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| Portage Place Imax to Shut Down in March |
The comments of the suburbanists run along this line:
You will never find a more wretched hive of scum and villainy. We must be cautious.
The outright hatred, dread and disdain of suburbanites of almost anything downtown is so deep, I have heard some people say they won't even go to a Winnipeg Jets game for fear of crime, parking and people who don't look like them.
The surprising thing is that some people do not believe The Forks is downtown and don't harbour the same ill feelings about the place. Why is that? Well, we'll get to that in another post.
All this city wide talk on Portage Place is a result of the impending closure of the Imax Theatre. The theatre built in 1987 with 276 seats has become obsolete in recent years due to its size and inability to land first run movies or 3D. The writing was on the wall. Polo Park's new Imax with 433 seats and 3D hastened the death.
Finding a new use for the theatre won't be easy. It represents challenges when it comes to its structure. That will be up to Peterson Group of Vancouver to decide.
There always seems to be the naive belief that the University of Winnipeg will swoop in and take over all the empty spaces downtown. I supposed it isn't inaccurate to say the university has indeed jumped on abandoned bus stations, racquet courts and army surplus stores. However, there is a limit to how much, how far and how often the university can do this.
The closure of Zellers and long term future of The Bay have a role in what happens to Portage Place. People forget that the goal of the mall was to link the north side of Portage from Eaton's to The Bay. Well, Eaton's is gone and the The Bay may be following.
So what of the future of Portage Place?
Well, the one upside of Portage Place is the parkade. It makes money. A lot of it. However, the Peterson Group doesn't own it. If they did, they might be compelled to make additions to the mall such as a tower atop the east and west pads that have stood ready for years for whatever was desired above the mall.
The Prairie Theatre Exchange continues to thrive in the mall.
Despite the common belief of a completely empty mall, the places does have tenants and more service-based businesses like dental clinics find the place useful as their downtown clients find they are convenient.
I still think the key to leveraging change lies with the parkade but North Portage Development Corporation seems reluctant to discuss that option since they use the money to subsidize other operations.
I have mentioned before and others are starting to repeat it: The food court attracts a bad element. It should be closed in favour of sit down casual dining to attract a hockey, business and an entertainment audience. However, that is a decision for Portage Place management.
It is possible that the LongBoat and Artis development will stimulate Portage Place to do their own makeover. Polo Park and St. Vital have all gone through major renovations whereas the downtown mall has not. Even Winnipeg Square and the Richardson Concourse have had upgrades.
Now that the Jets have returned, there are 10 years of labour peace in the offing. The Manitoba Hydro building is across the street, a hotel and office tower will be soon built. The potential is there for Portage Place to benefit if the ownership and the North Portage Development Coporation is willing.
As a few people have pointed out, it is always one fire after another being put out downtown. Still, we are seeing successes here and there. The continued growth of population around Waterfront Drive will be felt for years. Apartment conversions of hotels will bring a steady population to some streets. And new apartments will help cover surface parking lots. With people comes businesses.
Portage Place is not going anywhere, anytime soon. And this is a problem in more ways than one. Still, there is no need to panic just yet. We have to see what developments around the MTS Centre will bring.
edit: Change CentreVenture to North Portage Development Corporation
13 comments:
I'm sure that the food court must make a fair bit of money, because Peterson Investment Group (PIG) does not appear to be at all interested in changing the mall's layout. But you have to wonder, in a mall where virtually everyone agrees that loitering is a problem, is it wise of PIG to make it so easy to loiter in there?
Sure, there are signs asking people not to sit on the planters, but you don't really have to when there is an endless supply of food court tables and mall benches to choose from.
Perhaps a traditional food court is no longer a good idea. Look at Winnipeg Square - yes, it has a food court, but it has also added a couple of food vendors in the enclosed CRU spaces. For whatever reason, people are much less inclined to (or able to get away with) loitering in places like Cafe Asante or Starbucks for long periods of time.
For better or for worse, there is a sizable contingent of Winnipeggers who avoid Portage Place because they feel uncomfortable there. Dealing with loitering there by making it harder to do is one way to possibly turn that trend around.
