SkyCity developer could lose St. Regis Hotel, planned site of project's first phase

Fortress Real Developments could lose the property where it plans to build the first phase of SkyCity after the companyfailed to live up to an agreement to demolish the St. RegisHotel and turn it into a parkade, say officials atcity development agency CentreVenture.

CentreVenture, Winnipeg's arm's-length development agency,notified Fortress, the Richmond Hill, Ont., company behind the downtown SkyCity condo project,that it has 10 business days to rectify the default.

"CentreVenturewill be entitled to exercise its rights, including reacquisition or sale of the property to another party," if the developer fails to take the required actions,CentreVentureCEO AngelaMathiesonwrote in an email.

Fortress bought the St. RegisHotel from CentreVenture in 2015. The sale was conditional on a development agreement that requires the construction of a 625-stall parkade and acommercial/retail complex.

The original agreement required construction to commencebefore April 2017.

Fortress already received a one-year extensionlast yearafter it failed to start building on the St. Regis site by that deadline.

The St. Regisdevelopment isthe first phaseof SkyCityCentre, a 45-storeycondo project slated to rise at Graham Avenue and Smith Street.

"It's unfortunate to hear that Fortress is in default, but it's good that we have had [CentreVenture] involved," saidStefanoGrande,CEO of theDowntown Winnipeg BIZ (Business Improvement Zone).

"If it doesn't go forward which we hope it does it will come back intothe stream of our development authority and and hopefully we can repackage it and put it back out to the community."

Winnipeg's mayor repeated his position that no taxpayerdollars are at riskbecause the city's $6.5-million grant to SkyCitydoesn't flow until completion of the project.

"In terms of the hotel," said Bowman, "we want to see it made better use of it thannow."

The 107-year-old hotel was still operatinguntil it was boarded uplast summer. Wood panels from the St.Regis'shistoric Oak Room were removed andPatent 5,an unrelated localbusiness, willuse the wood in itsmicrodistilleryand tasting room in the east Exchange.

Less than two weeks ago, Fortress published a project update newsletter that included the latest on SkyCity.

"The St. RegisHotel was shut down in the summer of 2017 and the project has secured a long-term lease from a parking operator for the parkade that will be constructed on those lands. The demolition and construction timeline on this phase is one year," the newsletter says.

Fortress did not immediately respond to a request for comment.

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