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Opinion

Since 1989, armchair planners have been able to manipulate imaginary cities by playing various versions of the video game SimCity.

Build a power plant next to a residential neighbourhood, and those homes won't rise in value. Fail to create parks and you won't attract wealthy residents. Don't build churches and a divine power may just smite your city with an earthquake.

The worst thing that could happen, if you screw up on a colossal basis, is your imaginary city will go bankrupt, and you'll have to start the game from scratch.

Real cities don't have a restart option. When real-life planners make mistakes, cities pay the consequences, which more often than not involve a massive pile of cash.

This is what the City of Winnipeg may be facing as a result of its downtown development agency's efforts to engineer an entire vicinity: The SHED, or sports, hospitality and entertainment district.

When real–life planners make mistakes, cities pay the consequences, which more often than not involve a massive pile of cash

This 11-block area covers part of the South Portage neighbourhood, made up mostly of commercial buildings and surface-parking lots, and spills into Portage-Ellice, encompassing the MTS Centre, RBC Convention Centre and both the Metropolitan and Burton Cummings theatres.

The SHED is also aided by a development incentive known as tax-increment financing, where additional taxes from new or improved structures are plowed back into infrastructure in the same area or handed back to developers.

Ideally, these incentives would be made available to anything new in the area. But only pre-approved projects in the SHED get to qualify.

This is a mild perversion of city planning. But the SHED is also odd in that tax-increment financing is more powerful when it covers blighted areas. Downtown Winnipeg is underdeveloped, but calling South Portage blighted is a stretch.

All of this, however, is small potatoes compared to the biggest problem with the SHED: planning arrogance, if not outright hubris. The SHED represents an effort to create an entertainment district from the top down, with little consideration for the organic way neighbourhoods develop when zoning rules, tax incentives and market forces are allowed to interact anarchically.

In 2012, CentreVenture purchased the Carlton Inn, a hotel considered a scourge by some of its neighbours. The land was worth less than $2 million, but there was a functioning business on the premises.

CentreVenture wound up spending $6.6 million on the purchase plus additional cash on demolition and accounting for the curious deal that saw the Canad Inns Corp. assume partial ownership for tax-avoidance purposes.

Construction company Stuart Olson, already obligated to build a hotel to serve the expanded convention centre, was required to build on the Carlton site.

But CentreVenture spent too much, hampering efforts to bring a hotel to the table.

The development agency wound up doubling down by working with True North Sports & Entertainment on a larger plan involving both the Carlton Inn site and the surface-parking lot to the east at 225 Carlton St.

There's nothing wrong with CentreVenture conducting land assembly. North of Portage Avenue, the A&B Sound purchase prevented another dollar store from opening and made way for the Centrepoint project, which includes a hotel, condo tower, office space and a parkade.

In comparison, the land assembly south of Portage Avenue appears haphazard. First, the occupied Carlton Inn site was selected for a convention-centre hotel even though Lakeview, a company that builds hotels, owned a vacant lot west of the convention centre.

When private efforts to buy the Carlton failed, CentreVenture bought the hotel. And when that site couldn't be sold without incurring a loss, CentreVenture signed an option with True North.

All of this would have gone unnoticed if a Carlton development was finalized before Winnipeg's new mayor was elected and the convention centre didn't come before a new council asking to release Stuart Olson from its obligations.

Brian Bowman is now in the unenviable position of demanding to learn details of a plan developed with True North, whose chairman, Mark Chipman, endorsed him.

More significantly, the mayor is making noises about limiting CentreVenture's future ability to engage in land transactions without council oversight.

In SimCity, a game based on real-life planning principles, players learn their actions come with consequences.

CentreVenture's manipulation of downtown's tax regime and real estate market may actually serve to dissuade development, especially if prospective players believe the field isn't level.

bartley.kives@freepress.mb.ca