Winnipeg Free Press - PRINT EDITION

Aqua Books' move stalled

Building owner involved in dispute

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OVER the past year, Aqua Books owner Kelly Hughes has endured the breakup of a longtime marriage, the near death of his business and a restructuring that saw him move away from book sales to focus on live music and hosting other events.

The key to his recovery was the sale of his 8,400-square-foot building on Garry Street and a pending move into a 2,400-square-foot space in the basement of a Princess Street condominium building.

Hughes claims the move -- and the recovery of Aqua Books, which hosts approximately 400 events a year -- is threatened by a legal dispute between the building's owner and CentreVenture, the city's downtown development agency.

A decade ago, CentreVenture and developer Pat Hitchcock reached a tax-credit deal to convert a warehouse building at 123 Princess St. into condos and commercial space. The deal was among the first in the west side of the Exchange District.

CentreVenture is attempting to foreclose on the basement unit, while Hitchcock has counter-attacked with a breach-of-contract lawsuit.

Hughes said he's caught in the middle and is unable to renovate the space or otherwise prepare to move due to the uncertain nature of the space's ownership.

"I've just crawled out of this hole. I hit rock bottom and I'm on my way up," said Hughes, describing his difficult personal and financial year. "Now we're in a bit of a holding pattern. If we can't sort this out, we'll have to cancel some shows."

The shows in question are Winnipeg International Jazz Festival dates that would serve as an important infusion of cash into Hughes's business. Renovations must be complete before the end of June.

CentreVenture president and CEO Ross McGowan said he'd be happy to speak to Hughes "when and if" the entrepreneur chooses to contact the agency.

"We would very much like to see Aqua Books in the area," said McGowan, referring to the Exchange District. But he offered little comment about the dispute with Hitchcock.

"We are continuing our efforts to recover public funds and will defend his frivolous suit vigorously," McGowan said.

The dispute between CentreVenture and Hitchcock dates back to the original development of 123 Princess St., a warehouse once infamous for holding 1990s raves within earshot of the Public Safety Building, Winnipeg's main police station.

Hitchcock purchased the building in 1999 but soon ran out of renovation funds.

He said he reached a funding deal with original CentreVenture director Annitta Stenning but failed to document it well.

Following Stenning's departure, CentreVenture was restructured and Hitchcock said he didn't hear from the agency for three years. In 2009, the agency began the foreclosure process by seeking $130,000 in unpaid principal and interest.

Subsequent attempts at reaching a settlement failed, leading to Hitchcock's breach-of-contract lawsuit.

"I haven't done the perfect job on this development, but I have done the best I could," he said. "They're using smoke and mirrors to try to bully me."

Hart Mallin, a Winnipeg developer who attempted to serve as an informal mediator between Hitchcock and CentreVenture, said the organization is within its rights to attempt to recoup public funds -- but should still find a way to be flexible.

"This is what happens when situations are allowed to go on for so long," said Mallin, who blames personalities on both sides for exacerbating the conflict.

"Now we are in a situation where a perfectly legitimate outside party is being compromised."

Hughes just wants to move into his venue. "There's a lot of things we do that would not happen anywhere else," he said.

Republished from the Winnipeg Free Press print edition April 9, 2012 B1

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