The executive director of Heritage Winnipeg says Winnipeg needs to rethink how we reuse spaces like the Bay downtown after a valuation of the building finds it is worth virtually nothing.
The appraisal, done by Cushman & Wakefield for the Hudson’s Bay Company, values the nearly 100-year-old building at $0 if it were to be leased back to the company.
Cindy Tugwell, executive director of Heritage Winnipeg said she was shocked, but not surprised by the valuation of the building, which received a heritage designation earlier this year.
“Any building needs an adequate amount of revenue to pay the operating expenses, which clearly this building is not,” she told Global News.
“It’s the same dilemma with heritage buildings all over the downtown and the city — you have to be able to have these buildings fully occupied to continue to have that viability that they need.
The financial outlook for the building isn’t much better if the space is leased to an alternative tenant or subdivided and leased to multiple alternative tenants, according to the report.
Cushman & Wakefield found with a little more than $91 million in upgrades, the building’s value would increase to $8 million if leased to a single tenant.
With a little more than $111 million in improvements that value would jump to just shy of $10.8 million if leased to multiple tenants.
But with $303,298 in city taxes due every year, Tugwell acknowledges finding someone willing to take it over — and put in that kind of investment — could be a challenge.
The new owner would also need to abide by the rules around its heritage status — which protect internal elements including the elevators and escalators — and mean it can’t be demolished.
That’s not necessarily a bad thing, says Tugwell.
“There’s some kind of misconception out there that it’s a death sentence to get a (heritage) designation because it’s frozen in time …but that is not the case,” she said.
“Yes it takes ingenuity and it takes money, but it absolutely should not be an impediment.”
As an example she points to the former Royal Bank building on Main Street, which, with the help of tax incentives, was redeveloped into Red River College’s culinary school.
“We need some kind of support from the public sector for the private sector to get interested and make this viable,” she said of the Bay building.
“When you look at True North Square and other large new developments, there’s always monetary concessions to help buffer the blow.
But what exactly the Bay wants to do with the building following the less-than-rosy valuation, isn’t clear.
A spokesperson from the company declined an interview request from Global News.
Tugwell thinks the company is likely to divest the building, and ultimately she’d like to see it redeveloped into mixed-use, with retail, commercial and residential sharing the prime downtown real estate.
“I think we’re going to have to be open-minded — we’re a very creative and innovative city — and we just have to be patient that we can figure this out,” she said.
“It could be a very important building going into the future.”
Read the full appraisal below: