$18.5 M to redo roads for IKEA

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This article was published 17/12/2008 (6320 days ago), so information in it may no longer be current.

The city and province will spend up to $18.5 million to redo recently completed roads to ensure Bergsbo bookcases and Bjursta cabinets can be sold at a Winnipeg IKEA store that will be one of the furniture giant’s largest in Canada.

As early as 2011, the Swedish-founded chain plans to build a 350,000-square-foot retail store to serve as the anchor tenant for a 1.5 million-square-foot retail development at the southwest corner of Kenaston Boulevard and Sterling Lyon Parkway.

Winnipeg Mayor Sam Katz called the $400-million development "a big win for the city," while Manitoba Premier Gary Doer said it represents "a great step forward."

IKEA has been looking at the Winnipeg market for "quite a long time" before deciding to place its 12th Canadian store in the Manitoba capital, spokeswoman Madeleine Lowenborg-Frick said from the company’s headquarters in Burlington, Ont.

"Our expansion strategy is a very carefully planned strategy, based on long-term planning," she said, adding the 60-year-old company is not deterred by the prospect of expanding in the midst of a declining economy.

"Nobody is recession-proof, but I can tell you IKEA is a company that survives tough times, because our price points are so good."

IKEA’s $400-million investment in Winnipeg would provide the city with approximately $2.9 million worth of property taxes every year, said Phil Sheegl, Winnipeg’s deputy chief administrative officer

That means the city could recoup its maximum roadwork investment of $10.5 million within four years. The province will spend up to $8 million on roadwork, but Doer declined to say how quickly that could be recouped through sales and income taxes.

The combined government contribution of $18.5 million will be used to widen Kenaston Boulevard and Sterling Lyon Parkway, Doer and Katz said in a joint statement, claiming both projects are part of Winnipeg’s long-term infrastructure-spending plans.

Doer said Kenaston will be widened between Taylor Avenue and Lowson Crescent, a 1.25-kilometre stretch that includes the recently completed Kenaston Underpass, which was built to easily accommodate two more lanes.

Sterling Lyon Parkway, another recently built road, will be widened west of Kenaston, said Barry Thorgrimson, Winnipeg’s economic development manager.

The IKEA-led development will hasten the work on both streets, the mayor and premier said.

"Originally we were going to spend money in and around Waverley West," Doer said. "We are advancing money that would have already spent in partnership with the city of Winnipeg to accommodate this new and exciting announcement of IKEA. It’s not something more than we had planned to spend."

But the widening of both roads does not appear in any of Winnipeg’s roadwork plans, including Winnipeg’s capital budget or long-term planning document Plan Winnipeg, which critics say is obsolete anyway. The Doer government has also rarely made public reference to Kenaston as one of the projects it’s eyeballing for upcoming capital funds.

City spending plans approved by council on Tuesday only call for Kenaston to be widened north of Taylor Avenue. The southern portion of Kenaston south of Grant does not need to be widened until about 20 years after families begin to move into Waverley West, according to a traffic study conducted in 2003 as part of the case to build the new suburb.

But city and provincial planners say growth in south Winnipeg has exceeded expectations. That growth, plus the unexpected arrival of IKEA, forces the city to widen Kenaston sooner than planned.

"We need to respond to what’s happening," Thorgrimson said.

Traffic volumes on Kenaston have actually dropped over the past decade, countered green planning consultant Ken Klassen, claiming city traffic counts show a decline in Kenaston congestion since the Charleswood Bridge opened in 1995.

Before any roadwork can go ahead, industrial land at the proposed IKEA site must be rezoned for commercial use, said city manager Thorgrimson. The site is the only patch of land in Winnipeg large enough to support the development, he said.

Once permits are approved, it typically takes IKEA 18 months to build a store, said spokeswoman Lowenborg-Frick. If all goes well, the store should be up and running between 2011 and 2013, she added.

Winnipeggers have already waited years to see an IKEA store, Katz said.

"Ever since being mayor, I’ve gotten many e-mails. The top e-mail is from people saying ‘We’d love to see Winnipeg have an NHL franchise again,’ " Katz said. "The one right behind that is how people talk about IKEA coming to Winnipeg."

bartley.kives@freepress.mb.ca maryagnes.kives@freepress.mb.ca