A $212-million alabaster pachyderm?

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BORIS MINKEVICH / WINNIPEG FREE PRESS archives (WINNIPEG FREE PRESS) Photo Store

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BORIS MINKEVICH / WINNIPEG FREE PRESS archives (WINNIPEG FREE PRESS) Photo Store

While the term "white elephant" may be a little premature, the time has come for Winnipeggers to take a more critical look at CentrePort.

Four years ago this spring, Prime Minister Stephen Harper and former Manitoba premier Gary Doer announced $212 million in federal-provincial funding to build a road and overpass to serve what may eventually be a 20,000-acre transportation, trade and manufacturing hub.

In 2009, the inland-port idea made sense on paper. Congestion at the Port of Vancouver led a number of landlocked Canadian cities to consider building transportation hubs that would offer manufacturers and distributors easy, low-cost access to rail lines, highways and runways.

Regina went out and completed a new intermodal shipping facility to serve the Saskatchewan capital's Global Transportation Hub, which will also be served by an access road and a Trans-Canada Highway overpass west of the city.

In Winnipeg, CentrePort began making plans for real estate north of Richardson International Airport while crews completed CentrePort Canada Way, the $212-million roadway. CentrePort also began marketing land for industrial and commercial development, with the expectation it would be able to service this land with city water and sewer pipes.

That move was easier said than done, as much of what will eventually become CentrePort sits inside the Rural Municipality of Rosser. A long-held city aversion to extending services outside its borders led Winnipeg to consider simply annexing a corner of Rosser.

After a brief inter-governmental flap, the city and province agreed in 2010 to share the $17-million cost of extending water and sewer pipes to the CentrePort lands. But that has yet to proceed, pending the conclusion of a legal challenge from two northwestern Ontario First Nations, who argue the city has no right to move water from Shoal Lake outside its borders.

That challenge, initially brushed off as groundless by city lawyers, took on a much serious tone when the International Joint Commission wrote the city with a request for information.

Behind the scenes, senior city officials were also skeptical of CentrePort's ability to compete with other trade hubs, fearing the Winnipeg development does not have enough rail-handling capacity. Some tut-tutted about the fact CentrePort went out and marketed lands they do not own, without having servicing or zoning agreements in place.

Even basic drainage issues around CentrePort remain unsettled. Artificial lakes and wetlands, the devices that normally serve as stormwater retention ponds, cannot be built near Richardson Airport because open water attracts geese and ducks, which can bring down planes.

And on a political level, Mayor Sam Katz was annoyed that Doer funnelled so much of Ottawa's infrastructure funding to a project that was not one of his priorities. The devotion of $212 million to CentrePort was one of the factors that led Katz to lose interest in completing the second phase of the Southwest Transitway for almost three years.

All of these long-simmering tensions boiled over on Friday, when the trade hub's CEO accused the city of holding up the development -- and effectively dropped the gloves with city hall.

At a Winnipeg Chamber of Commerce gathering, Diane Gray said CentrePort has been losing business because of the city's inability to complete the servicing agreement.

"We have been turning away -- yes, turning away -- large-scale distributions centres and other significant investors who have been forced to look at other locations because we can't give them a firm timeline on servicing," she said. "Large, anchor-style tenants cannot be built at CentrePort."

Gray's comments are remarkable for a number of reasons. For starters, the city and province have no choice but to wait and see what the International Joint Commission determines before any water pipes can be extended outside Winnipeg's borders. Ignoring the IJC, which has the power to amend the terms of the city's agreement to use Shoal Lake water, would be a fantastically stupid move. The city and province have both been made aware of the consequences of running afoul of an agency set up to mediate international disputes over drainage issues.

"There are many ramifications that could have. They could cancel the order or hand out all kinds of penalties," said Deepak Joshi, the city's chief operating officer, who was in the audience when Gray spoke on Friday but declined to respond to her assertion the city is holding up the development.

"That would probably be unwise," he said. "Let's just say I was surprised at those comments."

Deputy Mayor Russ Wyatt was a lot less diplomatic as he delved into the broader context of the city-CentrePort dispute.

"Diane Gray should be looking at herself and her own team before she starts blaming the city. Every other developer is responsible for servicing and I don't know why CentrePort should be any different," the Transcona councillor said. "They're looking for excuses for their own failures and they're trying to point blame."

In Wyatt's view, CentrePort is little more than "a glorified, government-run industrial park" with a questionable business model.

"The original vision of CentrePort was to create a place for industry at a crossroads for transportation: roads, rail and air. So far, it's close to the airport, they spent $200 million building highways, but they haven't brought in rail at all," he said.

While fighting in public with the city definitely speaks to Gray's frustration, it doesn't mean CentrePort will turn out to be a boondoggle in the long run. There's no doubt the land will eventually be serviced. But it's time for the city's business community to stop cheerleading about the development and begin considering it for what it is: just one piece of the city's long-term economic plans.

Wyatt is correct in criticizing CentrePort for marketing lands without completing the land-assembly work or seeing through the land-use issues any other developer would be forced to shepherd through. And that's on top of failing to ensure services and drainage are in place for future businesses.

In government circles, "white elephant" is an ugly term. But unless CentrePort comes up with a business plan that inspires confidence from its partners at the city, it will forever be known as a $212-million alabaster pachyderm.

bartley.kives@freepress.mb.ca

Republished from the Winnipeg Free Press print edition February 17, 2013 0