True North, Southern Chiefs join forces in downtown projects as cost estimates jump
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Hey there, time traveller!
This article was published 12/12/2023 (1012 days ago), so information in it may no longer be current.
A new partnership is being celebrated as a critical step toward economic reconciliation, which is expected to transform two massive downtown projects and improve the lives of people who live near them.
On Tuesday, True North Real Estate Development and the Southern Chiefs’ Organization signed a memorandum of understanding to co-ordinate their projects at Portage Place mall, the site of a proposed True North redevelopment.
“This is what true economic reconciliation looks like. It’s First Nations communities, the people, the leadership working with… the leaders of corporate Canada,” said SCO Grand Chief Jerry Daniels.
Mark Chipman, True North executive board chairman (seated, left), and Jerry Daniels, Southern Chiefs’ Organization grand chief (seated, right), sign a memorandum of understanding at Portage Place on Tuesday. (Mikaela MacKenzie / Winnipeg Free press)
The chiefs’ organization is working on a multi-use development, called Wehwehneh Bahgahkinahgohn, which involves a major revamp of the former Bay building, located across the street from the mall.
Jim Ludlow, president of True North Real Estate Development, said the agreement will spark education, training, job and leadership opportunities, with a focus on First Nations’ inclusion.
Collaboration key to making deal work
A part owner of the Portage Place mall has welcomed a partnership tied to its potential transformation, while candidly talking about the challenges the shopping centre has faced.
“To be quite frank, it’s been a difficult period of time since we’ve owned this asset and it wasn’t for lack of effort … We put great energy, great energy into making Portage Place successful in this current footprint,” Avtar Bains, president of Premise Properties, told reporters.
A part owner of the Portage Place mall has welcomed a partnership tied to its potential transformation, while candidly talking about the challenges the shopping centre has faced.
“To be quite frank, it’s been a difficult period of time since we’ve owned this asset and it wasn’t for lack of effort … We put great energy, great energy into making Portage Place successful in this current footprint … What we didn’t realize when we purchased the asset is that the structure of the deal made it very difficult for anyone to make this work,” Avtar Bains, president of Premise Properties, told reporters.
Bains said Premise owns a minority stake in the building, through a real estate deal with the Vancouver-based Peterson Group.
He said even the ownership of the site complicated its future.
“You have a land lease, you have a sub-land lease, you have bridge agreements, you’ve got all sorts of things and in real estate having clear title, clean title, allows you and gives you flexibility to do things,” said Bains.
The ownership of the site will add some steps to True North Real Estate Development’s current proposal to redevelop the mall. For example, the company has asked for an extension on its option to purchase the land, which requires approval from the city, province and feds, who are all shareholders in The Forks North Portage Partnership.
That partnership owns the land, parking and “air rights” (to build upwards) at the site, while a separate agreement is needed to buy the mall itself.
Bains said the new collaboration should help the new proposal succeed.
“Finally, there’s sponsorship from a number of levels of government and private enterprise that have the skill set, the desire, the vision, the capital, the financing to do what we can’t do … So, we’re thrilled,” he said.
He recalled approaching True North about its interest in the property before Starlight Investments proposed a $400-million mixed-used project to develop the mall, shifting the focus elsewhere. However, the Starlight proposal fell through in 2021.
“We actually had called True North before we did the deal with Starlight and we couldn’t come to terms. But it’s a lot easier for True North to do a deal when the counter party is on their knees asking them to do so,” said Bains.
He made the blunt comments following a news conference to mark a new agreement between TNRED and the Southern Chiefs’ Organization to co-ordinate efforts to redevelop Portage Place and the former Bay building, respectively.
TNRED president Jim Ludlow noted the call from Bains sparked renewed interest in the mall, despite its large and “cumbersome” status, though he joked he was initially concerned about the challenge.
“If I take this forward this time, our group will definitely think I’m crazy,” Ludlow recalled thinking during the press conference, before adding: “So here we are.”
The mall opened in 1987 with high hopes of attracting shoppers to downtown.
Ludlow commended the mall’s owners for extensive work to make the massive retail structure a success but said the market proved “far too difficult.”
He said leaders behind the redevelopment of the mall and the nearby Bay building have committed “to advancing social, political and economic partnerships to reverse the current downward trajectory we are experiencing in Winnipeg’s downtown.”
— Joyanne Pursaga
The redevelopments of 1.2 million square feet at Portage Place and 600,000 square feet at the Bay will be geared to trigger “a meaningful social return on investment,” said Ludlow.
