks plans to use that money to replace the revenue it will lose once the parkade is sold, the city report states.
True North has a separate deal to purchase the mall itself from Vancouver’s Spruceland Mall Limited Partnership for an undisclosed price.
Wab Kinew’s NDP government is also supporting the project with lease revenue estimated at $77 million per year above existing provincial health-care spending.
Manitoba signed a letter of intent early this year to lease space in the health-care tower for 35 years. That tower will include a primary care clinic, a mental health and addictions clinic, space for surgery diagnostics and renal dialysis, and more space for the Pan Am Clinic.
Kinew has also said he is open to provincial property tax assistance for the project.
The federal government has signalled financial commitments of its own but has not disclosed any details.
True North has until the end of September to pull the trigger on its option to purchase the mall. True North Real Estate president Jim Ludlow said in a statement some outstanding details have not been completed.