The City of Winnipeg is poised to offer the Southern Chiefs' Organization up to $9.7 million in property-tax rebates over 25 years as part of a package to assist the $135-million redevelopment of the former Hudson's Bay building.

The organization plans to redevelop the six-storey, 650,000-square-foot heritage structure at Portage Avenue and Memorial Boulevard into a mixed-use building called Wehwehneh Bahgahkinahgohn. The redevelopment plan calls for 300 housing units, health and child-care centres, a First Nations museum, an art gallery and two restaurants.

The province is contributing $35 million to the project, while the federal government has extended $65 million worth of loans, demanding only $10 million be repaid.

In a new report to city council's executive policy committee, the city is offering SCO an 80-per-cent rebate on the property taxes the development will generate every year after a new occupancy permit is issued, likely in 2025 or 2026.

That rebate, which utilizes a mechanism called tax-increment financing, will be in place for 25 years. It will work out to an average of $388,000 a year, Winnipeg economic development manager Matt Dryburgh writes in the report to EPC.

"The transfer of the HBC building to SCO marks a significant act of economic and social reconciliation with Indigenous people and a major revitalization project for Winnipeg's downtown," Dryburgh writes.

Once the building is redeveloped, the city expects to continue collecting about $97,000 in property taxes from the site every year, which is an increase from the current $62,000 annual tax bill, the reports states.

The city is also offering to fast-track the permits for the project and waive up to $350,000 in permit and planning fees, according to the report.

"There is recent precedent for council approving a reimbursement of similar fees, having approved a reimbursement of $400,000 for the estimated permit and planning fees associated with a proposed redevelopment of Portage Place mall," Dryburgh writes.

The city is also offering to improve sidewalks and streetscaping around the former Bay building by 2025 and might repair the areaways — hollow spaces located underneath sidewalks — along the north, east and west sides of the block, the report states.

The Hudson's Bay Company's Winnipeg flagship store opened at Portage Avenue and Memorial Boulevard in 1926. The city has granted heritage-protection status to the building's limestone cladding, its western and northern canopies and to its curved elevator lobby inside.

The HBC began closing floors of retail space in the building in the 1990s and closed the store for good in November 2020.

The company transferred the structure to the Southern Chiefs' Organization in April.

The assistance plan for the Bay redevelopment comes before executive policy committee on June 15 and heads to council as a whole on June 23.