Toronto-based developer backs out of Portage Place deal

Hey there, time traveller!
This article was published 28/09/2021 (1183 days ago), so information in it may no longer be current.

The proposal to redevelop Portage Place mall appears dead, after city councillors were told Toronto-based Starlight Investments is unable to proceed.

On Wednesday, a brief memo from City of Winnipeg chief administrative officer Michael Jack offered an update on the $400-million project that has been in the public eye since June 2019.

“On Sept. 9, The Forks learned from Starlight’s lawyers that they are unable to proceed with the transaction and would not be asking for another extension. Starlight accordingly requested the return of their deposit,” it states.

“The Forks awaits feedback from the Peterson Group, the holder of the land lease and owner of Portage Place mall, as to their intentions and long-term plans.”

The memo does not explicitly declare the deal dead, though many stakeholders understood it that way.

If it can be salvaged, the proposal would add two 20-storey residential towers with 550 to 600 housing units, nearly 500,000 square feet of office and retail space, a grocery store and a 10,000-sq.-ft. community space with public washrooms.

The Forks North Portage Partnership owns the land at the site.

Clare MacKay, a vice-president of The Forks, deemed the news a disappointment but indicated it’s possible negotiations could resume.

“This is definitely something that is disappointing for our downtown and that potential investment that could have happened. Right now, there is nothing on the table from Starlight to us. That doesn’t mean it may not come back,” MacKay said Wednesday.

Starlight officials declined comment.

Mayor Brian Bowman stopped short of officially giving up on the deal, which he said has great potential to help revitalize Winnipeg’s downtown.

“I’m not sure if the parties will be continuing any negotiations or not, but we’ll wait to hear in due course. We’d like to, obviously, see that investment realized,” said Bowman.

“There has been a need for many decades for this particular property to do more for our community than it has been doing. I think there’s better uses of the space that we can have, given its… prime real estate.”

In July 2019, Starlight made a $69.9-million bid for Portage Place mall; it unveiled a $400-million redevelopment plan that December.

The developer originally asked for $20 million each from the city, province and federal government.

In March, Ottawa said Starlight asked it to instead pay $50 million in cash and provide a $243-million Canada Mortgage and Housing Corp. loan. In a June 30 letter, Starlight stated it was seeking an a loan of about $250 million from CMHC, which reflects an affordable housing component of the project.

The federal government did not announce a specific financial commitment but had repeatedly said it was in discussions with the company. The city offered a $20-million incentive package and the province promised $28.7 million in education tax rebates.

Coun. Cindy Gilroy, property and development committee chairwoman, said she believes Wednesday’s news marks the end of the proposal.

“I think it looks like they’re pulling out of the deal,” she said.

Gilroy said she’s concerned the lack of a development at the site will leave Portage Place at risk of closure, adding another massive empty building near the already vacant former Hudson’s Bay building.

joyanne.pursaga@freepress.mb.ca

Twitter: @joyanne_pursaga