Winnipeg Free Press

Winnipeg Free Press (Newspaper) - January 27, 2015, Winnipeg, Manitoba C M Y K PAGE B1 2014 INFINITI Q50 2014 INFINITI QX60 $ 8,500 * $ 8,000 * SAVE SAVE 2014 YEAR END CLEAROUT EVENT BIRCHWOOD INFINITI Pointe West AutoPark 50- 3965 Portage Ave. Telephone: 204- 261- 3490 ...................................... * SAVINGS AVAILABLE FOR A LIMITED TIME ONLY WHILE INVENTORY LASTS. SEE BIRCHWOOD INFINITI FOR DETAILS. Walmart Supercentre to open / B6 CITY & BUSINESS CITY EDITOR: SHANE MINKIN 204- 697- 7292 I CITY. DESK@ FREEPRESS. MB. CA I WINNIPEGFREEPRESS. COM TUESDAY, JANUARY 27, 2015 B 1 M AYOR Brian Bowman is drilling the message into Winnipeg's business community and senior civic administration there are no shortcuts to success and no one gets special treatment at city hall. Bowman and members of his executive policy committee on Monday rejected the strong advice of the city's downtown development agency and ordered Centre- Venture to see who else might be interested in developing the vacant land that used to house the Carlton Inn. That was the compromise Bowman ordered following an almost three- hour special EPC meeting Monday. At the meeting, it was revealed publicly for the first time CentreVenture had struck an exclusive deal with True North Sports & Entertainment - whose chairman, Mark Chipman, was Bowman's biggest campaign supporter in the civic election. The deal was to develop the Carlton Street property in a mega- project that could involve a hotel, an open public square and commercial and residential space. Even though CentreVenture officials said True North had an exclusive, ironclad deal to develop the Carlton Street site, Bowman said True North will have to demonstrate its offer is better than any others for the property. " We've seen that (' get ' er done') approach at city hall for some time," Bowman said during the EPC meeting, in reference to the slip- shod, cornercutting approach linked to former CAO Phil Sheegl and his handling of the firehall replacement program. " There's ' getting it done' and getting it done the right way." For Bowman, the " right way" involves putting the True North deal on hold and calling for expressions of interests to see if any other developer has plans for that site. CentreVenture had wanted to continue exclusive negotiations with True North for another six months, and if that didn't work out, it would see if any other developer had plans for the property. " I have no doubt that things could have and should have been done better here at city hall," Bowman said following the meeting. " We'll take whatever steps we can at city hall to ensure we don't get into this situation again." Bowman said CentreVenture will have to deal with any fallout from True North over the change in the arrangement that EPC will bring to council Wednesday for approval. CentreVenture officials also revealed Mark Chipman was a member of the CentreVenture board when his company first approached the agency with its plans last May, and he did not resign from the CentreVenture board until July. Bowman said any problems Centre- Venture faces going forward with True North are the result of its own missteps on the Carlton Street property. " Let's keep in mind the reason we are here right now is because CentreVenture entered an option agreement ( with True North) when there is an existing agreement in place for the same property," Bowman said. " We're playing cleanup." The compromise was a compromise from Bowman's original position, in which he wanted the Carlton Street property to be subject to a formal request for proposals - a more controlled process that would have required CentreVenture to specify what it wanted to build on that site. Bowman said calling for expressions of interest allows developers to pitch their own potential projects for the property without restrictions. Determining if there are other developers interested in the property was the only way Bowman and his EPC were prepared to accept a deal from the convention centre to allow construction firm Stuart Olson to buy itself out of a commitment to bring a hotel partner to the area with a $ 3.75- million buyout, instead of the original $ 16- million holdback on final payment in the $ 180- million convention- centre expansion project. Stuart Olson won the contract for the construction- centre expansion with the condition it bring in a hotel operator to build a major, first- class hotel near the expanded convention centre. The deal was later changed to require the hotel be built at the corner of Carlton Street and St. Mary Avenue, where the Carlton Inn once stood. CentreVenture had bought the hotel and demolished it. Convention- centre officials were concerned CentreVenture's secret deal with True North had compromised Stuart Olson's efforts at securing a hotel operator and had unwittingly given the contractor a good defence if the case ever went to court. CentreVenture officials supported the buyout settlement, arguing the $ 3.75 million would flow to city hall and help offset any losses in the sale of the Carlton Street property - which CentreVenture purchased for $ 6.6 million - to True North. Coun. Jeff Browaty ( North Kildonan) said he was concerned CentreVenture would never recover its total investment in the property - estimated to be close to $ 7 million, including purchase price, demolition costs and legal expenses - in a sale to True North because the deal calls for the property to be appraised as less valuable, vacant land. CentreVenture officials repeatedly tried to reassure Bowman and EPC the True North deal is the best one for the city, explaining they never believed Stuart Olson was committed to building a quality hotel after its initial hotel partner walked away from a deal to buy the Carlton Street property and the contractor was never able to get another hotel partner. aldo. santin@ freepress. mb. ca Worst- kept secret no longer a secret TRUE North Sports & Entertainment has confirmed the worst- kept secret in downtown Winnipeg: its plan to develop a pair of vacant properties between the MTS Centre and the RBC Convention Centre. The owner of the Winnipeg Jets is planning a retail, residential, office and hotel development on the former