Realtor says parkade sale sounds 'fishy'

Winnipeg's largest commercial real-estate firms remain suspicious about the proposed sale of the Winnipeg Square Parkade, even after one of their rivals apologized for erroneously listing what's believed to be the City of Winnipeg's most valuable and attractive property.

Earlier this week, real estate company Shindico surprised other firms -- as well as some city councillors -- by briefly advertising the sale of the three-level, 932-stall parkade, which has been dubbed a "gold mine at Portage and Main" because it turns an annual profit of $1.4 million and also includes the air rights for a future office or hotel tower above the south side of Winnipeg Square.

Selling the parkade is impossible before city council approves the idea and declares the property surplus. Back in July, city council's alternate service delivery committee voted to merely explore the idea by finding out how much private companies would be willing to pay for a parkade believed to be worth at least $35 million.

Now, the city's major brokerage houses are asking why Shindico appears to be the only Winnipeg firm asked to come up with a value for the parkade. The city said two other firms were asked to provide a valuation, but St. Norbert Coun. Justin Swandel, who chairs the ASD committee, said one of those was actually an appraisal of the business side of the parkade and the other was conducted by an Edmonton appraiser who was commissioned by a private company, not the city.

The city's five largest brokerage houses -- national firms CB Richard Ellis, Colliers Pratt McGarry, Cushman & Wakefield Lepage, Avison Young and DTZ Barnicke -- were not asked to provide a real-estate valuation, sources at the firms said.

"I can't believe they would go to a broker for that in the first place," said Martin McGarry, president of DTZ Barnicke Winnipeg. "They should have done an internal appraisal. They have people on staff. Or they should have gone out to a third-party appraisal. Or, they could have gone out to the entire brokerage community."

Wes Schollenberg, managing partner for Avison Young Commercial Real Estate, said Winnipeg's normally co-operative brokerage community would be unbalanced by the absence of a level playing field.

"All of these major brokerage companies get along with each other. Someone has a product, someone has a buyer. It's a friendly, competitive business," he said, calling the current situation "fishy."

Winnipeg chief administrative officer Glen Laubenstein and North Kildonan Coun. Jeff Browaty both said they understand the confusion in the industry.

"It's odd (the city) chose one and not all the others," said Browaty, who sits on the ASD committee and used to appraise commercial properties. "I would certainly be questioning why one of their competitors was getting so far in front of it."

In a brief email statement to the Free Press on Wednesday night, Shindico president Sandy Shindleman simply said, "the city decides how to deal with all of (its) assets."

Commercial realtors are keeping a close eye on the parkade sale because the commission alone could be worth upwards of $500,000. City councillors, meanwhile, see the parkade sale as a means of eliminating the Winnipeg Parking Authority's debt and coming up with the cash to improve the Millennium Library Parkade and fixing the crumbling Civic Centre Parkade.

And investment firms are salivating over the property because the lucrative parking business could provide a steady source of income for any developer willing to build a new tower over the south side of Winnipeg Square.

The most likely buyer is Toronto-based Crown Realty Partners, which already owns the Winnipeg Square mall and the Commodity Exchange Tower. On Wednesday, partner Gary Samuel declined to comment on a possible purchase.

Mayor Sam Katz, meanwhile, said now is the right time to build a new tower over Winnipeg Square, as construction inflation cools down during a recession. But the mayor dismissed the concerns of commercial realtors, noting Shindico merely made a mistake when it listed the property.

Shindleman told radio station CJOB nobody was harmed by the error. He also told the station his firm is interested in listing the parkade and only made a mock-up of the sales brochure as a prelude to a possible sales pitch.

The city will seek assurances from Shindico that no future mistakes will be made if it deals with the firm again, Laubenstein pledged.

bartley.kives@freepress.mb.ca

Republished from the Winnipeg Free Press print edition February 12, 2009 A4