Fourteen years after troops pulled out, and a decade after First Nations groups began fighting the federal government in the courts for the property, the long-awaited demolition of the former Kapyong Barracks in Winnipeg has begun.

Opened during the Second World War, Kapyong Barracks was the home of The Lord Strathcona's Horse, the 2nd Battalion Princess Patricia's Canadian Light Infantry and C Battery of the Royal Canadian Horse Artillery. These units have a proud military history, having fought not only in the Second World War but the Korean war, and participated in NATO and UN peacekeeping missions.

But in 2004, the Patricias, the remaining unit at Kapyong, relocated to CFB Shilo, about two hours west. The Department of National Defence declared Kapyong Barracks surplus and initially planned to sell it.

The 64-hectare parcel of land was estimated to be worth up to $100 million in 2015. But it got tied up in treaty land entitlement claims and court challenges.

Two months ago, Ottawa signed an agreement in principle with seven Treaty One First Nations that would turn it into an "urban reserve" — land the federal government has designated as a First Nations reserve within a city or town.

"It's going to probably be a billion-dollar development over time," says Long Plain Chief Dennis Meeches, who belongs to one of the First Nations developing the land. "And we want to do it right the first time."

'Buildings have collapsed'

Sandwiched between two affluent residential neighborhoods, the Kapyong Barracks are a long-time fixture in the city's landscape.

Peeling lead paint, mould, animal feces and asbestos are all features of Kapyong Barracks now. (Gary Solilak/CBC) The buildings may not look bad from the road, but close up, the damage is obvious. They're full of mould, animal feces, asbestos and peeling paint.

Maj. Dez Desjardins, who is responsible for the Armed Forces' property operations in Manitoba, said the military is not allowing access to the buildings. But during a recent tour of the complex, he confirmed their state of disrepair, despite annual costs of about $1.5 million for security, taxes and upkeep.

Walking down cracked and pitted paths, Desjardins pointed out holes in the roofs of several buildings. After 14 years of not being used, he says none of the buildings are salvageable.

"We have standing water. Portions of the buildings have collapsed," he says. "And we've also had some animals living in a couple of the buildings."

Shingles are missing from some of the roofs of the buildings, which allows snow and rain to get in. (Gary Solilak/CBC) The ultimate fate of the land was a source of tension between the City of Winnipeg, First Nations and the federal government for more than a decade.

In 2015, then-Prime Minister Stephen Harper said he wouldn't appeal a decision by the Federal Court of Appeal, which upheld an earlier ruling that said Ottawa had failed to consult four First Nations about the future development of the site.

The agreement struck earlier this year gives a group of seven Treaty One First Nations the opportunity to develop the land as an urban reserve, providing Indigenous businesses the same tax exemptions they get on traditional reserves. There are approximately 120 urban reserves across Canada.

'Strengthening the Indigenous economy'

Long Plain Chief Dennis Meeches speaks for the seven Treaty One First Nations developing the land as a joint urban reserve. (Gary Solilak, CBC News) Urban reserves "aren't the answer to all of our woes and all of our challenges, but they go a long way to helping offset those challenges," Meeches says.

He says the site of the current barracks will be a place for Indigenous government offices, retail, arts and culture spaces, hotels and condos, though he cautions that it's too early to show any of the plans that have been drawn up.

"Because of its location, it is a high-traffic area. And we are looking at strengthening the Indigenous economy through urban reserves," he says.

There still are some challenges to work through. Part of the deal hinges on the City of Winnipeg getting access to some of the land so it can widen the main thoroughfare running beside it.

The group of chiefs "don't want to sell us the land, and we can't expropriate the land from them, because it's under the federal [government]," says John Orlikow, the area's councillor and chair of the city's planning, property and development committee.

"They would like us to lease the land for 99 years. We're not that keen on it, as a city. If we're going to build a road on it, we'd rather have it under the city."

Orlikow knows some local residents aren't happy with the idea of an urban reserve there — for example, some have expressed concern that a casino may be built on the site. However, Orlikow acknowledges citizens will be consulted during the development process.

"[Residents] don't know what's going to happen there, so they're curious," says Orlikow. "I'm personally quite excited about it. I think it will be a good infill," he says.

But the finished product is still years away. For now, the land is occupied by wildlife and demolition crews.