July 12, 2020

Winnipeg
23° C, A few clouds

Full Forecast

Close this
Winnipeg Free Press

ABOVE THE FOLD

Subscribe

$70M offered for Portage Place

Toronto firm's redevelopment plan may include student housing

Hey there, time traveller!
This article was published 5/7/2019 (373 days ago), so information in it may no longer be current.

The potential sale of Portage Place to a Toronto developer with a reputation for turning around distressed properties has garnered positive reviews from city hall and the agency that owns the land the downtown shopping centre is built on.

Starlight Investments has offered the owners, a subsidiary of Vancouver-based Peterson Group, $22.9 million for the mall and a further $47 million to North Portage Development Corp., which holds the land lease and owns the parkade under 393 Portage Ave.

MIKAELA MACKENZIE / WINNIPEG FREE PRESS FILES</p><p>Portage Place mall</p>

MIKAELA MACKENZIE / WINNIPEG FREE PRESS FILES

Portage Place mall

"This is a significant reinvestment into our downtown, with a potential of $300 million coming in," said Clare MacKay, vice-president of strategic initiatives for The Forks (a subsidiary of North Portage), who was part of the team that briefed city councillors.

"It looks like this is a good deal for Winnipeg and for downtown, and a reinvestment in something that right now is not receiving any investment."

MacKay told reporters Starlight plans to invest up to $230 million, in addition to the purchase price, to redevelop the mall, including the possibility of constructing student housing.

Members of council were briefed on the possible sale at a closed-door meeting Friday.

"There’s a new investor kicking the tires and expressing interest in it, and that’s positive," Coun. Jeff Browaty said as he left the briefing.

Mayor Brian Bowman said he hoped a sale would lead to a turnaround for the downtown property that many residents view as a place to avoid.

"Right now, we have to acknowledge that Portage Place is not doing as much for our community as it could," Bowman told reporters.

"What I hear consistently from people is the fact that there are safety concerns in that area of the city and that mall. With investment comes opportunity, for not just a safer downtown, but also a reinvigorated north Portage area."

The potential deal would appear to be a risk for North Portage, which has been using revenue from the land lease and underground parkade to offset annual operating losses at The Forks.

However, Browaty and MacKay said, if accepted, the deal would allow North Portage to invest the $47 million — most likely with the Winnipeg Foundation — and use the interest income to cover any such shortfalls.

MacKay said any sale of the land and parkade has to result in maintaining cash flow to The Forks.

"Any deal we enter into at this point has to keep our organization whole," she said. "We’re taking parking revenue and land lease revenue (from Portage Place) and turning that into investment and interest revenue to keep The Forks North Portage whole."

The Peterson Group has been trying to sell the property for two years. The Free Press reported in August that interested buyers had been scared off because the shopping centre sits on land owned by the three levels of government (via the development corporation).

Portage Place was touted as the saviour of downtown Winnipeg when it was proposed, but its value has tumbled since opening in 1987 following the controversial expropriation of several small properties on the north side of Portage Avenue.

It was built by Cadillac Fairview at a cost of $92 million. Ten years later, it was sold for about $45 million, and then sold again in 2005 to the Peterson Group for about $20 million.

MacKay said Starlight Investment has a track record of turning around distressed properties across North America, adding she is confident if the deal goes ahead, the firm will do the same with Portage Place.

The North Portage board has unanimously approved the deal, MacKay said, and the agency is seeking approval from the three shareholders: City of Winnipeg, Province of Manitoba and the federal government.

Council is expected to vote on the sale at its July 18 meeting.

MacKay said similar requests have been made to Manitoba and Ottawa, which would allow Starlight to initiate its deep review and due diligence on the property and possible development scenarios.

If all three levels of government approve, MacKay said, she expected the sale would close by the end of the year.

Starlight Investments officials did not respond to a request for an interview, but a representative acting on the company’s behalf said, "A proposed redevelopment of Portage Place Shopping Centre presents an opportunity to be a transformative project for the city of Winnipeg. Starlight Investments is in the process of exploring this opportunity and will be providing updates to the public in the coming weeks."

aldo.santin@freepress.mb.ca

Your support has enabled us to provide free access to stories about COVID-19 because we believe everyone deserves trusted and critical information during the pandemic.

Our readership has contributed additional funding to give Free Press online subscriptions to those that can’t afford one in these extraordinary times — giving new readers the opportunity to see beyond the headlines and connect with other stories about their community.

To those who have made donations, thank you.

To those able to give and share our journalism with others, please Pay it Forward.

The Free Press has shared COVID-19 stories free of charge because we believe everyone deserves access to trusted and critical information during the pandemic.

While we stand by this decision, it has undoubtedly affected our bottom line.

After nearly 150 years of reporting on our city, we don’t want to stop any time soon. With your support, we’ll be able to forge ahead with our journalistic mission.

If you believe in an independent, transparent, and democratic press, please consider subscribing today.

We understand that some readers cannot afford a subscription during these difficult times and invite them to apply for a free digital subscription through our Pay it Forward program.

History

Updated on Friday, July 5, 2019 at 10:52 AM CDT: Replaces photo, fixes typo

12:02 PM: Updates the EPC will consider the deal next week.

5:17 PM: Final version

7:00 PM: Removes photo

8:04 PM: Adds photo

The Free Press will close this commenting platform at noon on July 14.

We want to thank those who have shared their views over the years as part of this reader engagement initiative.

In the coming weeks, the Free Press will announce new opportunities for readers to share their thoughts and to engage with our staff and each other.

You can comment on most stories on The Winnipeg Free Press website. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or digital subscriber to join the conversation and give your feedback.

Have Your Say

Have Your Say

Comments are open to The Winnipeg Free Press print or digital subscribers only. why?

Have Your Say

Comments are open to The Winnipeg Free Press Subscribers only. why?

By submitting your comment, you agree to abide by our Community Standards and Moderation Policy. These guidelines were revised effective February 27, 2019. Have a question about our comment forum? Check our frequently asked questions.