Carlton Inn site at 220 Carlton St., and a surface- parking lot owned by Manitoba Public Insurance at 225 Carlton St. CentreVenture chairman Curt Vossen told city council's executive policy committee about the plan on Monday. Minutes later, True North spokesman Scott Brown confirmed the company's interest. " The property at 220 Carlton, along with a number of other downtown properties contiguous to it, are part of a broader land- assembly package to the southwest of the MTS Centre and the northeast of the RBC Convention Centre currently under development review by True North and its partners," Brown said in a statement. Last week, a radio station reported the development may include a public gathering area called True North Square, where fans could watch games on multi- level LED screens. Former CentreVenture president and CEO Ross McGowan hinted at such a project, which would occupy the centre of an 11- block downtown area known as the sports, hospitality and entertainment district or SHED. CentreVenture secretary- treasurer Richard Olfert said the True North project " represented an investment in downtown that was larger than had ever been talked about before in connection with the hotel alone." Olfert described it as a " magnificent project" that would become a downtown destination for Winnipeggers that includes a hotel, office space, retail and residential and enhanced public spaces - all connected to the convention centre and the MTS Centre. In 2012, MPI awarded a one- year development option to 225 Carlton St. to the ARTIS/ Longboat group. Longboat Development Corp. belongs to the same family of companies as True North. In 2014, True North signed an option on 220 Carlton St., but city council is poised to approve a plan that would see that land subject to a public competition. - Bartley Kives, Aldo Santin T HE first lesson politicians are supposed to learn is to dance with the one who brought you. Brian Bowman doesn't want to boogie with anybody. Winnipeg's new mayor spent much of Monday throwing rocks at a popular corporation headed up by a popular man who just so happened to be his biggest backer in 2014. True North Sports & Entertainment achieved deity- like status in 2011 by bringing NHL hockey back to Winnipeg. True North soon became the only corporation on the planet to hear its name chanted during a national anthem. Bowman scored the endorsement of last year's mayoral race when he won the support of Mark Chipman, True North's understated and affable chairman. Some in opposing camps questioned whether Bowman could operate independently of his powerful backer. Any concerns about the new mayor's autonomy, however, evaporated over the past 10 days when Bowman's office spearheaded a campaign to complicate a True North plan to redevelop the former Carlton Inn site, north of the RBC Convention Centre. Then on Monday, the mayor raised conflict- ofinterest allegations by revealing Chipman served on the board of CentreVenture, Winnipeg's downtown development agency, when a True North option on the Carlton Inn site took effect. If this is how Bowman coddles his friends, no one should be eager to anger him. But it remains to be seen whether the ferocity of his recent actions will help the city in the long run. In an effort to demonstrate how far he'll go to rid city hall of the " get ' er done" mentality that afflicted the scandal- plagued Sam Katz administration, Bowman has potentially alienated an ally and jeopardized a land assembly that may see more than $ 100 million eventually invested in downtown Winnipeg. How did we get here? It started when the RBC Convention Centre brought forward a plan to release construction company Stuart Olson of its obligation to build a new hotel to serve the facility's $ 180- million expansion. Stuart Olson was obliged to build on the Carlton Inn site, but was stymied by the 2012 departure of hotel- building partner Matthews Southwest, which - in the words of CentreVenture board member Richard Olfert - " reneged on its deal" to buy the Carlton Inn and never spoke to the agency again. Unfortunately, CentreVenture purchased the Carlton Inn for $ 6.6 million. Subsequent efforts to land a hotelier for the site went nowhere until April 2014, when - according to CentreVenture board chairman Curt Vossen - the president of Stuart Olson's parent company told Katz and former CentreVenture president and CEO Ross McGowan he wanted out of the deal. In May 2014, True North approached Centre- Venture with a Carlton Inn plan of its own. They would build on this site as well as on the vacant Manitoba Public Insurance lot at 225 Carlton St. and connect the whole works to the convention centre with a series of skywalks. An option on the Carlton Inn site was signed on Sept. 24, but dated effective June 12, Bowman said. The problem is, Chipman was a CentreVenture board member and didn't resign from that board until July. Nonetheless, Olfert insisted the True North chairman recused himself from any Carlton- site discussions at the board level and followed all CentreVenture conflict- of- interest guidelines. Bowman is clearly disturbed by the appearance of conflict. This is on top of the mayor's anger True North was awarded an option on land Stuart Olson is still contractually obliged to develop. All of this combined to force Bowman to demand CentreVenture open up the Carlton Inn site to any and all bidders - even though the True North proposal is being touted as spectacular. If that is in fact the case, the mayor said, then True North will easily win the bid for the land. Whether or not that happens, Winnipeg's entire development community should be spooked. Again, if Bowman is willing to put his allies through a meat grinder, imagine what will happen to his enemies. bartley. kives@ freepress. mb. ca BARTLEY KIVES True North deal has to wait Bowman orders open process on developing Carlton Inn site By Aldo Santin Mayor's not afraid to step on toes, even friendly ones PHOTOS BY MELISSA TAIT / WINNIPEG FREE PRESS Curt Vossen ( left), chairman of Centre- Venture, listens to members of the executive policy committee ( above) on Monday. SCAN PAGE TO HEAR THE MAYOR AFTER EPC MEETING B_ 01_ Jan- 27- 15_ FP_ 01. indd B1 1/ 26/ 15 10: 44: 16 PM ;