City plans renos, repairs on underused, money-losing office tower next to police HQ

The city is preparing to repair two floors of the mostly vacant office tower linked to the Winnipeg Police Service headquarters that has cost taxpayers hundreds of thousands of dollars more each year than it earns.

The plan is to renovate the second and third floors of the 11-storey former Canada Post tower at 266 Graham Ave, including some repairs needed to meet current building codes, notes a tendering document seeking a contractor to do the work.

In 2009, the city spent $29 million to buy the Canada Post warehouse and the tower, as part of the scandal-plagued police HQ project. Police now work out of the former warehouse and utilize some space in the tower.

The repair work will include interior demolition, asbestos abatement, several fire safety and smoke detection upgrades and some replacement of partitions, doors, hardware and ceilings. The winning bidder will also complete electrical, mechanical and lighting upgrades.

The city expects to spend about $130,000 on the contract.

However, the work will not prepare space for long-sought new tenants.

“The (tender) is related to work that is necessary for code compliance in two areas of the building that are currently occupied…. Tenancy in the building has not changed and there are no upgrades planned for areas that are not currently occupied,” city spokesman Adam Campbell said in an email.

A request to interview city officials was not granted Monday.

In 2023, the city sought a consultant to complete a business case on the costs and benefits of filling the tower solely with municipal staff. A request for proposals noted the city would provide a list of up to six “candidate tenants,” with three anchor tenants in the range of 150 to 400 people and other groups that “may be” in the range of 20 to 150 people.

The city did not reveal which departments or how many total staff it could consider relocating.

The results have not been released.

“At this time, there are no plans to invest in areas of the building that are not currently occupied,” wrote Campbell.

There are now seven empty floors in the building, up from a previous six, after some tenants were “consolidated” into less space, he noted.

The city spent “just over $1 million” to operate the tower in 2024, well beyond the $260,000 it earned through leases. The figure doesn’t factor in the value of the space occupied by city staff.

A civic report once predicted the municipal government could sell the tower for $18 million. But the city later determined the structure, which was built in 1958, would need about $20 million of renovations.

On Monday, Mayor Scott Gillingham said the structure is just one small part of a “negative legacy” surrounding the headquarters project, a saga that began several years before he was first elected to city council.

“The purchase and the acquisition of the tower, which is under-utilized, was part of that transaction,” he said, “And, so, now we have a building that is not being used the way it could or should be used, that we have to deal with regularly. And here’s another case of having to do repairs on a couple floors, just so that those two floors are usable.”

If the city can move more of its staff into the building at a reasonable cost, the possibility is still worth exploring, he said.

“If we could put more of our city staff in there, I would like to see that. However, there’s got to be a cost benefit to it. It has to make sense for the taxpayers of Winnipeg,” said Gillingham.

The tower’s extra cost was just one of many problems linked to the WPS project. The HQ opened in June 2016 at a cost of about $209 million, well above its original $135-million price tag.

An external audit found the project was severely mismanaged. The RCMP conducted a lengthy investigation into fraud and forgery allegations, but no criminal charges were laid.

In October, the final report from a public inquiry into the project found taxpayers were overcharged more than $40 million.

Following the inquiry, the Manitoba Prosecution Service announced it is now reviewing new evidence from the inquiry to determine whether criminal charges could be pursued.

joyanne.pursaga@winnipegfreepress.com

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