True North confirms it will buy downtown land to build True North Square

True North Sports and Entertainment has bought the property at 220 Carlton Street that was enmeshed in controversy over concerns about conflict of interest. 

• Winnipeg mayor Brian Bowman mends fences with True North
• True North's Mark Chipman fires back at mayor, puts Carlton Street project on hold

The company hopes to develop the land into a $400-million hotel, office and residential complex called True North Square by 2017.

True North released a statement Monday that says the company, which owns the Winnipeg Jets, has "exercised its option ... to acquire the property at 220 Carlton Street" from a company controlled by CentreVenture, the city's development arm. 

"The exercise of the option today is a significant advancement of our position regarding the development of True North Square," said Scott Brown, True North spokesman. 

"We remain excited about the opportunity that this mixed use development has for our community and our organization. We look forward to working with CentreVenture over the next few months as we finalize our design and development plans with CentreVenture, the City of Winnipeg, and our tenant partners."

True North's move ends speculation the company may have walked away from the deal after executive chairman of the board Mark Chipman and Mayor Brian Bowman got into a public spat over the mayor's suggestions it was a back-room deal.

Today, Bowman said he couldn't be more pleased about the agreement.

"Well, it's huge. It's a significant investment. Almost certainly one of the biggest investments if not the biggest investment of its kind," he said. "Mixed use, having new residents downtown is something I campaigned on. And I would just like to thank True North for their continued investments in downtown Winnipeg."

Bowman was also asked if the deal means the tension between him and Mark Chipman has been lifted.

"The short answer is yes. We have been moving forward for some time," he said. "Winnipeggers, myself included, want to see continued investments in our downtown. And this obviously is a very exciting investment."

• Winnipeg city council puts brakes on True North hotel plan

CentreVenture's president, Angela Mathieson, says the deal is great news for the city. 

"We think there's going to be benefits not only to the immediate neighbourhood, but what's going to happen around it, I think, is going to be transformative," she said. "It just of a magnitude where it has that kind of impact."

The site, formerly the Carlton Inn, is adjacent to the RBC Convention Centre, which is undergoing extensive renovations and construction. 

The city needs tax revenue from a new hotel on the land to pay for its share of the $180 million in upgrades to the convention centre.

No price has been set for the land at 220 Carlton Street.

Mathieson said CentreVenture and True North will both get independent appraisals and take the average of both figures to get a sale price for the site.

But the deal isn't only about 220 Carlton.

True North Square's hotel will actually be built on 225 Carlton, currently a parking lot that is owned by Manitoba Public Insurance.

CentreVenture has already bought out the former Carlton Inn business and paid to demolish the old hotel. 

The city is already losing money on the site after executive policy committee voted earlier this year to approve a lower penalty for construction company Stuart Olson after it failed to deliver on attracting a hotel to the convention centre 

True North Square's tower will go up on 220 Carlton, but another tower and the square itself will be built on 225 Carlton. 

Mathieson says there's no word on tenants for either of the office towers. There was speculation earlier this year that Manitoba Liquor and Lotteries might locate its new headquarters in True North Square.

Liquor and Lotteries spokesperson Susan Olynik says the organization is still looking at proposals. 

"We do have to select a downtown location but we have not done that at this point," she said Monday. 

• CentreVenture $1M in the red but sees bright future

Construction on True North Square is to begin in two years.

The city still holds the $3.75 million it penalized construction company Stuart Olson after it failed to find a hotelier for the site.

That stemmed from concerns early last year the mayor and city council had about the transparency of a development agreement between CentreVenture and True North.

• CentreVenture arranges 'weird deal' with Canad Inns over Winnipeg hotels
• Mayor Bowman and CentreVenture rift widens over True North deal
• Winnipeg city council puts brakes on True North hotel plan

City council eventually passed a resolution calling on CentreVenture to hold a second round of expressions of interest (EOI) on 220 Carlton Street.

But CentreVenture already had a purchase agreement in place with True North that Mathieson says was a legally binding agreement.

CentreVenture ignored city council's resolution and chose not to issue a second round of EOIs. 

The council motion also withheld the $3.75 million settlement Stuart Olson paid when it admitted it could not build a hotel on the land. 

Mathieson says CentreVenture would like to have that money now to cover the cost of buying the Carlton Inn's ongoing business and paying for the demolition costs, but she says they will move forward without it if they have to.