Massive liquor store huge hangover for new Manitoba government

A decision to open a massive liquor store in Winnipeg's downtown came with no business case or research and the new CEO of Liquor and Lotteries has few details on why it was approved.

The alleged lack of due diligence and a change of government in last April's election now has Manitoba Liquor and Lotteries reviewing the decision.

Current Liquor and Lotteries chair Polly Craiksays the offer to lease the giant space will be looked at by the recently appointed board of the crown corporation.

"Everything is under review. It's the next thing on our list...we are looking at it right now," Craiksaid.

The "flagship" 50,000square foot liquor store was announced as a tenant last February of the True North Square building in downtown Winnipeg.

• True North Square anchors itself on luxury hotel, bank and booze

The alleged lack of oversight is being blamed on direction by the previous NDP government. The details came to light this Wednesdayafternoon at a meeting of the Crown Services committee of the Legislature.

Manitoba Liquor and Lotteries interim CEO Peter Hak could find little documentation supporting signing a lease for the retail space.

"We were unable to locate any feasibility study, business case or risk assessment on that location," Hak told the committee.

Previous government made the call on massive store

Craiktold the committee she was told by the former CEO of Manitoba Liquor and Lotteries, John Stinson, that the NDP government directed the board of MLLto sign an offer to lease on the 50,000 sq ft space.

Earlier this year the newly appointed board of MLLpulled the plug on another project - anew downtown headquarters for the crown corporation.

• Manitoba Liquor and Lotteries scraps $75M relocation plan

Hak said he wasn't aware of any 50,000 sq ft retail liquor stores anywhere in Canada. He told the committee Liquor and Lotteries would be responsible for improvements to the leased space that might cost anywhere from $180 to $200 per square foot.

The store would be approximately 3 to 3 1/2 times larger than any of MLL's current retail locations and operate on two or three levels in the True North Square. There have been critics of taxpayer moneyinvolved in the development.

• Public plaza at True North Square shouldn't be publicly funded, critic says

Hak says he cannot release the terms of the offer to lease the space without permission from the developer - in this case True North and its partners. The combination of the lease and improvements could be in the tens of millions of dollars. Haksays the offer to lease is a legally binding document.

NDP Opposition MLA James Allum defended the former government saying the chair [of Liquor and Lotteries] "wasn't able to table any documentation" supporting that it was a decision directed by the NDP.

Minister says decision costs money better spent on frontline services

The Minister of Crown Services, Ron Schuler, called the NDP's part in the decision on the lease "appalling," and calls the size of the store "unparalleled" in Canada.

"A wide-open offer to lease? In the end who's carrying the bag? The people of Manitoba," Schuler said.

Allum called Schuler "offside," on his comments aboutthe store and alluded to two of the investors in the True North Square tower, the Chipman and Richardson families.

"This project, far and wide, has support of many Manitobans, including some of the most prominent business people in Canada," Allum said.

The True North development had a rocky start after Winnipeg Mayor Brian Bowman got into a very public spat with company chair Mark Chipman.

• True North's Mark Chipman fires back at mayor, puts Carlton Street project on hold

Craik says the next step is to talk to True North.

"The decision was made based on the direction of the previous government to the board that was in place at the time to move forward and I think what's missing in this conversation is we don't have the party that was involved in the other side of the lease," Craiktold reporters.

True North kept in dark about leaseconcerns

A spokespersonfor True North says the company hadn't been told of the concerns of the new MLL board.

"True North Square strives to build and maintain respectful and positive relationships with all its business partners, including its leasing tenants. We were not made aware of the issues raised today in the Legislature," wrote True North vice president Rob Wozny.

Wozny says the company won't speak further about the lease until it "speaks to all the necessary stakeholders involved" and understands the issues facing the tenant.