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  #101  
Old Posted Dec 22, 2014, 5:37 PM
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Let's get real: Winnipeg home sales fell 5% compared to last November while active listings surged almost 30%. Job losses across Manitoba since mid 2014 have now exceeded the last recession. Unsold developer inventory AND units under construction are at all time highs meaning more supply in the pipeline at the worst possible time. If people are willing to bet this development goes ahead in any way remotely resembling the original plans, I will gladly take the opposite side of that bet.
Did someone pour water on Simplicity?

It seems like he spawned a twin...just don't feed them after midnight!
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  #102  
Old Posted Dec 22, 2014, 6:04 PM
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As a downtown resident I was most excited about having a full-sized grocer in that location, so if this falls through that would be my biggest disappointment.
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  #103  
Old Posted Dec 22, 2014, 6:12 PM
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I'm seriously asking the question because there are those around here who genuinely think this project has merit. Evidently, I'm missing something. What would be a positive bell-weather for this project and its prospect?
Merit or not, I am just posting the advancements in the project. Whether the project is a sham - not financially viable - crooked developers - what ever, there wasn't a CM before and now there is. This is a construction related thread and although early in the project there is movement forward.

Until the project becomes cancelled or slows to no new news I will believe that it has as much chance as any other proposed project in this city.
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  #104  
Old Posted Dec 22, 2014, 6:48 PM
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Merit or not, I am just posting the advancements in the project. Whether the project is a sham - not financially viable - crooked developers - what ever, there wasn't a CM before and now there is. This is a construction related thread and although early in the project there is movement forward.

Until the project becomes cancelled or slows to no new news I will believe that it has as much chance as any other proposed project in this city.
Sure, but my understanding is that Graham is only CM at the moment because of the proposed parkade on the St. Regis site. Anything to the contrary?
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  #105  
Old Posted Dec 22, 2014, 8:00 PM
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Sure, but my understanding is that Graham is only CM at the moment because of the proposed parkade on the St. Regis site. Anything to the contrary?
Sorry, I had a massive brain cramp, the SkyCity CM is EllisDon. Sorry for confusion.
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  #106  
Old Posted Dec 22, 2014, 8:28 PM
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Sorry, I had a massive brain cramp, the SkyCity CM is EllisDon. Sorry for confusion.
Yeah, that's a strategic partnership between Mady and EllisDon and it runs across their entire project-base. I don't think this is instructive regarding progress here, though. Has there been a permit submission on the show-suite site?

Also notable in any case, Graham was also the CM partner on the Pumphouse project, but again, only because of the parking. These guys are showing up in every parking structure proposal across the country right now because they're willing to provide equity on a low-risk basis and that's what parking represents.
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  #107  
Old Posted Dec 23, 2014, 4:53 AM
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Sure, but my understanding is that Graham is only CM at the moment because of the proposed parkade on the St. Regis site. Anything to the contrary?
Proposed parkade on the St Regis site? The hotel is being replaced with a parkade?
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  #108  
Old Posted Dec 23, 2014, 4:55 AM
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shame cv bought it someone coulda gentrified it
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  #109  
Old Posted Dec 23, 2014, 4:58 AM
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Is there a link to this announcement? I completely missed it. That would be totally ridiculous.
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  #110  
Old Posted Dec 23, 2014, 5:18 AM
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The parking garage is supposed to be within the interior of the new podium.
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  #111  
Old Posted Dec 23, 2014, 2:55 PM
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Yeah, that's a strategic partnership between Mady and EllisDon and it runs across their entire project-base.
It wasn't a given for this project but turned out that way in the end. This project had started before the partnership was in place.
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  #112  
Old Posted Dec 23, 2014, 3:55 PM
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Is there a link to this announcement? I completely missed it. That would be totally ridiculous.
No announcement. Fortress won the RFP many months ago and this is their proposal. There's no room for almost 700 stalls in the podium of that building.

It's also the reason there's been no movement in the east Exchange on the parkade everybody's been begging for. The money's being withheld in anticipation of a parkade going there.
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  #113  
Old Posted Dec 23, 2014, 4:03 PM
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So is the parkade contingent on SkyCity getting the green light and actually commencing construction?

