Plan for sky-scraping apartment tower at Portage and Main   Leave a comment


Winnipeg Free Press

While it’s too soon to hang a “Mission Accomplished” banner across Portage & Main, downtown development in this city may be starting to approach some form of critical mass.

On April 7, Winnipeg’s Artis REIT plans to divulge details about its $140-million plan to revitalize its downtown Winnipeg flagship property, the Winnipeg Square/360 Main St. complex that occupies an entire city block southwest of Portage & Main.

Artis plans to build a 40-storey apartment tower over Winnipeg Square’s south pad as well as conduct a $35-million facelift on 360 Main St., the office tower on the north pad.

The scale of the proposed redevelopment is significant, as it suggests Artis is bullish about the demand for downtown residential units as well as the commercial rental market. This is even after True North Real Estate Development and James Richardson & Sons announced their plans for True North Square, a development slated to involve the construction of four new towers south of Graham Avenue.

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JOHN WOODS / WINNIPEG FREE PRESS Winnipeg Portage and Main including Winnipeg Square photographed Monday, March 28, 2016. Artis is planning to convert the Winnipeg Square property into a high rise commercial building.

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But the Artis move is not a surprise. The REIT has been expected to build up its downtown flagship ever since it acquired the former city-owned Winnipeg Square Parkade, a reliable revenue-generator former city councillor Dan Vandal once dubbed the “gold mine at Portage & Main.”

The 2009 acquisition of the parkade, initially by Toronto’s Crown Realty Partners, granted a single entity the control of Portage & Main assets underground, at grade and above ground. Adding a residential tower to the complex increases the value, appeal and potential revenue streams for the existing shopping mall, parkade and office tower.

In other words, it makes sense to see a residential tower rise above this property. It makes even more sense that it will house apartments instead of condos.

For starters, new downtown apartment towers are eligible for property-tax rebates under the “Live Downtown: Rental Development Grant Program.” This tax-increment-financing program, administered by downtown development agency CentreVenture, allows developers of new residential units to hold on to some of the new tax revenue they generate for the city and province.

According to the eligibility rules, a tower at the south pad of Winnipeg Square would be entitled to 16 years worth of these tax rebates — 12 under the basic program and four more for existing within the boundaries of a “strategic location” map that encompasses most of the properties at Portage & Main, part of the east Exchange District and much of the South Portage neighbourhood.

There should also be more short-term demand for apartments in downtown Winnipeg, given what appears to be an oversupply of condos in Winnipeg overall. If housing prices in Winnipeg level off, then high-end downtown rental apartments will become more attractive to empty nesters seeking to ditch detached homes in the suburbs.

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The initial concept was for a second office tower at the south end of Winnipeg Square.

 

360-Main-Street

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Why? People nearing retirement are unlikely to purchase condos if they fear the value of those units will decline in the short term. Younger adults without kids, the other main target demographic for downtown living, are more likely to seek out an apartment in the first place.

If Artis pulls the trigger on this development, the tower could rise very soon. Unlike condo developers, apartment builders don’t need to sell units in advance in order to attain financing for construction.

Given Artis’ strong position, it’s possible a second tower will rise above Winnipeg Square before condo developer Fortress secures the financing it needs to build its SkyCity project on Graham Avenue. But the condo market shouldn’t remain soft for long.

In less than five years, a big bulge of what are now twentysomething Winnipeggers — the children of baby boomers — will move into their 30s, according to an analysis conducted by the Manitoba Bureau of Statistics. Home-buying will then increase, as long as interest rates remain low and housing prices remain affordable.

This outlook may explain why Fortress, Artis, True North, Urban Capital, Crystal Developers and Sandhu Developments have all built or are about to build downtown Winnipeg residential towers. The heart of this city may be approaching critical mass, just as downtown Edmonton did when that city reached about 750,000 people.

This is not just because of tax incentives or brilliant city planning. When a city gets big enough to make a downtown commute annoying but remains cheap enough to allow downtown living to be affordable, office workers young and old will move there.

In other words, thank goodness for Winnipeg’s crappy roads and underdeveloped transit system.

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It may look something like this.

 

JOHN WOODS / WINNIPEG FREE PRESS Winnipeg Portage and Main including Winnipeg Square photographed Monday, March 28, 2016. Artis is planning to convert the Winnipeg Square property into a high rise commercial building.

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Posted April 3, 2016 by markosun in Buildings, Winnipeg

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