Banks afraid to invest in seedy Main Street strip

Revitalization ofa rundown stretch of Winnipeg's Main Street is being held up by skittish banks, claims the head of the city's downtown development agency.

Ross McGowan, CEO of CentreVenture, said entrepreneurs seeking to breathe new life into derelict buildings are having trouble getting financing from banks and credit unions.

Bankssay the area, known for drunks and petty crime, is too great a financial risk, he said.

That has would-be developers asking CentreVenture for financial aid, putting a strain on the organization's own development plans, he said.

"It ties up mortgage funds for a year or two or even longer that we could use for further property acquisitions or other development initiatives in the downtown," said McGowan. "If we had the banks onside, it would provide that financing [and] we could use [our] resources for other things."

Approach credit unions

One businessperson was rejected by no fewer than 23 financial institutions, McGowan said.

CentreVenture has taken it upon itself to negotiate with credit unions to see if it can break the financial logjam.

"Credit unions seem to be more receptive than just the banks to doing business on Main Street," McGowan said.

He believes with CentreVenture's help and a "reasonable return" on their investment, credit unions will begin to see the area as a viable investment.

CentreVenture is funded by the city and provincial governments, and earns income by buying and selling real estate. It offers tax credits and other incentives to stimulate development of downtown Winnipeg's aging building stock.