The reason I ask is that it would be kind of unfortunate if we ended up with a parkade where the St. Regis stood and nothing but a vacant lot next door. As I understand it the St. Regis is still a going concern except for the bar which is closed... I'd hate to see it disappear in favour of parking.
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  #114  
Old Posted Dec 23, 2014, 4:17 PM
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As a downtown resident I was most excited about having a full-sized grocer in that location, so if this falls through that would be my biggest disappointment.
The grocery landscape is Canada heavily suggested the grocery store inside SkyCity was a pipe dream from the start. There are effectively two players in the large grocery store format, Loblaws and Sobey's. Loblaws has very limited experience in the urban grocery store format and is unlikely to take a gamble on this opportunity. Sobey's was thought to be having some success with the format in other cities however part of their Safeway acquisition say almost every urban format store included in the first round of store closing. That the proposed grocery store is planned for the second or third floor of the podium also suggests even the developer views this as a long shot. Grocery stores need access to a good loading dock and frequently receive heavy pallets of merchandise. Locating somewhere other than ground level likely means still having a ground level loading dock but now adds in the requirement for a heavy freight elevator and makes the whole process of stocking the store significantly more complicated. That is without even entertaining the discussion on what a third floor grocery store would mean for people that don't live in the building.

My thoughts are that the proposal still goes ahead, the grocery space gets built and remains empty. I also think that multiple floors will be enclosed with minimal roughing in but left undeveloped when the building is "completed" with build outs happening as demand warrants. I also would not be surprised to see some other use for a number of floors envisioned as condos, either smaller apartments, a hotel or perhaps even office space if they can secure a long term lease.
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  #115  
Old Posted Dec 23, 2014, 4:24 PM
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So is the parkade contingent on SkyCity getting the green light and actually commencing construction?

The reason I ask is that it would be kind of unfortunate if we ended up with a parkade where the St. Regis stood and nothing but a vacant lot next door. As I understand it the St. Regis is still a going concern except for the bar which is closed... I'd hate to see it disappear in favour of parking.
The St. Regis is still being leased back to the previous owners to run with no beverage room. They were just given a golden parachute by CV with the understanding that they would be forced out at some point. Probably never, now.
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  #116  
Old Posted Dec 23, 2014, 4:26 PM
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^ Second floor could be a savvy location for the grocery store given the skywalk connection. What about the basement? But that being said it is rare to see grocery stores (as opposed to convenience stores) above the main floor... the only place I can recall seeing that is in Asian megacities.

I wonder what Mady/Fortress has (theoretically) lined up for the main floor if the grocery store won't be going there? Please not another casual dining restaurant for business lunchers and MTS Centre event attendees. Although I gather that the odds of anything dislodging surface parking on that site are becoming increasingly slim?
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  #117  
Old Posted Dec 23, 2014, 4:34 PM
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Originally Posted by CoryB View Post
The grocery landscape is Canada heavily suggested the grocery store inside SkyCity was a pipe dream from the start. There are effectively two players in the large grocery store format, Loblaws and Sobey's. Loblaws has very limited experience in the urban grocery store format and is unlikely to take a gamble on this opportunity. Sobey's was thought to be having some success with the format in other cities however part of their Safeway acquisition say almost every urban format store included in the first round of store closing. That the proposed grocery store is planned for the second or third floor of the podium also suggests even the developer views this as a long shot. Grocery stores need access to a good loading dock and frequently receive heavy pallets of merchandise. Locating somewhere other than ground level likely means still having a ground level loading dock but now adds in the requirement for a heavy freight elevator and makes the whole process of stocking the store significantly more complicated. That is without even entertaining the discussion on what a third floor grocery store would mean for people that don't live in the building.

My thoughts are that the proposal still goes ahead, the grocery space gets built and remains empty. I also think that multiple floors will be enclosed with minimal roughing in but left undeveloped when the building is "completed" with build outs happening as demand warrants. I also would not be surprised to see some other use for a number of floors envisioned as condos, either smaller apartments, a hotel or perhaps even office space if they can secure a long term lease.
Given how the banks are viewing the development landscape at the moment, nothing is getting built that is going to sit vacant.

