Winnipeg Jets owner True North considering purchase of Portage Place mall
Option to purchase downtown mall on the table, according to city report
The real estate division of True North Sports and Entertainment is considering a purchase of downtown Winnipeg's beleaguered Portage Place mall to redevelop it into a mixed-use building.
True North Real Estate Development, a division of the company that owns the Winnipeg Jets, is seeking an option to purchase the 36-year-old property by the end of 2023.
"Portage Place has been a large, cumbersome and mostly vacant asset in a state of continuing decline in Winnipeg's downtown for many years," True North said in a statement.
"It is understood and supported by all parties that a dynamic and purposeful redevelopment plan is a necessary and significant step forward for the Portage Place community and the urban health of downtown Winnipeg as a whole."
The purchase option requires True North to conduct community consultations about the redevelopment of the mall, keep the skywalks connecting the mall to the rest of downtown open from 7 a.m. to midnight and pay The Forks North Portage Partnership no less than $34.5 million for its stake in the mall — which includes the land, the parkade below the mall and the air rights above it.
"TN is a well-known Winnipeg-based developer and owner of mixed-use real estate and sports and entertainment assets in Winnipeg with relationships throughout Canada," Winnipeg economic development manager Matt Dryburgh wrote in a report that will come before council's executive policy committee.
"The option would give TN a one-year period to complete its due diligence so that it may develop an appropriate and engaging urban redevelopment plan for Portage Place and the surrounding neighbourhood."
Over the past two decades, True North has made hundreds of millions of dollars worth of investment into downtown Winnipeg through the construction of the Canada Life Centre, the Centrepoint development to the north of the hockey arena and the True North Square development to the west.
As well, True North executive chairman Mark Chipman has on several occasions expressed a desire to alleviate homelessness and addictions in downtown Winnipeg.
In 2019, Chipman said he supported a 24/7 addictions drop-in centre in downtown Winnipeg to alleviate what he described as "the most heartbreaking of circumstances."
Two years later, he suggested social conditions in Winnipeg's core had only worsened during the pandemic.
"It's gone long past just being heartbreaking: it's become, in my humble opinion, a humanitarian crisis," Chipman said in 2021 at a downtown safety partnership event.
Chipman also attended a provincial social housing announcement last week and a downtown safety announcement on Monday but did not comment on Portage Place, a mall built as one of many downtown Winnipeg revitalization projects.
Past Portage Place deals
Portage Place was built in 1987 by the North Portage Development Corporation, a predecessor of today's Forks North Portage Partnership. Entire blocks of downtown were razed to make room for the 440,000-square-foot mall, the centrepiece of an $80-million project funded by all three levels of government.
The mall opened amid hopes the shopping centre would bring more foot traffic downtown. Within a year, some of the mall's tenants departed amid complaints about low sales.
Over the next three decades, most of the original tenants departed, while major amenities closed, including an IMAX theatre and a movie multiplex.
The mall itself is owned by Vancouver's Peterson Group, while The Forks owns the parking lot below the mall, the air rights and the land.
In recent years, both entities demonstrated a willingness to divest themselves of the properties. In 2019, Toronto-based Starlight Investments struck a $70-million deal to purchase Portage Place, contingent upon financial assistance from all three levels of government.
Two years later, after a series of escalating requests for public money, Starlight pulled out of the deal.
Redevelopment necessary: City report
In the report to executive policy committee, the city describes Portage Place as a "largely vacant asset in a state of decline" for many years.
"It is understood and supported by all parties that a dynamic and purposeful redevelopment plan is a necessary and significant step forward for the community surrounding Portage Place Mall and the urban health of downtown Winnipeg," Dryburgh writes in the report.
"TN intends to pursue a redevelopment plan for Portage Place that will resonate with and benefit the City of Winnipeg, the downtown community and the Province as a whole. Within that plan, it is expected that there will be a significant opportunity to advance the critical needs of urban improvement in the downtown."
Dryburgh's report notes True North is prepared to pay at least $12 million less to The Forks than Starlight was willing to pay for its assets. The Forks' board has signed off on its portion of the deal, despite the lower sale price and the fact The Forks will now lose access to the parkade below Portage Place — one of its largest revenue sources.
Clare MacKay, chief communities officer at The Forks, said her agency will replace the parking revenue with investment income from the proceeds of the sale.
She said the loss of revenue is worth the greater goal of redeveloping the mall.
"Our board has agreed and I think most people would agree, the status quo just is no longer acceptable when it comes to Portage Place, a declining mall. We believe our communities and our downtown deserve better."
Both the provincial and federal governments have signed off on the deal as well.
"We're excited about this particular opportunity," said Cliff Cullen, Manitoba's finance minister, on Monday. "True North has certainly shown they can take on challenges like this. They've been very successful."
City council must sign off, too, as all three levels of government are stakeholders in The Forks.
It is not clear what True North is willing to pay for the mall itself. An official with Peterson in Vancouver declined to comment on the proposed sale.
Advocates concerned about purchase plans
When the Starlight purchase was still on the table, social advocates expressed concern inner city residents would lose access to the mall.
Kate Kehler, the executive director the Social Planning Council of Winnipeg, said Friday she would like to see a range of housing built at the mall, rising above two pads capable of supporting towers at either end of Portage Place.
She also wants to see the mall house a community space that could offer 24/7 supports to people in crisis.
"A destination mall in downtown to get people out of the suburbs is a failed urban development across all jurisdictions," said Kehler, who was not privy to the prospective plans regarding Portage Place.
"We want it to actually meet the needs of the communities that surround it, so that includes the Indigenous people who live downtown and that includes the newcomers who live downtown."
Molly McCracken, the Manitoba director of the Canadian Centre for Policy Alternatives, said she would prefer to see an Indigenous-led redevelopment and claimed True North does not have a track record of serving the community.
"True North Corporation and its subsidiaries have benefited massively from millions [in] public tax credits and incentives for decades," she said in a statement.
"True North Square benefited from Tax Increment Financing on above market rents and is critiqued for [the] gentrification of downtown."
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