Winnipeg city council has granted developer Starlight Investments three more months to secure financing for a proposed $400-million makeover of downtown's Portage Place mall.
Council voted 11-5 Thursday to give Starlight until October to reach a funding deal with the federal government. The company has asked Ottawa for $50 million in direct support as well as a $243-million loan through the Canada Mortgage and Housing Corporation.
The city devoted $20 million to the project in 2020, while the province pledged $28.7 million in tax-increment financing the same year.
The provincial commitment has since been watered down by education-tax cuts that will reduce the size of the tax breaks in the short term.
Tax-increment financing is a funding mechanism that uses future property tax revenue to stimulate development. The financial support from the province for the redevelopment of the downtown mall was intended to come through education property tax rebates, spread over 20 years.
However, those provincial tax breaks will dwindle to nothing if the Progressive Conservative government follows through on its 2019 election pledge to eliminate education taxes altogether. The province began cutting education property taxes in its latest budget.
City council's Thursday vote keeps the city's $20-million commitment alive while Starlight works out a funding deal with Justin Trudeau's Liberal government.
"We think this extension will put us over the finish line," Starlight representative Howie Paskowitz told council in a virtual address, while acknowledging a federal election could throw a deal into disarray.
"I don't bet on horses and I don't bet on elections," he quipped.
Starlight initially made a $69.9-million offer in 2019 to buy Portage Place and promised $400 million to redevelop the 440,000-square-foot mall.
It plans to build two 20-storey residential towers above the mall, with 30 per cent of the units designated affordable housing, plus new retail and office space at the Portage Avenue complex.
Council narrowly approved its $20-million contribution in July 2020. Some of the councillors who opposed the funding last year suggested the project should be allowed to die.
"I'm troubled by the process and the way this has been undertaken throughout. It seemed rushed to me last July and here we are a year later without greater clarity," said St. Vital Coun. Brian Mayes.
Couns. Mayes, Matt Allard (St. Boniface), Ross Eadie (Mynarksi), Jason Schreyer (Elmwood-East Kildonan) and Shawn Nason (Transcona) voted against the latest extension.
Mayor Brian Bowman, who voted in favour, said council is only offering an extension to an existing deal. If Starlight secures federal assistance, it should have no problem proceeding with the project, he added.
Portage Place, which opened in 1987, was Winnipeg's largest downtown redevelopment project in the 1980s, when council authorized the expropriation and demolition of dozens of buildings over five city blocks on Portage Avenue.
Developer Starlight gets 3 more months to find federal cash for Portage Place purchase, renovation - CBC.ca
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