Winnipeg approves $20M incentive package for prospective Portage Place buyer

City council has narrowly approved a $20-million package of incentives to assist a $400-million renovation of Portage Place by Toronto-area developer Starlight Investments.

Council voted 9-7 Thursday on a deal to provide $11.3 million over 10 years to Starlight, provided the company secures federal and provincial grants as well as financing for the project.

Council also voted to contribute to $2.1 million for a "community space" in the redevelopment, $5.6 million worth of streetscaping around the project, $600,000 worth of transit improvements and $400,000 worth of permit and planning fee rebates.

Starlight made a conditional $69.9-million offer for the mall, which opened in 1987 as part of a downtown Winnipeg redevelopment megaproject. Starlight's renovation plans include a residential tower, public washrooms and a community space, whose operations would be funded at least in part by government or community groups.

Starlight requested $60 million from three levels of government in capital funding for the project. The Manitoba government agreed to provide $28.7 million in tax increment financing, a funding mechanism that uses future increases in property tax revenue that flow from the increased assessed value of redeveloped properties.

Ottawa has yet to confirm any funding for the project.

As recently as last week, council's executive policy committee authorized a $5-million city contribution. Coun. Cindy Gilroy (Daniel McIntyre) upped the ante to $11.3 million with a motion authored on Wednesday.

That was revised up to $20 million on Thursday morning with a separate motion by Gilroy.

The rising price tag led Coun. Janice Lukes (Waverley West) to attempt to convince her colleagues to hold off on a decision until September so council could scrutinize the deal in greater detail.

"We should not be scrambling on the floor of council with one new motion after another," she said.

Her layover effort failed after Mayor Brian Bowman noted the due diligence period on the Portage Place sale expires on Aug. 27.

Coun. Shawn Nason (Transcona) then tried and failed to delay the motion to a special meeting of council on Aug. 12.

Ultimately, Lukes and Nason voted against the funding for Starlight, along with Couns. Ross Eadie (Mynarski), Jason Schreyer (Elmwood-East Kildonan), Kevin Klein (Charleswood-Tuxedo-Westwood), Devi Sharma (Old Kildonan) and Brian Mayes (St. Vital).

Mayes, who is a member of Bowman's inner circle, lambasted city staff and his colleagues for the manner in which the deal came to council.

"This process has been a disaster. This process has been disgraceful," said Mayes, noting how the city keeps offering more money to Starlight.

"We keep hearing this is what the public wants. How would we know? This was just made public at nine this morning. How would they know?"

Klein has also authored a rival motion that called for an outright $18-million grant to Starlight as well as $2 million in waived permit fees.

Klein said Starlight prefers a grant to money that flows in annual instalments.

Klein's motion was defeated 14-2. Only Coun. Nason supported him.

Bowman characterized Klein's amendment as offering the developer money with no strings attached.