Wednesday, 20 June 2012

Fortune Block to go the way of Eaton Centre?

This blogger has to admit that they really haven't been to Fortune Block, though the building seems vaguely familiar. Very few people in the downtown area I questioned about the landmark's whereabouts had even heard of it.  My search to find that building this week was inspired by Mike Petkau raising so much concern over it's potential demolition on the June 13, 2012 instalment of Winnipeg Internet Pundits (WIPs). My familiarity with the situation and concern for the chance of demolition wasn't high to begin with, but it grew with increasing knowledge of the issue.

Initially, doubts entered my mind about what to make of this. I weighed various perspectives, including that concern over demolition were just semi-snobbish sorrow over a "nice to have" building leaving. There are certainly bigger issues, aren't there? Affordable housing, structural poverty, racial discrimination, gentrification, you name it. But, as my knowledge improved, it dawned that this was one of those big issues. Tearing down iconic landmarks with long-term value to the city to make a cheap buck in the short-run. This mindset is ruinous for our Winnipeg.

When they say that the Fortune Block is a "historic building", they mean it. It was built in 1882 by a man who would die aboard the Titanic. To give you some perspective, less than thirty years before the construction of the Fortune Block there wasn't much of a city - what would become Winnipeg was largely hinterland. There were some trading posts, European and First Nation fur-trading activity, and Metis lot farms, but the area around the Fork of the Assiniboine and Red Rivers was no recognizable city. When Winnipeg became an urban centre the Fortune Block was one of the earliest big buildings. That's pretty historic and shows the rapid pace of development in a very short timespan.

The recent owner inherited the building. The "president/janitor" of the Fortune Block says it makes sense to sell something you inherited if you could make a million dollars off it.  Due to the fear of sale, the president/janitor hasn't done a lot of interior renovation. This is huge potential that's being squandered because of uncertainty. Furthermore, this under-renovation is leading to a less desirable joint in the long-run and raising the likelihood that the place will just be torn down due to low worth. What's the root cause of this vicious circle?

On the WIPs Cherenkov argued for an answer based on the tax structure.  He claimed that property taxes disincentivized the renovation of commercial buildings downtown. The premise was that owners would pay higher property taxes by redeveloping their buildings (because it increases their value), meaning that improvements fail to generate high returns. Tearing buildings down and replacing them with surface parking or condos is cheaper and earns a higher return, the argument goes, so developers will do that instead.

The perverse incentive argument sounds plausible. Taxing more expensive properties at a higher rate is crucial to maintaining the fairness of the system, so scraping the system wholesale is undesirable. While the province can tell the city where they can and can't tax (which they did when Glen Murray floated the idea of a municipal sales tax), a municipal (or provincial) Pigovian tax on surface parking lots of, let's say, 20% of the assessed value would correct the misplaced incentives in favour of surface parking lots. Tax credits or grants for redeveloping downtown building would halt the rapid pace of the wrecking ball, though very profitable condo development plans would still win out in some cases. Still, there has to be something to prevent hereditary owners and tenant businesses from just sitting on a historic building as it rots away. A building with so much potential and value, if only the will existed. Grants would give these buildings a fighting chance.

Condos and other upmarket residential development projects present the greatest threat to the future of the Fortune Block. It's such a shame that a Victorian era building might be crushed down to make way for such residencies, as there's a tonne of other spaces in the area - like various surface parking lots - that would suffice. There aren't, however, countless pre-20th century buildings in Winnipeg - a city that only became a city in the late 19th century. A focus strategic focus on historic sites, with the right municipal leadership, is a job winning tourism strategy for Winnipeg. Making a few bucks off condos or other residential developments is forfeiting a gigantic opportunity here.  

Sadly, there's a strong likelihood of it. While one can hope that long-term vision is kept in sight - if not by developers than by city officials - one shouldn't bank on it given recent history at City Hall. So look at this Victorian era building, as it might be gone forever in the very near future.


1 comment:

  1. Who made this video? Terrible camera work & even worse soundtrack.