Mayor Sam Katz is vowing to get rid of some of downtown's surface parking lots now that the Winnipeg Parking Authority has tens of millions to spend on new parkades and other parking facilities.
On Wednesday, city council approved the sale of the Winnipeg Square Parkade for $24 million and pledged not to spend the money until parking officials complete a downtown parking strategy that's expected to call for new parkades, most likely on the east side of the Exchange District or adjacent Portage Avenue.
The sale to Toronto's Crown Realty Partners, which owns Winnipeg Square mall and Commodity Exchange Tower that sit above the parkade, will earn the city $23.6 million, after about $400,000 in real-estate fees are paid to Shindico, the Winnipeg firm that brokered the deal.
While some of the cash will likely be used to eliminate the parking authority's $9 million debt to the city - a debt racked up due to the city's former habit of raiding the special operating agency's profits every year - and some money will likely be spent to fix the Millennium Library and Civic Centre parkades, Katz and downtown development chairman Justin Swandel said some of the Winnipeg Square windfall should be used to devoted to build parkades or mixed-use structures on surface lots.
"When I drive around the city and see all these surface lots in our downtown, I'm not a happy camper. I believe and I know there are opportunities to do something," Katz told reporters outside his office.
Right now, the private sector has little incentive to build parkades in surface lots due to the gap between the cost and short-term profits. Katz said the city should provide development incentives for surface lots, but said he does not support punitive measures such as taxing empty lots at the rate of their highest and best use.
That practice sparked a high-profile dispute between the city and Riverside Park Management, a non-profit organization that sublets city land to the Katz-owned Winnipeg Goldeyes, when it was applied to a Waterfront Drive parking lot back in 2005.
The mayor's pledge to eliminate surface lots was met with both enthusiasm and skepticism from his council opponents.
"We should be getting rid of surface parking lots, but that's something we should have been doing years ago, and I didn't hear that coming from these people until they got embarrassed they were selling off this asset," said Fort Rouge Coun. Jenny Gerbasi, referring to the Winnipeg Square Parkade
Wednesday's parkade sale was approved by a 10-4 council vote at the end of a snippy, five-hour session that initially saw Gerbasi and other opposition councillors use procedure to push the last-minute plan, which was only approved by council's downtown development meeting on Monday, off the council agenda. To get around the tactic, Katz called a special meeting for the very same afternoon.
The debate itself amounted to what St. Vital Coun. Gord Steeves called a philosophical argument over what constitutes a core city service, with sale proponents arguing downtown will be better served by an influx of cash - and opponents arguing the parkade is indeed a "gold mine" that can deliver long-term profits.
This year, the parkade contributed $1.8 million to the Winnipeg Parking Authority's bottom line, but next year's profit was expected to be closer to $200,000, due to scheduled maintenance. Estimates for the parkade's long-term repair tab vary between $2.5 million and $12 million, with the parking authority and private appraisers on opposite ends of the spectrum.
After the debate, St. Boniface Coun. Dan Vandal questioned the $400,000 real-estate fee paid out as part of the deal, noting that buyer Crown Realty was not difficult to identify, given that it already owns the mall and office tower above the parkade.
"I don't understand the exorbitant fees we pay private realtors. I don't think it's necessary," he said.
Shindico's fee amounted to 1.7 per cent of the sale price. Commercial real-estate experts say that rate is hardly exorbitant, even though $400,000 is a huge commission in Winnipeg.
Big deals at city hall
Major decisions made by city council on Wednesday:
Winnipeg Square Parkade: Council voted 10-4 to sell the downtown parkade to Toronto's Crown Realty Partners for $24 million. Couns. Jenny Gerbasi (Fort Rouge), Harvey Smith (Daniel McIntyre), Lillian Thomas (Elmwood) and Dan Vandal (St Boniface) opposed the sale.
Police headquarters: Council voted unanimously to purchase the Canada Post building (above) on Graham Avenue for $30 million and then spend $105 million to renovate the 10-storey structure for use as a new police headquarters.
Water and sewer rates: Council voted 10-4 to raise water-and-sewer rates by 2.7 per cent next year, which amounts to an extra $21 for the average Winnipeg household. Couns. Jeff Browaty (North Kildonan), Smith, Thomas and Vandal voted against the rate hike.
City auditor: Council deferred a debate about whether city auditor Brian Whiteside should report to council instead of both politicians and CAO Glen Laubenstein. Executive policy committee will now deal with the question and also re-examine who will oversee city clerk Richard Kachur.
Police advisory board: Council voted unanimously to dissolve the Winnipeg Police Advisory Board as a prelude to the creation of a civilian police commission, as ordered up by the province.
Henderson Library: Council voted 10-4 to expand Winnipeg's second-busiest library and keep it in a North Kildonan stripmall until 2029 by signing a $9 million deal with real-estate company Shindico. Couns. Gerbasi, Smith, Thomas and Vandal opposed the lease extension.