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 company failed to live up to an agreement to demolish the St. Regis Hotel and turn it into a parkade, say officials at city 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.

"CentreVenture will 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, CentreVenture CEO Angela Mathieson wrote in an email. 

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

The original agreement required construction to commence before April 2017.

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

The St. Regis development is the first phase of SkyCity Centre, a 45-storey condo 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," said Stefano Grande, CEO of the Downtown Winnipeg BIZ (Business Improvement Zone). 

"If it doesn't go forward — which we hope it does — it will come back into the 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 taxpayer dollars are at risk because the city's $6.5-million grant to SkyCity doesn't flow until completion of the project. 

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

The 107-year-old hotel was still operating until it was boarded up last summer. Wood panels from the St. Regis's historic Oak Room were removed and Patent 5, an unrelated local business, will use the wood in its microdistillery and 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. Regis Hotel 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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