"I still think the key to leveraging change lies with the parkade but CentreVenture seems reluctant to discuss that option since they use the money to subsidize other operations."
I think you mean the Forks North Portage Partnership here instead of CentreVenture as they own the parkade. It subsidizes the activities that occur at the Forks and the rents that businesses pay there. The Forks would not be the same without this source of revenue.
Also if we are going to start considering the future of Portage Place, what about everything else on the north side of it? IBM and NRC about to leave bill holes on Ellice. The former hostel is still vacant but possibly close to being sold - maybe to become housing. And the Promenade has never lived up to the expectations of cafes and attracting people to be outside. If we are reconsidering Portage Place, these should at least be considered in the plans.
Central Park is also just a block away, it would be nice to find a way to connect people on Portage to it. Right now Portage Place serves as a barrier from everyone downtown to this revitalized park.
OMC: One would assume that the mall owner wants their investment to succeed but then maybe they make enough money from it that they feel it is where they want it.
Artis, the new owner of Winnipeg Square, the parkade and the tower has spent quite a lot lately to upgrade all their facilities. There are some gaps and hard to fill spots but overall, the building has what it needs for the Portage and Main crowd. It is hard to say if it will ever land that extra tower or hotel that all been on the books since 1979.
Erik: Yes, sorry I meant North Portage Development Corporation and the money they use to subsidize other parts of it mandate on north Portage and The Forks. I corrected the information.
I have no idea what will go in the empty IBM offices. The NRC is a gorgeous campus. I'd love to see Red River make use of it for their engineering and technical CAD programs. Maybe an incubator for R&D.
I have no idea what the hotel will become. Seems ideal for student housing but what do I know.
Central Park has been helped by the Winnipeg Foundation and a few other government and non-government agencies to clean up and restore the park.
There is a lot of housing behind Portage Place but the The Promenade has served nothing but a service road for delivery vehicles and a gang gathering zone. Think access needs to be better controlled to it to prevent abuse.
One of the most important metrics often missed in news coverage about Portage Place, but picked up by our friend Ethan Cabel in his 2010 Uniter article about the mall, "Portage Place is ‘cheap’ without the ‘chic’": yield.
Consider his observations on Portage Place vs. Polo Park:
Approximate sales per square foot:
Portage Place -- $250
Polo Park -- $550 to $600
Rent per square foot:
Portage Place -- $15 to $40 retail, $135 food court
Polo Park -- $60 to $90 retail, $400 food court
I think it's safe to draw a few conclusions from these figures:
a.) Portage Place's strongest selling point is cheap space with all of the amenities that come with a mall -- security, shared common element costs, etc.
b.) Portage Place's low cash flow per square foot will prevent a big "spend" on refurbishment, and will force it to keep its costs well below Polo Park's on a per square foot basis. A bit of fresh paint here and a bit of roof work there might be fine, but a major overhaul would be a strain on both Peterson (requiring subsidization from their more lucrative properties, in the absence of politically motivated subsidies) and on Portage Place's tenants.
A fancy makeover could also give Portage Place a confused identity. People will avoid places that look expensive because they're conditioned to expect it to be expensive -- even though the prices might be quite reasonable. This could alienate their most regular customers, and not be enough to draw new customers in.
c.) The food court might be distasteful, but it's also their best performing asset. Better to take risks elsewhere in the mall first, and in the food court last, at least from a commercial perspective.
Finally, maybe it makes commercial sense, if Portage Place is to stay in the business, to embrace its core demographic and not waste its time competing for a demographic that will always be able to get it bigger, better, nicer at a suburban mall no matter how hard Portage Place tries to compete. Even if Portage Place "attracts a bad element", even a bad element has some money to spend and can make for loyal customers.
Then, when the mall is no longer viable, put it up for sale reasonably confident that to leave it permanently empty will be politically untenable.
@ The View - Great analysis. I suppose that Portage Place is basically being treated as a wasting asset as far as shopping centres go. I suppose that if there is going to be any kind of renovation, it will probably be to turn the place from a mall into an office building.
Seven: All good point for sure.