Financing is tight right now and Fortress' entire model depends upon the initial high-risk equity at 8% being taken out by construction financing at market rates. And they need that to happen because they can't afford to keep paying 8% in actual cash flows with any sort of vacancy because they won't get the back end financing figure that accounts for that cash flow. In other words, the building is only worth their projections - paying 8% monthly bond coupons - at a rate that doesn't account for any significant long-term vacancy or any sort of residential rental model that doesn't produce nearly the amount of cash flow required to construct something of this nature. And all of this only works if you maximize your project as planned because they paid $9.5MM for the land.

There was never any margin for error in this project, and that was assuming everything was on schedule, which it's not. The project is already blown. There's no possibility that the project can manifest with any sort of vacancy because nobody will finance it unless they're prepared to wipe out a whole pile more equity investors and call it the downside of the risk/reward continuum.
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  #118  
Old Posted Dec 23, 2014, 7:51 PM
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I wonder what Mady/Fortress has (theoretically) lined up for the main floor if the grocery store won't be going there? Please not another casual dining restaurant for business lunchers and MTS Centre event attendees. Although I gather that the odds of anything dislodging surface parking on that site are becoming increasingly slim?
If you had two spaces and only two tenants, a grocery store and a casual dining restaurant, it would make infinitely more sense to place the grocery store on the ground level and the casual dining on the second floor especially with the skywalk connection to MTS Centre. Yes, you still need to move product through a freight elevator but you really cut down on the volume you need to move. That said, if the casual dining is far more secure that the grocery store, which is likely the case, filling the ground floor with a "sure thing" while taking a gamble on the second floor grocery happening also makes a lot of sense.

Also thanks to Simplicity for the detailed explanation on why this project can't move forward without significant vacancies. That said, it still hasn't ruled out the possibility of some sort of hotel moving in or an outside partner stepping to convert say 10 floors to smaller apartment units. Granted both those are long shots but this whole project seems to be built around those.
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  #119  
Old Posted Dec 23, 2014, 8:04 PM
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Also thanks to Simplicity for the detailed explanation on why this project can't move forward without significant vacancies. That said, it still hasn't ruled out the possibility of some sort of hotel moving in or an outside partner stepping to convert say 10 floors to smaller apartment units. Granted both those are long shots but this whole project seems to be built around those.
Considering the relative dearth of new hotel rooms in downtown Winnipeg especially of the full-service variety (as opposed to small boutique establishments), having Skycity be 1/3 or 1/2 hotel doesn't strike me as any more of a long shot than having the entire thing marketed as condos.

Let's say a third of Skycity became a Hyatt or Sheraton... it would become the nicest and best hotel in the city, and it would basically be the default choice for visiting businesspeople. Might be a surer bet than having Fortress' investors hoping and praying that the last 15 floors of condos finally sell after potentially years on the market - assuming that it is ever built, of course.
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  #120  
Old Posted Dec 23, 2014, 8:39 PM
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Considering the relative dearth of new hotel rooms in downtown Winnipeg especially of the full-service variety (as opposed to small boutique establishments), having Skycity be 1/3 or 1/2 hotel doesn't strike me as any more of a long shot than having the entire thing marketed as condos.

Let's say a third of Skycity became a Hyatt or Sheraton... it would become the nicest and best hotel in the city, and it would basically be the default choice for visiting businesspeople. Might be a surer bet than having Fortress' investors hoping and praying that the last 15 floors of condos finally sell after potentially years on the market - assuming that it is ever built, of course.
This is all very creative thinking, but the only thing less financeable than a large inventory of unsold condominiums in this city is a hotel.

I think what's more galling about this entire situation is that the city is either totally clueless or truly doesn't have the expertise to be engaged in something like an RFP. There were proposals for the St. Regis site that would have seen something come to fruition sooner than later. There were even responses that included a different hotel from the current owners given the many different revenue streams that flow and their new-found wealth. Instead, the city parked its credibility with a carpetbagging investment firm that was planning on doing something the market was never in a position to bear. And that's been evident for as far back as this proposal has been public. Now you have two sites tied up awaiting some hail-mary that's unlikely to ever manifest instead of just the one.
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