Province promises $29M in tax financing for Portage Place mall redevelopment
Tax finance program makes province 1st level of government to offer financial support for mall's redevelopment
The sale and redevelopment of the Portage Place mall has received a boost from the Manitoba government in the form of a promise of $28.7 million in tax increment financing.
Tax increment financing, or TIF, is a funding mechanism that uses future property tax revenue to stimulate development.
The financial support from the province for the redevelopment of the downtown mall will be in education property tax rebates, spread over 20 years.
Toronto-based Starlight Investments has been working through months of diligence after its conditional $69.9 million offer last summer to buy Portage Place was accepted by the City of Winnipeg, the province and the federal government, all of which are shareholders in the property through the North Portage Development Corporation.
Starlight spokesperson Marni Larkin says the Progressive Conservative government's decision is "very exciting news" and moves the project in the right direction.
"It definitely shows we have one of the levels of government seeing our vision in the plan," Larkin told CBC News.
Starlight has published development plans for the 439,600-square-foot building that include two 20-storey residential towers, and new retail and office space.
The provincial government made the announcement of the tax increment financing via a press release on Saturday, during the May long weekend.
The tax increment financing for Starlight is the first under a new TIF program the province is calling the Manitoba Works Capital Incentive. The new program requires a minimum capital investment of $10 million to a specific property, and a minimum of 65 per cent of the total project costs must come from private sources.
Starlight has until Aug. 27 of this year to complete its research and make good on its offer to purchase the mall, after a deadline originally set for Feb. 27 was extended.
The federal and municipal governments have also been asked to provide support to the project.
Larkin says Starlight is "in extensive talks with both levels of government right now." The redevelopment is "beyond shovel-ready," she said, and could move to a construction phase shortly after agreements with the City of Winnipeg and the government of Canada.
In the meantime, Larkin says the company is continuing with "tons of stakeholder meetings" that have moved online as a result of the coronavirus pandemic.
Starlight has said its redevelopment plan, which would total nearly $400 million, includes plans to create a community hub — to be called "P3Commons" — and will feature a 24/7 space that will also include public washrooms.
The due diligence on the project "is very complex — more than a lot of projects," Larkin said, adding Starlight is committed to the development.