Great Scott, conversion starts at last

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This article was published 22/08/2016 (3369 days ago), so information in it may no longer be current.

The conversion of a century-old, vacant South Main Street office building into micro-apartments is finally underway.

Winnipeg developers Mark and Shelley Buleziuk originally planned to redevelop the five-storey Scott Block at 272 Main St. into new office space, with some retail space on the main and mezzanine floors.

They opted to turn the top four floors into 36 small rental apartments, with either an office or retail tenant on the mezzanine level and two retail tenants on the main floor.

Although they hoped to start the work earlier this year, it was delayed.

“But now we’re finally underway,” Mark Buleziuk said.

The roof and polished concrete floors are finished, a new elevator has been installed and most of the windows have been replaced, he said.

The framing of the interior walls has begun, and crews are repairing or replacing some of the mortar on the exterior brick walls and repainting the side and back walls to match the front of the building.

“So we’re well into the project,” he said, adding they hope to have the apartments ready for occupancy by January or February.

Buleziuk said the only potential fly in the ointment is that their development is one of the projects earmarked to receive assistance under the second phase of the two-year-old city-provincial live downtown rental development program.

While the city has approved this year’s program, the new Tory provincial government hasn’t.

Buleziuk said he has invested his personal money into the project so the conversion work could get started.

“But at some point, I will need a second phase of financing to support the completion of the work,” he said.

He said if the tax-increment financing hasn’t been approved by then, he’ll have to obtain bridge financing to ensure the work continues.

“The problem is that (the delay in receiving provincial approval) is forcing me to go a different route that is going to be a lot more expensive,” he said. “But I can’t stop. I’ve got contractors in there, and I’ve made commitments.”

He said he’s been told the program has the support of the new provincial minister of indigenous affairs and municipal relations — Eileen Clark. But it still needs Treasury Board approval.

“It’s in the queue, from what I understand. But when it gets approved…nobody knows.”

He said he’s not the only developer losing sleep because of the uncertainty surrounding the program.

“I know it’s creating anxiety with quite a few developers right now because their projects may not get approved or may not close,” he said.

He wouldn’t reveal the names of the other developers.

Clark said her office has contacted some developers, and the government is aware they’re anxious to see the program go ahead.

“But we are new into office, and we definitely have had a backlog of projects and decisions that have to be made,” she said.

“Our premier and our government are very committed to getting the best value for our tax dollars for the people of Manitoba, and rightly so given the huge deficit that we have. So we want to make sure the decisions that we make going forward are solid and that they are in the best interests of the people.”

Clark refused to say when a decision will be made.

She also wouldn’t guarantee the program will be approved, saying that’s not up to her.

“But we are… committed to moving forward with everything as quickly as possible, in a positive way,” she said.

The Live Downtown program, which was launched in December 2014, is designed to stimulate the construction of 750 to 900 new rental apartments in the downtown by offering developers up to 20 years of rebates on any increase in the city or provincial property taxes they would have paid as a result of the redevelopment of their property. It replaced the former city-provincial Downtown Residential Development Grant Program, which provided $40 million in grants and tax incentives to developers of new downtown rental-apartment and condominium units.

The Buleziuks, who own the local boutique development firm Space2Work.com, are now thinking of converting the mezzanine level and the back of the main floor of their building into residential apartments, which would give them a total of 40 such units. That would leave just the front half of the main floor as retail space, and Buleziuk said they hope to know shortly if that’s the route they’ll go.

Most of the apartments will range in size from 400 to 600 square feet. Four of them will be affordable units, with the rents still to be determined. For the rest, rents will start at $800 per month. There will be no on-site parking for the residential tenants, but Buleziuk said there should be spaces available to rent in the nearby Winnipeg Square underground parkade.

He said he’d still like to see a small coffee shop open in one of the main-floor units, and maybe an insurance office or financial adviser’s office in the other.

“Even something like a cellphone store would be a great tenant on one side.”

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 204-697-7254.

murray.mcneill@freepress.mb.ca