Developer Starlight gets 3 more months to find federal cash for Portage Place purchase, renovation

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 citydevoted $20 million to the project in 2020, while the provincepledged $28.7 million in tax-increment financing the same year.

The provincial commitment has since been watered down by education-tax cuts that willreducethe size of the tax breaks in the short term.

Tax-increment financing isa funding mechanismthat 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 willdwindle to nothing if the Progressive Conservative government follows through on its 2019 electionpledge to eliminate education taxes altogether. The province began cutting education property taxes in its latest budget.

City council's Thursday votekeeps 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 Paskowitztold 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 initiallymade a$69.9-million offerin 2019 to buy Portage Place and promised$400 million to redevelopthe 440,000-square-foot mall.

It plans to build two20-storeyresidential towers above the mall, with 30 per cent of the units designated affordable housing, plusnew retailand 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 projectshould 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) andShawn 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.