Winnipeg's Exchange District has been declared a National Historic Site. (City of Winnipeg)

Manitoba Hydro wants to purchase and gut three buildings in Winnipeg's historic Exchange District so the Crown corporation can put a high voltage electrical substation inside the buildings' shells.

The Allen Building, Daylite Building, and Glengarry Block — three adjoining, six-storey buildings on McDermot Avenue — are on the city's buildings conservation list.

Hydro says it would save the facades of the three properties but is actively trying to acquire them because the utility needs the space to augment power capacity in the city's downtown.

"Yes it could mean gutting the building and keeping the facade. We couldn't keep the building the way it is, on the interior, because we need that space for the equipment," said Hydro spokesman Glenn Schneider.

The Allen Building, at 288 McDermot, was built in 1905. The adjacent Daylight Building was built in 1904 and the neighbouring Glengarry Block was built in 1910. The latter two buildings were built by turn-of-the-century railway baron John Duncan McArthur.

Winnipeg's Exchange encompasses some 20 city blocks in downtown Winnipeg, just north of the famed Portage and Main intersection. The area gets its name from the Winnipeg Grain Exchange, the centre of the grain industry in Canada, which developed in Winnipeg between 1881-1918.

The area boasts 62 of downtown Winnipeg's 86 heritage structures. In 1997, the area was declared a National Historic Site.

Schneider said Manitoba Hydro would preserve the facades of the buildings similar to the way Red River College preserved the Princess Street facade for its downtown building.

But Jenni Gerbasi, the chair of the city's heritage committee, says this case is different.

"These are solid, intact buildings that could easily be revitalized," she said. "You know, just saving one wall, and then sticking a hydro substation behind, is not going to bring life to the street, it's not going to bring people to the exchange."

John Giavedoni of the local residents association said the utility's plan would create a dead zone in the area. "What you're essentially doing is creating dead zone — a total dead zone — you've got no people in the buildings, no commercial, no retail..."

Hydro says if it can't find a location for a new substation in the area — that would create another kind of dead zone. "I think there has to be a place in society for the infrastructure that is required to make society work," said Schneider.

"If we are not able to supply the electricity needs of downtown Winnipeg, that will mean you have a dead zone."