True North Square developers to reserve $200K for affordable housing

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This article was published 20/9/2018 (764 days ago), so information in it may no longer be current.

A last-minute deal on Winnipeg city hall’s funding for the True North Square project will see the developers redirect about $200,000 in municipal property tax refunds for affordable housing.

Couns. Cindy Gilroy and Jenny Gerbasi authored the amending motion, which will require True North Real Estate Development and Northland Properties to make annual cash payments equivalent to 10 per cent of the property tax refunds they’ll be getting on the two residential towers for five years.

The move only applies to municipal property taxes.

"I wish I could have a lot more money" for affordable housing, Gilroy (Daniel McIntyre) told council. "This is an opportunity for us to do something now. We will be doing more for affordable housing" in the future.

The amendment passed by a vote of 15-1, with only Coun. Ross Eadie voting against it. The amended funding agreement passed by a vote of 14-2, with Eadie and Coun. Jason Schreyer in opposition.

The $550-million downtown project is a partnership between True North Real Estate Development and Vancouver-based Northland Properties. True North is building the towers and the square on the east side of Carlton Street, while Northland is constructing a hotel and another residential tower on the west side.

An official opening of the square is set for Sept. 27.

City council had agreed in March 2017 to cover one-third of the $9-million cost of the public square, and spend $8.8 on the construction of skywalks linking the buildings to the convention centre, along with improved lighting, sidewalks and other streetscaping features.

The province is also contributed $8.8 million towards the public amenity spending.

According to financial data included in the administrative report to council, True North Real Estate is expected to earn about $4.8 million over 20 years in refunded municipal property tax refunds. Northland is expected to receive about $3.8 million over 20 years. Both projects will receive similar amounts from the provincial government.

Jim Ludlow, president of True North Real Estate Development, said the developers agreed to the city’s change.

"We are all part of advancing our downtown," Ludlow told a hastily-called news conference at True North Square, following the council vote. "If we trade a bit of something on our side for that, I think that’s OK."

Ludlow commended council "for sharing the vision we have for improving downtown Winnipeg... Collectively, we are trying to drive the city forward, and I would tell you it takes collective will to do that."

Dayna Spiring, president and chief executive officer of Economic Development Winnipeg, said she wanted to acknowledge the city leadership for approving funding for the project. However, she said it was unfortunate the council debate turned into a forum for a discussion on affordable housing.

"Investments like this create a broader tax base. Investments like this make it possible for us to do all of the other things that have to happen," Spiring said.

Council was forced to revise the original March 2017 funding deal for the True North Square project after the provincial government agreed recently to make a contribution but wanted different terms and include property tax refunds for the two residential towers for a 20-year period.

Councillors were asked to increase the city’s share of the $9-million cost of the public square component of the project, to $4.5 million from $3.1 million. In addition, they were asked to set aside an additional $500,000 for the city’s share of public amenity improvement surrounding the project, pushing the price tag to $9.3 million.

City officials said the entire $9.3-million and $4.5-million tabs will be repaid from incremental property tax revenue from the commercial components of the project.

Thursday's last-minute amendment was the result of growing public opposition to the tax grant refunds without any provision for the inclusion of affordable housing units in both buildings -- which had been common in other downtown residential projects which had also received tax refunds.

Mayor Brian Bowman said last week city hall had to approve the tax refunds without affordable housing provisions because those were the terms set out by the province. Bowman told reporters Thursday the amendment generates the same amount of dollars had the projects been part of other downtown residential programs.

Eadie (Mynarski) spoke against the amendment, explaining it won’t generate enough funds needed to address the lack of affordable housing across the city.

"It ain’t going to cut it," Eadie said of the amendment, adding the developers have failed to disclose the expected profit margin from the $550-million True North Square project.

-- with files from Larry Kusch

aldo.santin@freepress.mb.ca