It’s maintenance, not revenue

Opinion

Hey there, time traveller!
This article was published 20/03/2024 (564 days ago), so information in it may no longer be current.

In a recent news release, Mayor Scott Gillingham’s office reported that annual operating expenses for the underground concourse at Portage and Main exceed its rental income by nearly $966,000.

According to our mayor, “The ongoing expense to keep the Portage and Main underground open is not sustainable.”

I suspect that most Winnipeggers view the city’s portion of the underground concourse very much like other government-owned real estate: Public space that allows the city to provide a service, and not a revenue centre built to yield a profit.

Bridges, sidewalks and roads aren’t profit centres either. Community services (rec services, libraries, etc.), fire paramedic services, and the Winnipeg Police Service accounted for $120 million, $226 million and $327 million of the city’s 2023 budget, respectively. Interested parties can have a healthy debate about how wisely those budgets are spent year-to-year, of course.

However, no one questions that adequate spending in all three areas is required to help make Winnipeg a safer, healthier and more desirable place to live. Residents don’t generally debate how “sustainable” those departmental budgets are.

The city also budgeted public transit revenues of $131 million against expenses of $233 million for the last fiscal year. The obligatory ‘transit subsidy’ as reported in the city’s 2023 adopted budget thus totals $102.1 million.

Nowhere does the administration indicate whether or not that level of projected budget shortfall — and requisite subsidy — is ultimately “sustainable.” Presumably, that “subsidy” is simply a cost of doing business in a growing city, where transit ridership is encouraged.

Likewise, the business community encourages pedestrian traffic — including street level traffic — throughout the downtown.

The Portage and Main concourse provides climate controlled access between four major commercial buildings (plus a connection to two additional office buildings, and a major hotel east of the intersection), 365 days a year.

Mayor Gillingham and council should be mindful that those concourse-connected buildings contribute approximately $12 million in annual property taxes to city coffers, and provide workspaces for more than 6,000 downtown workers, plus amenities for thousands more visitors and hotel guests.

Given those contributions, commercial building owners and the development community would appreciate some clarity as to which operating expenses the city generally considers to be “sustainable,” and which ones it does not.

What has not been sustainable, in our view, is a failure over the last 40-plus years to plan for the necessary capital improvements and facility upgrades to keep the city-owned portion of the concourse viable.

In contrast, each of the downtown property owners has spent considerable resources over the years modernizing their own concourses, signing on new tenants, and planning for upgrades to their properties as necessary. Governments would be wise to do the same.

Tom Thiessen is the executive director of the Building Owners & Managers Association (BOMA Manitoba).