Portage Place developer raises Ottawa funding demand
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This article was published 02/03/2021 (759 days ago), so information in it may no longer be current.
OTTAWA — The Trudeau government says a Toronto-based developer waited until the 11th hour to drastically increase its demands for federal funds to revitalize Portage Place mall in Winnipeg.
Amid mounting pressure to get some sort of deal approved, Manitoba federal cabinet minister Dan Vandal said Starlight Investments went from asking for $20 million to a whopping $50 million in cash, plus a $243-million loan.
“I found out about it, about 10 days ago,” Vandal told the Free Press on Tuesday.
“That’s going to make a difficult negotiation even more difficult.”
A Starlight spokeswoman suggested this wasn’t the full story, but did not provide a response Tuesday.
The federal NDP said the deal should not have drawn out this long in the first place.
On Monday, Starlight declared its $400-million proposal to redevelop Portage Place was in jeopardy, after Ottawa passed the March 1 deadline the firm set for the feds to commit $20 million to the project.
If approved, the proposal is to create 500 housing units and almost 500,000 square feet of office and retail space in the city centre.
Winnipeg city council approved a $20-million incentive package to support the project, while the province has promised a $28.7-million education tax rebate.
Starlight previously said it needed a federal commitment to make the project feasible by last August, but postponed that deadline twice.
On Monday, the company told the Free Press the firm can’t justify another deadline extension to its shareholders, without a clear timeline on when federal cash is coming.
In multiple recent queries, Ottawa gave no explanation for the hold-up — until Tuesday, when Vandal told media about the increased funding request.
“The late augmentation of the financial request was a surprise to everybody, especially to me,” said the Liberal MP for St. Boniface—St. Vital.
He noted the firm is asking the Canada Mortgage and Housing Corp. for a quarter-billion-dollar loan, and still hasn’t provided all the information Ottawa requested months before the “arbitrary” March 1 deadline.
“We’re relying on the public service to do their due diligence, and they’re waiting on very precise information from Starlight,” he said. “Those are huge sums of dollars in a middle of a pandemic, and we just need to do our homework.”
The mall functions as a community drop-in, on a stretch of Portage Avenue grappling with the loss of workers commuting to downtown amidst the COVID-19 pandemic, as well as the recent mothballing of the former flagship Hudson’s Bay Co. building.
NDP MP Leah Gazan (Winnipeg Centre) represents the area, and questioned why Ottawa was demanding more information on a deal the city and province deemed good enough.
“I do not buy that argument,” said Gazan, speaking before Vandal revealed Starlight had more than doubled its original $20-million demand.
“I don’t think that’s too much to ask, particularly with the level of corporate bailouts we’ve seen from this Liberal government.”
Gazan noted a report last month by the Parliamentary Budget Officer, which found scant progress from the national housing strategy since its 2017 launch. The report found Winnipeg has the highest number of Indigenous people who are inadequately housed in the country.
She said federal underfunding is visible in the homeless camps around the city and the recent emergence of trench fever, a disease rarely seen on this continent.
“Whatever is going on with the developer, I am focused on the federal government and their continual failure to provide proper support,” Gazan said.
Vandal dismissed the criticism, noting the recent $12-million announcement to retrofit buildings and create 88 affordable housing spots, and said more announcements were in the works.
“That’s typical NDP banter from the cheap seats,” Vandal said.
“The NDP seem to think there’s a magic wand we can waive, and just make all the problems go away, but there’s not. It’s just — put your nose to the ground and work in good faith,” he said.
“If this project has legs, and it merits it, then it’s going to survive. And I hope that it does.”