Mounting debt has forced an Indigenous-owned grocer, restaurant and gallery space in North Point Douglas to close its doors, a member of its board says.

Neechi Commons says its Main Street building will close at the end of the day Saturday. The Commons said as of Friday it owed $3.9 million to its primary lender, which is Assiniboine Credit Union.

The staff-owned co-operative hopes to attract new ownership committed to local residents, the Indigenous community and long-term stability of the space.

"Our current status is not viable," said board treasurer Russ Rothney. "That's why the board decided to work to find new partners who would come and open new businesses, possibly have new ownership structure, and maybe include things like more emphasis on food processing or even training programs."

Neechi Commons has been running continually as a co-op for more than 28 years.

The store on Main opened in 2013 but the not-for-profit has struggled to pay off renovation costs and lenders ever since.

"You might say the scale of Neechi Commons was more than we were able to handle," said Rothney. "Construction and renovations, which were extremely extensive, went much higher than were originally anticipated, and that was the beginning of our problems."

Assiniboine Credit Union tried to attract a bidder to pay $3.8 million for the land and building last summer, but no one stepped forward.

The grocer remained opened and experienced a brief uptick in sales due to publicity around the time of the auction, but it wasn't enough to keep the doors opened, said Rothney.

"There was heavy publicity around the fact that our major, primary lender had started a legal process to try and recover its loan, which Neechi has been unable to pay down," he said.

"We had a surge in sales, it was in process, it stopped abruptly and reversed and the sales never recovered, and very much that was related to a widespread public perception that the business had closed, which it had not."

Neechi Commons hopes a prospective owner would cover the $3.9 million in debt, and protect another $1.3 million in "social-purpose loans and shares" it says have been invested by co-op members and private sources.

Mounting debt has forced an Indigenous-owned grocer, restaurant and gallery space in North Point Douglas to close its doors. 2:20

"Ideally, a philanthropic investor would step forward to eliminate the danger of the property being sold without a commitment to on-going opportunities for Indigenous and neighbourhood residents," Neechi Commons said in a release.

The business estimates more than $1 million worth of volunteer time has been put in since it opened.

Rothney said Neechi Commons was an attempt to fill a gap in economic opportunities for communities affected by poverty.

He said it's also represented a practical way of building toward reconciliation between the Indigenous and other communities.

"This was about mutual benefit," he said. "And of course the familiarity and respect that goes with that."