Developer no longer moving forward with Portage Place deal

Developer pulls out of Portage Place deal The plan for a $400 million redevelopment of Portage Place appears to no longer be happening. CTV's Jeff Keele explains.

WINNIPEG — It appears the deal to sell Portage Place Mall is dead.

In an email to Mayor Brian Bowman and councillors, City CAO Michael Jack says Starlight Investments has pulled out of the sale.

“On September 9, The Forks learned from Starlight’s lawyers that they are unable to proceed with the transaction and would not be asking for another extension. Starlight accordingly requested the return of their deposit,” wrote Jack.

“It's not encouraging at this time of course," said Mayor Brian Bowman.

Starlight agreed to buy the mall and the parkade for nearly $70 million.

In return it wanted funding from all three levels of government to transform the property and build residential towers on each end.

The city and province committed close to $50 million in cash and incentives, while no deal was reached between Ottawa and Starlight.

Talks between Starlight and the federal government stalled when the government said the developer wanted $50 million and a $243 million loan.

"It's disappointing news,” said Bowman. “The City of Winnipeg has been, has certainly been supportive of the transaction."

“We are of course disappointed that a potential investment in our downtown is gone. But, any comments beyond that will need to come directly from Starlight on why they are not moving forward at this time,” said Clare MacKay, vice president of strategic initiatives and executive director of the Forks Foundation.

The project to overhaul the mall was seen as a much-needed addition to Downtown Winnipeg.

"There has been a need for many decades for this particular property to do more for community then it’s been doing in recent decades," said Bowman.

In his email, Jack said The Forks is now waiting for word from the current owners of the building on what the future plans they might have for the mall.

CTV News has reached out to Starlight Investments for comment and have yet to hear back.