Downtown condo tower developer stands to lose $75K after construction permit expires

A permit that would have allowed Winnipeg's tallest building to rise downtown has expired, putting its developer in position to forfeit $75,000 in fees.

Fortress Real Developments says construction on SkyCity Centre will begin in 2017

A conceptual drawing of SkyCity, which Fortress Real Developments plans to build on Smith Street. (Fortress Real Developments)

A permit that would have allowed Winnipeg's tallest structure to rise downtown has expired, putting its developer in position to forfeit $75,000 in fees.

Richmond Hill, Ont. firm Fortress Real Developments plans to build a 388-unit, $200-million condo tower on a surface-parking lot on the northeast corner of Graham Avenue and Smith Street. The proposed 45-storey building, called SkyCity Centre, is billed as the tallest in Canada between Calgary and Toronto.

A permit that would have allowed Winnipeg's tallest structure to rise downtown has expired, putting its developer in position to forfeit $75,000 in fees. 1:14

In January 2016, Fortress paid $125,000 for a six-month permit to excavate the downtown property and begin placing piles into the ground. The city extended that permit another six months, as long as complete construction drawings were submitted by Dec. 1.

The extended construction permit has expired, the city confirmed last week via email.

"The original excavation/piling staged permit is now considered to be 'expired' under the definition of the Winnipeg Building By-law," said spokeswoman Alissa Clark, speaking on behalf of the planning, property and development department.

​"Neither a permit application nor final building permit drawings have been received in conjunction with 245 Graham Avenue."

The expiration of the permit means Fortress is entitled to a 40-per-cent refund of the $125,000 fee, which works out to $50,000, Clark said via email. 

​The company, however, says the project is going ahead and construction will commence during the spring of 2017.

"Permit drawings will be submitted in full in the new year. The team along with the builder, EllisDon, is currently undergoing a detailed value engineering exercise that is focused on finding efficiencies in materials and construction timeline," Fortress spokeswoman Natasha Alibhai said Monday in an email statement.

The firm has drilled bore holes into the site over the past few weeks in order to investigate soil conditions in advance of excavation, she added.

Alibhai also said more than 50 per cent of SkyCity's proposed residential units have been sold and Fortress has hired Cushman & Wakefield Winnipeg to sell office condominiums at SkyCity.

"The program is underway and in the new year we will begin exploring offers on the retail space. Fortress will continue to focus on sales at SkyCity and financing discussions are underway," she said. 

"We do not anticipate any delays to starting construction in the spring and first occupancies of residential units are still planned for the end of 2019."

The now-expired city permit required construction to begin on Jan. 5, 2017. As well, in a March 2016 letter to city council, Fortress chief operating officer Vince Petrozza said he believed shovels would be in the ground in "the early part of 2017" and it would then take three years to complete the project.

Also in 2017, Fortress must begin construction on a plan to demolish the St. Regis Hotel on Smith Street and replace it with a 615-stall parkade, as well as a commercial and retail complex, in order to comply with the terms of a $4-million deal to purchase the downtown hotel from CentreVenture, the city's downtown-development agency.

If work on the parkade and retail complex does not begin before May 2017, CentreVenture will reclaim the property. If that happens, Fortress will receive a refund, minus any legal costs and other expenses incurred by the development agency, CEO Angela Mathieson said.

Alibhai said Fortress is "reviewing development concepts for the St. Regis" and will divulge more details this spring.