Kelly House, which has stood in the Exchange District since the early 1880s, will remain at 88 Adelaide St. after its owners struck a deal with the city's downtown business development agency.
Adelaide Investments Ltd., owned by Winnipeg's Rich family, announced the 14-year agreement with CentreVenture Development Corp. that would see $450,000 in renovations done on Kelly House and the building become the new headquarters of Heritage Winnipeg, an agency that promotes the restoration of the city's heritage housing stock.
"We're very pleased with it," said CentreVenture president and chief executive Ross McGowan.
And yet, in reaching the agreement, CentreVenture and Adelaide warned city councillors Tuesday that there should be a review of the historical and derelict buildings bylaws.
The two pieces of legislation, they said, nearly led to Kelly House's destruction and they could do the same to many other aging but significant properties.
"Things don't work in sync together to maximize our kind of building," said Cindy Tugwell, Heritage Winnipeg's executive director.
The vacant and derelict buildings bylaw was introduced in 2004 in response to a rash of arson cases and meant to limit the number of rundown buildings that could be targeted by vandals.
The historical buildings bylaw, meanwhile, limits the kind of changes a building's owner can make to the structure and is meant to save buildings from the wrecker's ball.
Three months ago, the survival of Kelly House was in doubt.
The brick building, dwarfed by neighbouring warehouses, had been vacant for almost a decade and was in serious disrepair. City engineers had noted problems with the brick exterior and the plaster, flooring and woodwork inside.
The city found the Rich family in violation of the derelict buildings bylaw and ordered the Kelly House owners to make repairs.
But the cost would be so high, the Rich family said it could not recoup its investment. Instead, it asked the city to delist Kelly House as a heritage property and allow demolition.
The move sparked an outburst from the community. Even a Winnipeg author, who had used the house as the setting for a series of books for young adults, joined activists at city hall to protest the owners' plans.
That author, Rae Bridgman, was back at city hall Tuesday and happy about the new agreement.
However, real estate broker Lorne Weiss, speaking for Adelaide, told members of the city's property and development committee that the historical and derelict buildings bylaws had to be reviewed and made to work better in tandem.
"Certainly, there has to be an inventory of some of the older building stock," Weiss said.
Tugwell and McGowan agreed.
"We need to find a way to provide proper incentives (for people to refurbish derelict historical buildings)," McGowan added.
Tugwell suggested the city form a group to discuss ways of reducing derelict properties but making historical building conservation more feasible.
CentreVenture and Adelaide Investments, the building's owner, will each put up $100,000 towards the renovation. The rest will come from the city in the form of a loan, to be paid off by the end of the 14-year agreement.