Water-park cash for luxury hotel?

The only developer interested in building a water park with the help of a $7-million city grant wants to use the public money to erect a $64-million luxury hotel, the Free Press has learned.

For the past two years, the city has been trying to hand $7 million to a private company willing to build a 70,000-square-foot water park that would be open to the general public. The city initially awarded the grant to the Canad Inns hotel chain in 2008, but withdrew the offer this year after Mayor Sam Katz grew impatient with the lack of progress on a $43.6-million facility proposed for Polo Park.

The city launched a second search for a would-be water-park builder this spring and wound up with only one respondent. On Monday, city councillors were told that proposal involved a 2.4-hectare city parking lot at the southeast corner of Water Avenue and Waterfront Drive. The plot of land is best known as the source of a lengthy dispute over rent between the city and Riverside Park Management, a non-profit organization that sublets city land to the Katz-owned Winnipeg Goldeyes.

More details have now emerged from Monday's closed-door water-park seminar, where city councillors and other officials were asked to sign confidentiality agreements.

According to several sources speaking under condition of anonymity, the potential water-park proposal involves the construction of a $64-million "signature hotel" that would position itself at the high end of Winnipeg's hospitality market.

The proponent would purchase the city lot on Waterfront Drive for $7.7 million, thus immediately repaying the city for its $7 million investment, the sources said.

The hotel would be positioned across the street from the Canadian Museum for Human Rights, which is under construction on the east side of Waterfront Drive. This could present a land-use problem for city planners, as several parcels of vacant land in the vicinity of Water Avenue and Waterfront Drive have been touted as potential parkade sites to serve the museum, The Forks and Canwest Park.

During the closed-door seminar, city officials asked councillors whether they would prefer to shelve the luxury-hotel proposal and issue yet another search for a water-park partner - or continue to pursue the proposal on the table.

Councillors opted to have a luxury hotel plan head to council in the form of a written report, which will most likely be reviewed by St. Norbert Coun. Justin Swandel's downtown development committee.

On Wednesday, Winnipeg Mayor Sam Katz said he knew nothing about a luxury-hotel proposal. But the mayor said the city has learned a lot from its experience with Canad Inns and will now require any would-be water park builder to plunk down a $100,000 deposit that would not be refunded if the proponent walks away from a future deal.

The city is also demanding a 25-year community-access agreement that would ensure free or discounted water-park admissions for people with low or limited incomes, the mayor said.

The expenditure of $7 million -- the remnant of a $43-million recreation kitty created from the ashes of a cancelled rapid-transit plan -- is worthwhile to create a first-class water park, the mayor said.

"What we want to do is have a city that is attractive to all people. And in order to be attractive, you want vibrancy and you want excitement. A water park is part of that," Katz said.

Public funding for a water park is no different than government subsidies toward other major amenities, such as hockey arenas or football stadiums, he added.

The mayor's drive to build a water park has confounded critics on both the left and the right.

"Our streets are falling apart. We shouldn't be spending any money on water parks," said Colin Craig, the Manitoba director of the Canadian Taxpayers Federation. "What's next? Is the city going to decide we need a major-league baseball team, or Disneyland? Just because this city doesn't have things other cities have doesn't mean it's the city's role to take tax money and build those things."

Shauna MacKinnon, director of the Canadian Centre for Policy Alternatives, said she's concerned about public access to a private water park and thinks city recreation funds would be better spent on public facilities that don't charge any fees.

"We wouldn't support this anyway," she said of the water-park proposal. "We have all kinds of needs in this city that take precedence over luxury hotels."

bartley.kives@freepress.mb.ca

Republished from the Winnipeg Free Press print edition November 5, 2009 B1