Housing advocates and a taxpayer watchdog group are criticizing a city plan to exempt a new luxury apartment tower at True North Square from providing some affordable housing units.

On Thursday, city council will consider a series of changes to its financial-support package for True North Square, a $400-million development that includes four towers and a public plaza on two parcels of downtown land south of Graham Avenue.

One of the changes would exempt developer Northland Properties and True North Real Estate Development from ensuring 10 per cent of the units in a pair of new residential towers are affordable units.

An official grand opening of True North Square's public plaza is set for Thursday Sept. 27. (City of Winnipeg) The existing city-provincial program that offers tax rebates for downtown residential housing required the projects to build those affordable units.

That stipulation would be removed on Thursday, pending the council vote.

"It's disturbing, sets a precedent and what's the point of having rules when it's that easy to work around them?" said Shauna MacKinnon, associate professor of urban and inner-city studies at the University of Winnipeg, who is also involved with the Right to Housing Coalition.

The change was part of a report walked on to last Wednesday's executive policy committee agenda. The committee approved the changes unanimously. Northland Properties is a partner in True North Square with True North Real Estate Development, a company controlled by the owners of the Winnipeg Jets.

True North is almost finished building two towers — a 25-storey apartment building and a 17-storey office tower — as well as a public plaza east of Carlton Street. The plaza opens on Sept. 27.

The mayor wouldn't say if he would be prepared to waive the clause for a future downtown development if one came forward. (Warren Kay/CBC)

Northland is building a luxury condo tower and a Sutton Place Hotel west of Carlton. The existing requirement to keep rent equal to or less than the median market monthly rate in the residential components of the project is determined by the Live Downtown — Rental Development grant bylaw, which offers incremental tax financing grants to property owners who develop a piece of land that leads to new property tax revenue.

What about police, fire costs?

Taxpayer watchdog group The Canadian Taxpayers Federation said True North is getting "corporate welfare." "Taxpayers shouldn't be putting money in the pockets of people who are trying to make a profit like this," said prairie director Todd MacKay.

MacKay rejected the notion that because both the province and city are using tax increment financing, there is no risk to the public and that the project would be good for the city's downtown "It's a bit like arguing about which end of the bathtub you're going to take water out of. If you give a break to these folks on their taxes then who's going to backfill the costs for police and fire and roads and all those other things?"

Move comes after province got rid of downtown high-rise

Kirsten Bernas, chair of the provincial working group of the Right to Housing Coalition, said in an email the exemption is particularly concerning because it comes on the heels of a move by the province that saw a vacant Manitoba Housing downtown highrise with 373 units of social housing sold to a private developer.

The recent sale of this vacant downtown Manitoba Housing highrise left a big need for affordable housing in Winnipeg's downtown, according to the Right to Housing Coalition. (Austin Grabish/CBC) Richard Milgrom, head of the department of city planning at the University of Manitoba, has been critical of public dollars going toward the project, questioning who benefits from it and who will be excluded.

He said scrapping the affordable housing units requirement is troubling. "Having government funding of any sort is really the only leverage we have to get the private sector to provide affordable housing so this becomes downtown revitalization for those who can afford it and everyone else just has to muddle on by."

Winnipeg Mayor Brian Bowman touted the benefits of True North Square while speaking to reporters on Wednesday.

"It's going to add a new amenity, it's going to add new residents to downtown Winnipeg, it's going to add to the vibrancy and we're also going to have access rights to the public plaza, all of which benefit Winnipeggers and taxpayers," Bowman said.

The mayor wouldn't say if he would be prepared to waive the clause for a future downtown development if one came forward.

"You're asking a hypothetical question so I'm not going to answer a hypothetical question," he told a reporter.

No risk to taxpayers: Minister

True North is almost finished building its public plaza east of Carlton Street. (Travis Golby/CBC) A press secretary for Minister of Municipal Relations Jeff Wharton said the True North Square residential tower as well as the Sutton Place hotel tower are a significant economic benefit to Manitoba and said the TIF poses no risk to taxpayers.

"We only pay what we collect, eliminating liability if we don't collect a predetermined amount. There are no upfront payments. TIF payments will not begin until the development is complete," Caitlin MacGregor said in a message to CBC.

True North Real Estate Development president Jim Ludlow was not available for an interview over the weekend but through a spokesperson gave a prepared statement.

"The Canadian development landscape is highly competitive and programs like these provide opportunities for cities like Winnipeg to continue to compete and attract outside investment capital. In the case of True North Square, investment capital is not only from Winnipeg, but Vancouver and Toronto," he said.

With files from Bartley Kives