It was the 1970s. Good times, wide collars, Expo 67 was over and Winnipeg's Centennial year was coming up. The downtown mega-development had been the rage in North America for a few years and Winnipeg wanted to be "hip to that jive" as well.
In 1970 Trizec, a Canadian development company, came to inquire about a multi-tower complex at the southwest corner of Portage and Main, their interest piqued by the kitty-corner Richardson Building construction. It took a few years to work out the details but in 1974 a deal in principle was signed... "Trizec unveiled plans and sketches involving two 34 storey office towers, a regional bank building for the Bank of Nova Scotia, a 220 room hotel - with total rentable space of more than one million square feet at a cost of over $80m". (pp 92 - 92)
Image: The dazzling Trizec Development.The city was eventually asked to kick in about $12m (the cost floated earlier in the 70's when the negotiations first started was just $5m). The city contribution was $9.5m for a three storey underground parkade plus the cost of expropriation of the buildings and land needed to build the development. To offset some of this cost Trizec would lease the airspace above the parkade for $175k per year for a period of 99 years.
On June 2, 1976 the city voted to put the contract for the parkade out to tender.
The journey to get it built was a rough one but the city had so much invested in the development that they could not turn back. The city ended up on the hook for an extra half a million in construction costs for additional pillars, as the parkade would also act as the foundation for one of the towers (p 143). Then, there was an extra $2m for tunnelling to figure out how to create a second entry / exit point for the facility (p 143).
Richardson demolition - Trizec corner in background
The constitution of an underground concourse below Portage and Main was discussed and eventually agreed to. It became clear as negotiations wrapped up with the Portage and Main property owners that the city was going to have to speed up concourse project to coincide with that of the parkade. That cost the city an additional $350k (p 113). Other areas went over budget, partners backed out and the city found other unexpected costs en route.
In November 1978 the parkade and concourse opened to the public.
In the end, despite the agreement reached, "...the developer refused to commit to building more than 300,000 square feet ...." (p93) . They did build the approximately 600,000 sq ft tower that is there now but the other buildings, and expected tax revenues, never materialized. As for the parkade .... the city built revenue projections on a $54 a month parking rate. In the end, the demand was not as great due to the smaller development and the parkade could only charge $34.
With no prior experience with a construction project this size, or an eastern mega-developer like Trizec, the city was screwed, rolled over and screwed again, then rolled over and screwed once more. You could almost write a book about it - hey, wait, someone did !
Check out David Walker's The Great Winnipeg Dream (the page numbers above refer to this book). A summary version from Walker can be found in The Second City Book (Lorimer). Also, see the newspapers of the day, especially May and June 1976. That was when final negotiations were underway and the media, to that point cheerleaders of the project, started looking at the true cost to the city.
At time of The Great Winnipeg Dream's publication in 1979, Walker estimated that the $12m in city funding ended up more like $20 (p 148) and the project wasn't yet completed.
In Joe Zuken: Citizen and Socialist, Zuken estimated that the city's contribution, including borrowing costs, was in the range of $35 million. That is almost on par with the $40m invested by Trizec (p 222).
Whatever the outcome of the parkade debate at city hall, I hope the city squeezes every nickel they can get out of the thing !
UPDATE: wherever the Freep got the $3.5 m price tag for the parkade, I have no clue. They need to do a bit more research into their archives.