Farewell to the Bay's Portage Avenue Flagship

© 2020, Christian Cassidy

Sadly, the HBC store on Portage Avenue is going to close in February 2021. It was hardly a surprise announcement and credit to HBC for keeping it around as long as it did. Many figured after the closure of Zellers in 2012 that the store would soon follow.

The store has been a fixture on Portage Avenue since it opened in 1926.

The HBC held out hope for far too long that its HBC Reserve land on south Main Street, where its original department store was built, would become the retail hub of Winnipeg. By the time it admitted defeat in the early 1920s, Portage Avenue was already densely populated with office buildings and retail blocks. It had to settle for the only square block of land it could cobble together which was perched on the very edge of the retail drag.

That history is drawing to a close and the issue now becomes what can be done with the building going forward?

The store is a behemoth and that size will make it very difficult to redevelop.

The building is 600,000 square feet over six floors and a full basement, (the parkade was separated from the building long ago and has a different owner.) By comparison, Portage Place is just 439,600 square feet and the Richardson Building is 637,918.

In the past, HBC has offered to sell the building for a song – as little as one dollar – to someone who would redevelop it. They even offered to rent a couple of floors back as an anchor tenant to boot. There were, of course, no takers and there is good reason for that.

Even a developer who might consider buying it to redevelop just a couple of floors at a time over a long period would be up against the massive up-front costs of replacing all the systems, (electrical, heating, plumbing, etc.), on a 600,000 square foot building before they could even get started. (To give a sense of how long it takes to fill a large mixed-use project: construction (not the pre-planning, identifying anchor tenants, etc.) on True North Square began in 2015 and it has yet to start tower number three. It will be a decade or so gap from start of construction to finish.)

The building has an additional tricky spot that developers of warehouse space with a much smaller footprints have had trouble grappling with: what to do with lightness space at the core of the building?

Retrofitting a century-old building with a courtyard / light shaft (which, like the systems, would have to be paid for before redevelopment of the floors began) would be an expensive and even risky proposition.

The other difficulty is what to develop the building into given the downtown developments of the past decade?

A largely residential component might be a difficult sell given recent projects such as the Glasshouse Condos, one of the True North Towers, the soon to open 300 Main apartment tower, and a proposed Portage Place redevelopment with its own residential towers. It's not a given that throwing a few hundred more apartments or condos onto the market in a few years time would be a money making proposition.

Similarly, the downtown is hardly crying out for new commercial, retail or office space. True North Square alone has added hundreds of thousands of square feet to these markets in recent years - with more still to come - that will take years to absorb.

This is all not to say that a redevelopment cannot be done.

I've visited Dublin ever since I was a little boy to visit family and Clery's Department Store on O'Connell Street, Dublin's Portage Avenue, always reminded me of our Bay.

Clery’s had been a fixture on the street since 1853 but the store was rebuilt in 1916 after being severely damaged in the 1916 Easter Uprising. Like Eaton’s and dozens of other department store chains around the world, Clery’s went bust in 2015 leaving a 450,000 square foot, four storey, vacant building in the heart of the city.

A redevelopment was approved in 2016 to turn the building into a mixed-use development featuring a hotel, and commercial, retail and office space. I was hoping on a 2017 visit to use my "columnist for the Free Press" status to maybe get a tour or talk to someone involved in the project to see if any comparisons could be made. The original Clery's redevelopment, though, was beset by delays and the project hadn't even started yet.

In 2019, a new redevelopment plan was announced called the Clery's Quarter that will take in multiple buildings, though the old department store is still the core of the project and have a similar mix of luxury hotel, restaurants, retail units and office space. (This brochure has more information including floor plans.)

I am not trying to compare the high street of one of the most expensive European capitals in the world to Portage Avenue in Winnipeg. Still, it shows that these buildings can be redeveloped and I look forward one day to checking out Clery's work in person. (It also shows that even with multi-million dollar investors, plans to redevelop something this size in the heart of Dublin can go pear shaped and have to start from scratch again three years later.)

I'm certainly not optimistic for the fortunes of the Bay building in the short or even medium term.

Just to find a buyer could take years. It would have to be someone with deep enough pockets to bring the building up to the state it needs to be in to start developing space for lease and then be willing to sit patiently for years as its 600,000 square feet can be absorbed by the market.

I think this will be more like the case of some of our Exchange District warehouses or downtown's Metropolitan Theatre where it could be decades of mostly sitting empty before it is reborn.

That being said, there is a pressing issue of what to do in the short term after the Bay leaves.

Does it get boarded up and sit empty? Is is there some mechanism, perhaps through a third party, to try to get a tenant - even a bargain store, grocery store or perhaps the Staples which is presumably going to be put out when the Portage Place redevelopment begins - onto part of the main floor to at least keep the lights on there?

Tearing down the building would certainly be a last resort. If there is a city that should have learned the lesson that "if you tear it down, someone will build on it" is a fallacy, it is Winnipeg. The majority of the land in our downtown is made up of vacant lots from failed attempts to prove that theory in the 1960s.

We're just at the point where some of these lots are filling up again and the potential for a vacant lot at Portage and Memorial for the next 50 years is not going to find much support from existing landowners or local politicians.

My HBC-releated posts and columns:
My Bay Downtown photo album on Flickr
The Bay Downtown: Goodbye, old friend West End Dumplings
450 Portage Avenue Winnipeg Downtown Places
The Bay Parkade Winnipeg Downtown Places
The Paddlewheel Restaurant Winnipeg Downtown Places
Zellers' 79-year run in Winnipeg West End Dumplings
The Bay Downtown's missing elevator mural West End Dumplings
Winnipeg's missing murals in the Winnipeg Free Press
Bay's Food Market staying put West End Dumplings
The Bay Downtown's giant beacon West End Dumplings
Beacon shone from atop Bay Building in the Winnipeg Free Press