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Deal for $400M Portage Place mall still on table as developer reverses course

The street view looking east at the proposed new development at Portage Place. The province of Manitoba is set to provide nearly $30 million in tax rebates to the Toronto-based developer as part of a new project. Starlight Investments

A proposal to reimagine Winnipeg’s downtown mall, Portage Place, seems to be back on the table.

Toronto-based builder Starlight Investments says it’s asking stakeholders for a four-month extension to its “due diligence period”, which the developer previously said expired this month.

It comes after it threatened to pull out of the ambitious project just three-and-a-half weeks ago because the federal government hadn’t engaged in meaningful discussion about chipping in for the project.

Read more: Proposed $400M redevelopment of Portage Place mall in jeopardy after feds miss funding deadline

Starlight’s chief operating officer Glen Hirsh, tells Global News talks have picked back up since then.

“I’m really excited, and optimistic that we could see us finally going firm on this,” he says. “(I have a) really positive feeling about this.”

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It’s quite the change of tone from Hirsh, who sounded pessimistic about the project in an interview with 680 CJOB at the beginning of March.

“If I’m not … engaging in meaningful discussion (with the federal government) then that really leaves me no choice, I can’t go back to our shareholders … and say we need to extend this transaction,” he previously said.

“We have to request our deposit back and we have to look for other highest, best use of our capital.”

The developer originally asked the city of Winnipeg, the province and the federal government for $20 million each up front to help put shovels in the ground.

Read more: Winnipeg city council signs off on $20 million in support of Portage Place transformation

The province first signed off on the proposal in early 2020 – Winnipeg city council followed suit a few months later.

Since the summer of last year, Hirsh says the federal government has been the final hurdle – leading to several extensions.

Following Starlight’s comments earlier in the month, St. Vital/St. Boniface Member of Parliament Dan Vandal said the feds remained committed to seeing the project through, but the developer threw a last-minute curveball their way.

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Vandal says Starlight changed its ask to $50 million in grants in addition to a $240 million loan.

“That took everybody by surprise. It especially took me by surprise, at this late stage of their own deadline, to all of a sudden up the ante,” Vandal previously said.

Hirsh wouldn’t respond directly to Vandal’s comments, only saying he’s happy things are moving forward.

“I’m confident all three levels of government want to see this happen,” he tells 680 CJOB.

Hirsh added not all stakeholders, which also includes the Forks North Portage Partnership, have accepted the terms of the extension as of Tuesday night.

“There are a lot of moving parts on a transaction like this, and we get it. I would characterize it as a formality – and I’m optimistic, and I see a light at the end of the tunnel.”

The Forks North Portage Partnership includes the North Portage Development Corporation, which was established in the 1980’s to create Portage Place at a cost of around $80 million – or $157 million in today’s money.

Hirsh says Starlight’s plans would total somewhere in the $400 million range.

The development promises to reimagine the beleaguered mall, bringing with it two 20-storey towers of residential units including affordable housing.

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Other plans include revamped office and retail space, a glass skywalk connecting both ends of the mall, a residential pathway along Edmonton St., and a 24-hour community space.

The proposed street view of the new development at Portage Place. Starlight Investments
The street view looking east at the proposed new development at Portage Place. The province of Manitoba is set to provide nearly $30 million in tax rebates to the Toronto-based developer as part of a new project. Starlight Investments
An open office area for the proposed new development at Portage Place. Starlight Investments
The courtyard at Edmonton Street for the proposed new development at Portage Place. Starlight Investments

Hirsh maintains the same stance he’s had since the project was announced – that it’s sorely needed to revitalize the Sports, Hospitality and Entertainment District (SHED).

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“This is a meaningful, significant project, by any developer’s standards. There’s a lot of work going into this project, and we’re committed to making this work with all levels of government.”

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Downtown Winnipeg still has momentum despite closures, delays – Dec 1, 2020

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