City committee backs $10M loan to developer
A City of Winnipeg committee has voted unanimously to approve a $10-million loan guarantee to a property developer to build a 900-unit condo and townhouse development.
GEM Equities owner Andrew Marquess spoke briefly Wednesday to the executive policy committee (EPC) and outlined the project slated to be built along the former CN Fort Rouge Yards near the Jubilee Avenue rapid transit corridor.
The massive infill housing project, being co-developed by Lexington Investment Corporation and GEM, is touted by the companies as the first transit-oriented development in Winnipeg's history.
"This represents an exciting and historic opportunity to create a stylish, eco-sensitive in-fill housing development on an unused, industrial site close to the city centre," states the website about the Fort Rouge Rail Yards development.
The project, which would encompass a 16-acre parcel of land adjacent to the Lord Roberts neighbourhood, is worth an estimated $200 million.
Normally the city does not provide loan guarantees to private ventures but the request came from the Federation of Canadian Municipalities, which was willing to provide GEM almost $15 million in grants and loans, but first required a guarantee from the City of Winnipeg.
The city councillor for the area, Jenny Gerbasi, said the city has done its homework.
"We are not giving anyone a $10-million grant, we are backing up a loan which has been through the due-dilligence process," she said.
"I've been assured by the chief financial officer that they've gone through the business plan, that they've gone through the finances."
Some people who live in the area were opposed to the project, with concerns over its size and traffic issues, as well as Marquess past troubles.
In 2010, he was the subject of more than two dozen lawsuits related to trades and services on other development projects. Creditors had also claimed millions of dollars in unpaid bills and damages, according to documents obtained by CBC News.
Most of those have now been settled.
Bev Pike with the Save the Lord Roberts Area coalition wondered why the city would continue to back Marquess.
"This is a risk to Winnipeg's credit rating because of the history of this developer," she said.
Mayor Sam Katz brushed aside Marquess' past.
"Find me a company that's never been involved on one side or the other in a statement of claim. I don't think you will," he said.
"I've certainly seen it. When you are doing business those things happen."
Gerbasis called the Fort Rouge Rail Yards development a great project and said the opposition is limited to just a few people.
The recommendation by EPC must still be approved by council, which meets later this month.