I think really the whole thing here is going to be about why the city isn't grandfathering them, and if that holds up. They submitted plans before the variance changed, so they should really not have to follow the new rules.
From the report:
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As part of the Complete Communities Zoning By-Law Alignment project, the Downtown Winnipeg Zoning By-Law was amended in 2014 to include minimum building heights for new development Downtown...
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So, yes, this is a brand-new rule.
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It is noted that 219 Main Street is the terminus of St. Mary Avenue and therefore has the potential to be a visual landmark, with framed sightlines down St. Mary.
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This is like saying "PLEASE, build us a tower here."
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Minimum building heights also ensure that the scale of development is reflective of the existing level of services and infrastructure.
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Going by this would mean they should be able to level the site and put up a couple tool sheds.
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A development is deemed to be in compliance as long some habitable
portion of the building meets this height.
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This is going to be the sticking point.