Police tower could be partly scrapped

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This article was published 11/12/2015 (3597 days ago), so information in it may no longer be current.

The City of Winnipeg could mothball or partly demolish the former Canada Post tower if it can’t sell, lease or otherwise fill the building it bought as part of its new police headquarters project.

In 2010, the city spent $31 million to buy the six-storey former Canada Post warehouse on Smith Street and the 10-storey adjoining tower on Graham Avenue. The warehouse was converted into the new home of the Winnipeg Police Service at an additional cost of $183 million, or about $80 million more than the original budget.

The city once planned to recoup $18 million by selling the tower, whose tenants once included federal offices. Now, 110,000 square feet of commercial space sit empty within the 160,000-sq.-ft. structure, which was losing the city $200,000 a month in June.

Property officials said at the time it would cost millions to make the tower palatable to a buyer. The building requires asbestos abatement on several upper floors and also needs new carpeting, a common area, elevators and HVAC systems.

The tower has also suffered from the loss of exterior panels during a windstorm, the absence of electrical power after a rainstorm and the lengthy delay in opening the police headquarters, employees of which would make retail operations on the skywalk level more viable.

Now, city property staff is deciding the fate of the tower. If a market study determines a buyer or potential tenants exist, the city could invest in the building and then sell it or lease out the space.

Other potential options include moving city offices into the tower, demolishing some upper floors or mothballing the 45-year-old building altogether.

“If there isn’t a market with third parties, to purchase or lease, we’d be looking at civic reuse, we’d be looking at potential partial demolition. We’d also be looking at possibly mothballing the tower,” said Brad Erickson, the city’s municipal accommodations manager.

“Those are all technical options. Some of them have very good strengths. Others, we already know have limited strengths.”

Erickson said a final recommendation will come before council in January or February. That recommendation will be based on how much demand exists, internally and externally, for office space in a downtown Winnipeg, where several new projects, including the forthcoming Manitoba Liquor & Lotteries headquarters, will add to the office-space inventory.

“We have to determine just what the demand would be,” Erickson said. “We won’t really know, until that process is complete, whether a tenant is ready to move into the building.”

Winnipeg planning, property and development director John Kiernan said while demolition is the least desirable outcome for the former Canada Post tower, the potential costs involved in refurbishing the structure require the city to consider all options.

“Whatever happens with the building — public or private — there’s going to have to be an investment,” Kiernan said.

In addition to ongoing maintenance and storm repairs, the city has spent $533,000 renovating the tower, using funds from the Winnipeg police headquarters budget.

The money moved an optometrist office from the main floor to the skywalk level because of changes to the loading-dock configuration, and built a fire escape for the optometrist and a neighbouring Subway franchise.

Both of those tenants, along with an independent coffee shop, remain in the tower. A Starbucks franchise will move in shortly, Kiernan added.

With two-thirds of the building empty, the city no longer expects to get $18 million from the sale of the tower. Kiernan said that figure was based upon complete occupancy and confirmed no building analysis was conducted before the city acquired the tower.

bartley.kives@freepress.mb.ca