However, I am convinced the way that Portage Place's value is unlocked is through the parkade. It is a valuable commodity than Polo Park doesn't have and generates huge profits.
I believe it can lead to the building of the always planned for towers atop Portage Place.
And if a hotel or condos go up, I am almost certain it changes the dynamic of the mall, especially the food court.
OMC: Or add another successful attraction such as Prairie Theater Exchange. My personal preference is for an exhibition space to replace the lost one across from the MTS Centre. But you would need 20,000 feet of space for it minimum.
@ OMC: Thanks!
@ John: Therein is the problem. Forty-five percent of FNP's revenues came from parking in 2010-11, and was essential to subsidize the loss-making side of FNP's business, so FNP has the upper hand politically and commercially.
The market value of FNP's parking business in 2011 was estimated at $25 million, more than Portage Place itself is likely worth.
I'm doubtful that Portage Place's dynamic can be changed. The mall's brand is damaged beyond repair; too many Winnipeggers have come to their final conclusions about Portage Place, and would dismiss a proposed revitalization of the mall as an attempt to dress a monkey up in silk in hope that no one will realize it's still a monkey.
The path of least resistance now is to leave Portage Place on its current trajectory, and then to do a partial or full demolition-and-rebuild when the time comes.
I like going to the food court in Portage Place. It's like a great motivational speech is playing out in my head while I am there... "At least I'm not like these assholes. I am making all the right moves in life. I am so handsome. I have all my teeth. I read books. Man, life is good."
Seven: I was thinking a sale of the parking lot would fulfill the goal of leveraging further work on the mall. Staples was the last upgrade and if $12 million can be spent on Grant Park Mall, one can assume that some money can be spent on Portage Place.
As for the money, the North Portage people could use it for parkade development elsewhere on their mandate sites.
As for how people view Portage Place, many regard the entire downtown as damaged. Outside of Winnipeg the same view often comes up.
I don't know that it has to be true.
I don't think we need a fashion mall of Polo Park's calibre downtown. But we do need a grocery store. Room was made for Staples...maybe room for that type of store?
If the trajectory is "murder in the mall", I don't know if anyone will be happy with that.
Grant Park is in a much stronger position to finance a makeover than Portage Place, with sales of more than $450 per square foot (a bit below the national shopping centre average of about $580), versus $250 at Portage Place (way below the national average).
Getting and keeping Target, which typically outsells Zellers by $100+ per square foot and will make a strong anchor tenant, makes an overhaul easy to justify as money well spent.
Portage Place's outlook is not so bright. Its debt load already had it on DBRS's "hot list" (not a good list to be on) for awhile; it might or might not still be on there. Their case for additional financing will be far weaker than Grant Park's was, and the optics of coercing a public agency to sell a parkade for the benefit of a controversial mall owned by a private sector developer are just too dreadful.
Seven: Then I suspect the future for Portage Place isn't a slow death, it could be a violent one or a sudden one.
By violent, I mean a crime related one. By sudden, I mean the mall owner goes bankrupt and leave the mall to the government.
What I have heard here is that there is no hope, none at all. It will only get worse and worse.
Hey, this is like a WIPS episode playing out in the comments section!
John, I hadn't considered what kind of effect a murder in the mall might have, but you can bet that if it happened, it would be the final blow for retail at Portage Place. I work nearby and a lot of people I know set foot inside grudgingly, and only when they have to. Many people would probably swear off the place entirely if the yellow police tape ever went up (let's hope it doesn't).
Anyhow, even if Portage Place's retail days are probably numbered, I don't know that the future is necessarily that dire for the facility itself. The structure would probably not be that expensive to reconfigure into office space (much of Portage Place already is office space, and was designed that way from the get-go). If the retailers move out, then it's more than likely that Portage Place will become just another office building.
For a glimpse into Portage Place's future, look no further than Commerce Place in Edmonton. Its opening coincided with economic bust of the early 1990s, and the vast majority of the mall (which sits beneath a massive office tower) was simply turned into more office space.
OMC: You're right. :p
The office conversion might be the way to go. Other moves to make the place less of a loitering and crime incubator would have to follow before it was thought of as a true office building.
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