Hey there, time traveller!
This article was published 19/4/2009 (3925 days ago), so information in it may no longer be current.
It turned out to be much ado about nothing.
The provincial government has mothballed a plan to relocate a Manitoba Infrastructure and Transportation (MIT) department office from the Polo Park area to the downtown.
And it did so because it felt the rental rates being quoted by nine downtown landlords and developers were too rich.
"We rent a lot of space in the downtown... and we have a pretty good picture of what a government client can get," Chris Hauch, assistant deputy minister of the department's accommodation services division, said in an interview Friday.
"When we looked at the sites, all across the board, it was our view these (rental) rates were a fair bit higher than we should be paying in the downtown," Hauch said.
"We feel a very strong responsibility to the public... and we're not prepared to pay more than we feel we have to."
But while it has rejected those nine proposals, Hauch said the department remains committed to the idea of relocating its office at 1700 Portage Ave. to the downtown, moving about 100 employees to the core.
Ideally, it would like to consolidate it with two other smaller downtown offices at a single, 42,000-square-foot location. And that's what it specified in the request for proposals (RFP) it issued late last year.
But since it didn't get an offer it could live with, it has cancelled that RFP and is reconsidering its options.
Hauch said one option would be to issue a revised RFP. But he couldn't say if or when that might happen.
"Not tomorrow and not the next day. But I could see us going back out into the market (at some point)."
Because government departments are highly coveted tenants, the original RFP attracted a lot of interest from downtown landlords and developers.
Spokesman for several of the groups that submitted proposals said Friday they were both surprised and disappointed by the department's decision to cancel the RFP.
But Joe Diner, a commercial real estate agent with DTZ Barnicke Winnipeg, was philosophical about his client — United Equities Group — not getting the MIT contract.
"Everybody knows this is the nature of the beast. You do this work on spec and you can't get morally outraged (if you don't get the contract)."
The spokesmen said a lot of money and time — hundreds of hours in some cases — went into drawing up the proposals. And it was obvious the department had also put a lot of effort into drawing up its RFP, so they assumed it would proceed with the move.
They said the letter they received late last week didn't explain why the department was cancelling the RFP.But several of them, including Bob Downs, development manager for Shindico Inc., and Scott Stephanson, president of Longboat Development Corp., said they suspected it was because it didn't like the rental rates being quoted.
Shindico and Longboat both offered to build a new office building in the downtown specifically designed for MIT — Shindico's would have been built at Notre Dame Avenue and Ellen Street, and Longboat's at St. Mary Avenue and Good Street.
Both of those proposals are dead, although Stephanson said Longboat would still like to build an office building if it can find another tenant.
The cancelling of the RFP also means CentreVenture Development Corp. is essentially back to square one in its efforts to redevelop one of the city's most visible symbols of downtown decay — the six-storey Avenue Building at 265 Portage Ave.
MIT is the kind of anchor tenant needed to kick-start that project, and CentreVenture officials had hoped its proposal would be accepted.
However, Diner said United Equities Group's multimillion-dollar plan to convert another downtown heritage building — the 11-storey Brick's fine Furniture building at 111 Lombard Ave. — into office space will proceed, even without MIT.
"It (not getting the MIT contract) can't kill the project," he said. "These guys (United Equities Group) are committed (to proceeding)."
Diner said he's only been involved in one other case in the last 30 years where a government department backed out of a proposed office deal after issuing a request for proposals. That was in the late 1980s or early '90s and involved a federal government department.
"So it's rare, but it happens," he said.
Know of any newsworthy or interesting trends or developments in the local office, retail, or industrial real estate sectors? Let real estate reporter Murray McNeill know at the email address below, or at 697-7254.
The province has decided not to proceed with the proposed relocation of suburban government offices to the downtown, even though nine downtown landlords and developers had responded to its request for proposals for the 42,000 square feet of space it would have required. Here's what spokesmen for some of the groups had to say about the decision:
— "We all assumed they were serious (about relocating) because we all spent a lot of money putting them (the proposals) together." — Bob Downs, development manager for Shindico Inc., the developer behind a proposal for a building at 395 Notre Dame Ave.
— "We're disappointed the process didn't have an outcome where there was a successful proposal." — Scott Stephanson, president of Longboat Development Corp., which proposed a building on St. Mary Avenue.