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City losing out in $200k per month as downtown office tower sits empty

WINNIPEG — A Winnipeg city councillor is sounding the alarm over a vacant downtown office tower owned by the city.

The city bought the former Canada Post tower on Graham Avenue and the attached warehouse in 2009 for almost $30 million.

The warehouse portion is being converted into the new police headquarters — a controversial process so plagued by delays and cost overruns that it’s now being reviewed by the RCMP.

The city planned to operate the office tower as a commercial rental property, but it is still sitting mostly empty.

Full list of tenants currently at former Canada Post building on Graham Avenue. Tamara Forlanski / Global News

“This is a significant concern,” said Charleswood Coun. Marty Morantz, who is chairman of city hall’s finance committee.

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City staff said 110,000 square feet of the office tower — two-thirds of its space — is currently vacant.

Every month that goes by, the city loses out on $200,000 in rent.

“If the city is complaining that there is no money anywhere else, you want to talk about money for infrastructure, rent it out,” said Laci Mcphee, who lives and works near the building.

Morantz said the public should be concerned and told the city staff we “really need to get our act together” and take the steps necessary to find tenants.

Staff said there currently are no prospective tenants for the building because millions are needed in upgrades.

“The carpeting, painting, common area improvements, systems, HVAC (heating, ventilating, and air conditioning) systems,” said John Zabudney, the city’s manager of real estate.

Real estate developer Shindico brokered the sale of the building and was hired to manage the office tower portion for the city, but a city committee voted in 2012 to terminate that contract.

The city had hoped to sell the tower for $18 million however that now seems unlikely.

“I would certainly have concerns that a building that is two-thirds empty would have trouble meeting that value,” said Morantz.

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The city is currently undergoing an evaluation of the building to see if it will sell it, fix it and lease it out, or move city staff in. That report is due back in September.

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