A stalled construction project for a 14-storey, mixed-use rental apartment tower at Donald Street and St. Mary Avenue is back on track. There was maybe a bit more jubilation than normal at Carrington Real Estate’s ribbon-cutting for the downtown Winnipeg project Friday. The project — called DSM (an acronym for its location) — is already more than 30 per cent constructed. The foundation and main-floor concrete have been in place for close to two years, but the site had been sitting idle after the previous developer had to shut down operations and seek creditor protection in April 2023.

DSM will have 160 rental apartment units, including 25 per cent deemed affordable housing, and two floors of commercial space. While Carrington will use much of the original design from the former developer, it has reconfigured some of the space and added about 40 units to the plan. Most of the 10,000 square feet of commercial space is already spoken for, with the first floor to feature a new downtown location for the Keg Steakhouse and Bar restaurant chain. As well, Carrington Real Estate is moving its own offices into the second floor.

Jared Carrington, whose company has three other projects under construction close to the rapid transit line in the Fort Rouge area, said he was happy to have the chance to get into the downtown market. “It seemed like a fantastic opportunity for us to bring more tenants, more residential units to the market and, overall, to be part of the downtown revitalization,” Carrington said Friday.

The original developer set out with a budget in 2019 of about $40 million. However, amid the COVID-19 pandemic and its supply chain disruptions, followed by inflationary pricing and spiking interest rates, the price tag shot up to $63.8 million, according to the receivership court filings. Carrington, who acquired the project out of receivership in April, would not say what the cost of development would be. “We were able to make the numbers work for us,” he said.

There was a party atmosphere at the official opening ceremony, with a large crowd of supporters in attendance, as well as the mayor and three city councillors. Mayor Scott Gillingham, applauded the developers. “It is much-needed investment,” he said. “Projects like these are crucial for the city. It addresses the need for more housing downtown and housing with access to public transit and that’s walkable to amenities.”

Carrington made no secret he is hopeful DSM will be eligible for the city’s Housing Accelerator Fund program, which would pay out tens of thousands of dollars per unit developed. DSM will join an expanding portfolio of new rental housing under construction or recently completed downtown, including 300 Main, the just-announced development at Portage Place mall and the upcoming Railside housing developments at The Forks.

Kate Fenske, CEO of Downtown Winnipeg Business Improvement Zone, said it’s encouraging to see DSM move forward. “Sometimes, you don’t know what the future holds for projects that become challenging. You don’t know how long they might sit,” she said. “So it’s exciting to get this project back on track.”

As well, Fenske said there is a deep need for affordable housing and the mix of offerings at DSM is what the market needs. “You can’t have all luxury condos or all social housing,” she said. “This project has a nice mix.”

Gord Howard, owner of the Keg franchise that will move into the building (as well as three others in the city), was the former developer of the project. “I think they did a good job presenting the very positive side of things,” he said.

While most purchases of distressed properties out of receivership are done so at a discount, Carrington said even if it is a good financial opportunity for his company, such projects come with their own unique set of challenges. “There were creditors and there’s probably some who aren’t happy with the way thing transpired,” he said. “We have to do a lot of managing of relationships.

“Winnipeg is a small city and no one wants to see a project fail. We have to survive those relationships.”

Originally slated to have been completed in summer 2024, the DSM project is now scheduled to wrap up by July 2026.