Former Canada Post tower dragging down city finances
Eleven-storey building has big expenses, almost no tenants
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Hey there, time traveller!
This article was published 02/06/2016 (3423 days ago), so information in it may no longer be current.
The city’s purchase of Canada Post’s former Graham Avenue tower is contributing to a budget deficit.
Coun. Marty Morantz, chairman of the civic finance committee, said on Thursday that because the building has almost no tenants, paying rent accounts for almost half of the deficit of $4.8 million the city is currently projecting it will tally by the end of the year.
But Morantz admitted that, while the city forecasts deficits at the end of its first quarter, it usually makes up ground before the end of the year and ends with its finances in the black.
“We have to balance our budget,” he said following the committee meeting.
“This is just a projection. It does tend to improve historically.”
It is the second year in a row that the Graham Avenue tower has been cited as putting the city in a deficit position early in the budget year.
The city bought the tower, along with the former Canada Post warehouse behind it, for $29.25 million in 2009, to relocate the Winnipeg police headquarters into the warehouse. The entire bill to renovate the building and move police there is now more than $214 million.
The city sent out an expression of interest in April to see if anyone wants to lease or sell the tower. Canada Post still has a postal outlet on the first floor of the 11-storey building.
The city has said the Winnipeg police will get final say on approving submissions because police have expressed concerns a potential tenant could use the site to spy on them,
At this time last year, the city projected a $2.6 million deficit. But by the end of the year, the city was $16.3 million in the black. It was a similar situation in 2014, when the city was projected to be in the red by $21.4 million, but by the end of the year it posted a $700,000 surplus.
The year 2013 saw $12.1 million in a projected deficit before rebounding to a $1.8 million surplus. 2011 saw a deficit projection of $13.9 million become a $9.7 million surplus.
Even 2012, which projected an actual surplus of $2.4 million after the first quarter, saw a larger surplus of $15.9 million by the end of the year.
The rest of the forecast deficit is made up of other departmental expenses higher than predicted and revenues lower than predicted.
kevin.rollason@freepress.mb.ca
Kevin Rollason is a general assignment reporter at the Free Press. He graduated from Western University with a Masters of Journalism in 1985 and worked at the Winnipeg Sun until 1988, when he joined the Free Press. He has served as the Free Press’s city hall and law courts reporter and has won several awards, including a National Newspaper Award. Read more about Kevin.
Every piece of reporting Kevin produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.
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Our newsroom depends on its audience of readers to power our journalism. Thank you for your support.
Kevin Rollason is a general assignment reporter at the Free Press. He graduated from Western University with a Masters of Journalism in 1985 and worked at the Winnipeg Sun until 1988, when he joined the Free Press. He has served as the Free Press’s city hall and law courts reporter and has won several awards, including a National Newspaper Award. Read more about Kevin.
Every piece of reporting Kevin produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.
Our newsroom depends on a growing audience of readers to power our journalism. If you are not a paid reader, please consider becoming a subscriber.
Our newsroom depends on its audience of readers to power our journalism. Thank you for your support.
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Updated on Thursday, June 2, 2016 4:28 PM CDT: Writethru