Money behind Gem Equities asks another developer to finish Fort Rouge Yards

The financial backer behind Gem Equities,which owns strategically importantland along the Southwest Transitway, has hireda differentWinnipeg developer to complete a long-delayed series of condos and apartments along the first phase of the bus corridor.

Since 2008, developer Andrew Marquess has been tryingto transform theFort Rouge Yards, a former industrial sitewest of the Lord Roberts neighbourhood, into a 900-unit residential development featuring a mix of townhouses, mid-rise apartments and high rises.

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Marquess's company, Gem Equities,received council approval for its plan in 2010. Three years later, itstarted marketingunits in thedevelopment,dubbed The Yards at Fort Rouge,in a partnership with Toronto TV personality Mike Holmes.

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After a series of delays, Holmes is out of the picture and Gem Equities' lender, First National Financial, has hired Winnipeg developerSunstoneto build the first condos at the site andrebrandthe project asJubilee Winnipeg, a name derived fromthenewJubilee Station, the southernmost of four stops along the first phase ofthe SouthwestTransitway.

"We've been asked to execute the first 40 units at Jubilee, get it built and start torebrandandrepromotethe entire site along the yards," saidSunstoneCEOBillCoady, whose firm builtthe Mere Hotel, transformed the formerharbourmasterstation intoCiboWaterfront Cafe and developed condos and apartment buildings in both the innercity and suburban Winnipeg.

Coadysaid First National Financial, the largest non-bank lender in Canada, hired his firm six months agoto oversee the completion of 40 townhouses at the corner ofRathgarAvenue and Argue Street. Those units areslated for completion in 2017.

Gem Equities remains partners with First National Financial,Coadysaid. ButSunstonewill oversee the rest of the development, which is of strategic importance to Winnipeg because it's the first of several planned to rise alongside the SouthwestTransitway.

Coadysaid only minor changes have been made to the plan created by Gem Equities. The site will still include a mix of rental units and condos, small and large units, and townhouses, mid-rises and taller buildings.

"The overall feel and context, other than thestreetscaping, is similar," he said. "We're telling people we're re-engaging with it's going to be a great surprise. It's going to be a great surprise forOsborneand for Winnipeg."

Marquess could notbe reached forcomment.

Manitoba's property registry listsGem Equities asthe registered owner of the Jubilee Winnipeg lands. Two mortgages with First National Financial, totalling $36.2 million, were attached to theland titles in April 2016.

Tim Dewart, First National Financial's legal counsel in Winnipeg, said while he can not comment on behalf of his client, itwould be incorrect to infer the size of Gem's debt to the lender from the titles.

The records also show theFederation of Canadian Municipalities, which supports the redevelopment of former industrialsites,attached a $14.7-millionmortgage to the titles in January 2016. While theCity of Winnipegoriginally guaranteed a portion of that loan, First National Financial assumed that burden in 2015.

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Fort Rouge-East Fort Garry Coun. Jenny Gerbasi, who is both the ward representative for the development and the first vice-president of the Federation of Canadian Municipalities, said she was unawareSunstone is now overseeing the redevelopment of the former Fort Rouge Yards.

"We've been waiting a long time for this project to get going. If itmakes things move moresmoothly, then it's very good news. The project has been in limbo for too long," she said."Obviously this experience in the Fort Rouge Yards has been frustrating for a lot of people."

A spokesman for Winnipeg Mayor Brian Bowman, who has pledged to complete six rapid-transit corridors in Winnipeg by 2030 funded in part by development along those linessaid the mayor's office was not aware Sunstoneis now overseeing the Fort Rouge redevelopment.

"Mayor Bowman continues to support the development of infill housing in Winnipegand will be watching to see what impact these recent changes might have on the development of these lands," Jonathan Hildebrand said in a statement.

Gem Equities also owns land in the Parker neighbourhood, along the second phase of the Southwest Transitway. Marquess acquired this land from the cityin a swap that did not involve formal propertyassessments, proper inspections or competitive tendering, consulting firm EY concluded in a 2014 external audit.

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The city was also blasted in 2015 for initiating the expropriation of some of the Parker land without disclosing its plans to place a retention pond on the site. Council nonetheless approved that expropriation early in 2016.

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