Winnipeg Free Press - PRINT EDITION

North Portage gets makeover

$75-M private-sector project 'an enormous deal for downtown'

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How do you define downtown revitalization?

How about a $75-million hotel/office/retail/parkade development across from the MTS Centre on the north side of Portage Avenue?

All of the city's downtown development champions were on hand to unveil just such a project Tuesday at the site of the old A&B Sound building.

The 20-storey development will include a 154-room, 12-storey, $25-million ALT Hotel designed and developed by Quebec boutique hotel developers the Germain family. It will be built atop an 80,000-square-foot, $30-million office/retail/restaurant development with the architecture/engineering firm Stantec as the anchor tenant. A $20-million, 450-stall parkade will be built adjacent and behind it on Hargrave Street.

Public-sector development agency CentreVenture Development Corp. played quarterback in assembling the land and putting the various players together. Ross McGowan, CentreVenture's CEO, went out of his way to say that the most important element of the project is that it will all be done with private-sector money.

"This is an enormous deal for downtown," McGowan said. "There is very little in the way of subsidy. The incentive is their opportunity to do the development."

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That is a far cry from what might have been.

About two years ago, a third-tier discount retailer was on the verge of leasing the A&B Sound building.

"It was our position that this was the last straw in the decline of our iconic avenue," McGowan said. "And if action was not taken, our fear was that we would lose Portage Avenue for decades to come."

CentreVenture acquired the property for about $2 million, even though there was no definite development plan on the table.

Longboat Development Corp., the Chipman family's real estate development operation, quickly got involved in trying to find a project for the space that would be viable.

"We think this will have immediate and tremendous impact on Portage Avenue," said Jeoff Chipman, president and CEO of Stevenson Group Inc., of which Longboat is the development arm. Longboat will be the new project's developer.

Chipman said the second most important feature of the project is that it will become a catalyst for the establishment of a Sports Hospitality Entertainment District (SHED).

McGowan said a full outline of the SHED plan will come out in a few months. At its heart is an incremental-tax financing scheme that would see the incremental increase in taxes paid by the newly redeveloped properties spent on streetscaping, directional signs and other amenities in the immediate area.

Demolition is to begin in November, and construction will start at the end of this year or early next year, for completion in fall 2013 -- in time for the new Winnipeg Jets' third year in the NHL.

Jean-Yves Germain, co-president of Groupe Germain Hospitality, said his company committed to building a new hotel in Winnipeg before he knew the NHL was returning.

"The NHL is a bonus," he said, after joking about hoping to see the Jets play the Nordiques again.

As for his decision to build at a site that had effectively been vacant for some time, he said, "I think the city and CentreVenture have a good plan about redeveloping the whole core of the downtown. I am a true believer in downtowns. I am an urban guy."

But Germain said the key for downtown development in Winnipeg is to get more people living downtown.

"That is the key," he said. "I just spoke with the mayor and my message to him was, he has to bring residential downtown to make the city alive 24 hours a day. That's very important."

The Germains have already built five upper-end Hotel Le Germain boutique hotels -- two in Toronto, one in Montreal, one in Quebec City and one in Calgary -- and two ALT hotels, in Montreal and Quebec City. There is another ALT Hotel under construction near the Toronto's Pearson airport.

Germain said they plan to build 10 more ALT hotels in the next five years. In addition to the Winnipeg property, two more will be announced in the next few months, he said.

The ALT Hotel brand features a fixed-rate price, likely to be between $130 and $150 a night. The word is that they are three-star hotels with four-star service.

Chipman said he is in discussions with a national restaurant chain and a sports bar, one or both of which would go in the main floor of the commercial space.

Stantec, the Edmonton-based architecture/engineering/consulting firm that will design the new building, will move about 250 people into 50,000 square feet of it.

Eric Wiens, head of Stantec's Winnipeg operations, said the decision to move downtown from its three suburban locations puts it in closer contact with many of Winnipeg's development players.

He said the firm will take enough space to allow it to grow even larger.

The 450-stall parkade will be built on Hargrave Street and connected to the office building. Chipman said it might include retail space at street level.

Down-at-heels block revitalized


What will be demolished:

-- A&B Sound building.

-- Most of the Mitchell-Copp building immediately west of A&B.

-- Wild Planet building north of A&B on Donald Street.

-- The four-storey Norlyn Building on Hargrave Street, north of the laneway, to make way for the parkade. (Jeoff Chipman of Stevenson Group Inc. said tenants of that building, including the famous Wagon Wheel restaurant, are all on one-year leases and have recently been informed of the plans. He said efforts will be made to find a new home for the Wagon Wheel and other tenants.)


What will stay:

-- A government building north of the Wild Planet.

-- Facade of the Mitchell-Copp building.

-- Alabama strip mall on Ellice Avenue (although Chipman said discussions are underway about future development there, including the possibility of residential development).

-- Dayton Building, home of FourPlay sports bar, is not part of the development and will stay, as will another small retail building on Portage Avenue immediately east of FourPlay.

History of the project:

CentreVenture's Ross McGowan said the moment of truth regarding the fate of one of Portage Avenue's most troubled blocks arrived a couple of years ago.

Although A&B Sound went bankrupt and the store closed, the company retained the real estate. When it was about to lease the building to a third-tier discount retailer, CentreVenture stepped in and bought it for about $2 million.

A couple of years earlier, Forks North Portage bought the Mitchell-Copp building for about $450,000, in an attempt to save it from the same sort of fate.

The two groups agreed to package the land in hopes of finding a developer to repurpose the property.

Meanwhile, Mariette Mulaire, CEO of Agence nationale et internationale du Manitoba (ANIM), the province's francophone trade agency, was pitching Groupe Germain to build a hotel along the newly redeveloped stretch of Provencher Boulevard. Mulaire persuaded Germain to come to Winnipeg more than two years ago.

He toured St. Boniface but became intrigued by downtown.

Mulaire got Bill Morrissey of Yes! Winnipeg to talk to Germain. Eventually, a Yes! Winnipeg official and McGowan went to Montreal and got Germain talking about the Portage development.

Meanwhile, Jeoff Chipman had been thinking about ways to deal with the north side of Portage since the day his brother Mark opened the MTS Centre six years ago.

He started assembling land and acquired the Wild Planet building on Donald, the Alabama retail strip on Ellice and the Norlyn office building on Hargrave.

Mulaire says the Germains are the Chipmans of Quebec: "humble, very smart business people and good community members."

The two families discovered they had shared relationships with associates. They hit it off and figured out how to make the property work for both developer families.

Republished from the Winnipeg Free Press print edition June 29, 2011 B6

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