“Over the past seven months, we have developed a clearer understanding of our purpose at Portage Place. We now see it as a social redevelopment plan first, a real estate development second… both projects will be significant catalysts for the economic and social revitalization of downtown Winnipeg,” he said.
The plan will aim to fast-track affordable housing development at Portage Place, with the goal of ensuring half of the 210 to 220 housing units are both affordable and accessible, Ludlow said.
The cost of True North’s proposed redevelopment has jumped to $650 million, up from $550 million. SCO’s project is expected to cost about $200 million, up from the original price tag of $130 million.
“The capital spend on those two projects is almost $850 million. As would be expected, economic impacts for the Portage Place redevelopment are considerable… Combined, in this partnership, both Portage Place and the Bay produce $1.34 billion in total economic activity,” said Ludlow.
He credited the cost hikes largely to refined designs for the projects.
Both True North and SCO said they expect the initial elements of their plans to remain largely intact at this point.
“We haven’t changed a whole lot for (our project), as of yet, but we’re looking at what makes sense for the entirety of both the Bay and Portage Place,” said Daniels.
In May, True North’s real estate arm unveiled a proposal to replace Portage Place mall with a 15-storey health-care services tower, a 16-storey residential building, main-floor grocery store, community centres, office space for social agencies and other services. The atrium at Edmonton Street would be removed and replaced with an outdoor pedestrian greenway connected to Central Park, to the north.
In April 2022, SCO’s Wehwehneh Bahgahkinahgohn project proposal featured more than 300 affordable housing units, assisted living for elders, a museum, art gallery, retailers, restaurants, a health and healing centre and a daycare that would teach Indigenous languages.
Mark Chipman, executive chairman of the board for True North Sports and Entertainment and the Winnipeg Jets Hockey Club, said the project should help to address the poverty and social challenges which have plagued downtown for years.
“I believe we’re living amidst a humanitarian crisis in this city. Thousands of people suffering from mental health and addiction challenges are unsheltered every night. This project can be a part of the solution,” said Chipman.
He expressed hope the projects would go above and beyond reconciliation to help Winnipeggers view themselves “as one people.”
“We haven’t changed a whole lot for (our project), as of yet, but we’re looking at what makes sense for the entirety of both the Bay and Portage Place.”–SCO Grand Chief Jerry Daniels
Premier Wab Kinew said the agreement marks a “significant milestone,” which his government will support.
“It’s my belief that, in order for True North and Southern Chiefs to succeed… we need to invest in the human capital in the surrounding streets of downtown Winnipeg. Our provincial government will be there to address the issues of addictions, mental health, homelessness and public safety,” said Kinew.
Neither the premier nor Winnipeg Mayor Scott Gillingham promised new funding for the projects on Tuesday, though Gillingham noted the city does have tax break options that could be considered.
“All those details are yet to be determined. This is a really exciting day and this partnership is really going to lead the way for what we can do as far as transforming our downtown through the development of both projects,” said Gillingham.
The Portage Place redevelopment by True North Real Estate Development and Wehwehneh proposed development by the Southern Chiefs’ Organization Inc. (Supplied)
The Portage Place redevelopment by True North Real Estate Development and Wehwehneh proposed development by the Southern Chiefs’ Organization Inc.
Kate Fenske, chief executive officer of the Downtown Winnipeg BIZ, called the agreement “the collaboration that we’ve been wanting for years.”
Fenske noted attracting new residents to downtown would help boost the area’s economy.
“What businesses need right now are people downtown… more residents living downtown,” she said.
True North recently requested a six-month extension on its option to purchase the Portage Place property, which would extend the due diligence period to June 30, 2024.
If all goes as planned, the company hopes to start construction by the second or third quarter of 2024 and deliver the project by the end of 2027, said Ludlow.
Daniels said SCO is working on remediation efforts at the former Bay building, at Portage Avenue and Memorial Boulevard, and preparing for construction.
joyanne.pursaga@freepress.mb.ca
X: @joyanne_pursaga
Joyanne is city hall reporter for the Winnipeg Free Press. A reporter since 2004, she began covering politics exclusively in 2012, writing on city hall and the Manitoba Legislature for the Winnipeg Sun before joining the Free Press in early 2020. Read more about Joyanne.
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Updated on Tuesday, December 12, 2023 6:15 PM CST: Article text revised throughout.
Updated on Wednesday, December 13, 2023 1:50 PM CST: Adds fact box
Updated on Wednesday, December 13, 2023 1:58 PM CST: Adds photo, rearranges images
