Millions of dollars in city incentives were offered to a major city developer and a feisty non-profit to restore the Merchants Bank building on Hastings Street -- but the work was never done.

Instead, the building was left to disintegrate while owned by Concord Pacific and the Portland Hotel Society, until a huge stone panel came crashing down Wednesday, nearly crushing a man sleeping in Pigeon Park.

“I thought, ‘Here we go again, another heritage building starting to crumble, and now it’s a safety threat,” said Heritage Vancouver’s Janet Leduc.

In 2006, the Portland Hotel Society applied to the City of Vancouver to get some help restoring the Merchants Bank building, which is an A-listed heritage building.

Plans show that the limestone and brick exterior would be renovated, a new door would open into Pigeon Park, and the hundred-year-old building that was at the centre of Gastown’s retail district would be restored to its former glory.

The idea: create a project similar to the Pennsylvania Hotel, one of the Portland Hotel Society’s major buildings, and include office space, a restaurant, and a media centre. Concord Pacific was to be a partner in the venture.

City council, under then-Mayor Sam Sullivan, agreed, offering a suite of incentives: $385,000 in property tax that would not have to be paid; $100,000 in grants to restore the building’s façade, and $2.5 million in density bonuses.

The density bonus would allow the project to sell to another developer the right to build their towers higher.

City council approved the plan unanimously, to applause, as the video recorded on the Vancouver website shows.

“OK, wow, happy citizens,” Sullivan quipped after the applause died down.

But eight years later, no money had changed hands, and the work wasn’t done. Leduc pointed to a leaking roof as one possible reason that the stone panel dislodged.

In a statement, Concord Pacific’s Matt Meehan said the company was only asked to help with the mortgage, before assuming ownership about a year ago. He said questions about what happened to the project should be directed to the society.

Portland Hotel Society has a new board after a shakeup earlier this year after a spending scandal; their new spokesperson referred questions to the previous board. A former Portland Hotel Society executive blamed the city for dragging its feet issuing permits.

The City of Vancouver said as of press time planning staff had not been able to find archived documents that could explain the timeline of the project more clearly.

Leduc said this building is an example of how developers can let a protected building rot to the point it can’t be saved, which clears the way for new construction.

“In the heritage industry we refer to this as demolition by neglect,” she said, adding there needs to be tougher measures at the city to force building owners to keep buildings in good repair.

“The city has a bylaw if you let your yard get out of control they clean it up and charge you. That would be another option here. If the building owner isn’t fixing it up, the city should fix it up and charge it back,” she said.

City engineers have not yet reported back on the building’s safety and much of Pigeon Park remains closed.