The Sutherland Hotel will say goodbye to its liquor licence later this month — thanks to an undercover police investigation that found four employees were selling crack while on the job.

Last year, Winnipeg police raided the hotel after a major undercover operation targeting the Manitoba Warriors — a well-known street gang.

Over nine months in 2013, undercover officers purchased crack from staff working at the hotel a total of 18 times.

The Sutherland Hotel will lose its liquor license later this month for 30 days after undercover Winnipeg police officers allegedly purchased crack from hotel staff on 18 separate occasions in 2013. (CBC) The investigation, dubbed Project Falling Star, lead to charges against 57 people with a host of drugs, guns and other weapons seized from gang members.

Now, more than a year later, the Sutherland has been handed a 30-day liquor licence suspension for both its bar and its beer vendor.

The Liquor and Gaming Authority of Manitoba handed down the penalty — one of the stiffest in recent memory.

“It has been many years since there has been a suspension of that nature,” said LGAM spokesperson Sherri Garrity. “This is definitely outstanding in terms of its significance. In recent memory, no one could recall [a penalty] that would be that serious.”

The 30-day ban begins Feb. 25 and extends until March 26 — and could be a nail in the coffin for the Main Street trouble spot.

Owner Boris Kirshner appealed the November 2014 decision — arguing the suspension could put the future of the hotel in jeopardy.

“I think that the board definitely has sent a clear message,” said Garrity. “Obviously that’s going to have a significant impact on their business ... Based on the very serious offence that took place it was something they felt needed to be done.”

That appeal was denied, and community activists are hoping at the very least, it marks a turning point for the hotel.

'It's not the end of it'

“It’s not the end of it — it’s a significant slap on the wrist to tell Boris, the owner, he can no longer allow the Warriors free reign in his hotel,” said Sel Burrows, who runs a community crime-reporting group called Power Line. “He knows we’re watching. He knows the police are watching.”

Sel Burrows has helped curb crime in Point Douglas with the community crime-reporting organization Power Line. He says Manitoba Warriors activity has picked up again at the hotel after police raided it in early 2014 and made several arrests. (CBC) Kirshner didn't deny criminal activity had happened in his bar, but he maintained to the gaming authority he never saw his employees engaged in it.

Burrows said gang activity has crept back into the hotel since the 2014 raid, and it’s one of the last remaining blights on Point Douglas — a community that’s seen massive reductions in crime over the past eight years.

“The Warriors are back. They’re back in there. Many of the good people are afraid to go in there to drink,” he said, adding some people have told him they’re afraid to walk by. “One of my seniors, my elders, told me that he witnessed four Warriors beating the hell out of an old guy who hadn’t paid his drug debts right in the middle of the bar with the bartender watching … Nobody called the police.”

Burrows, a former high-level bureaucrat and long-time Point Douglas resident, has been working with community members to shut down crack houses, curb crime and clean up the neighbourhood for the past eight years.

According to him, only two main trouble spots remain — the Sutherland and a rooming house not far away.

And gang activity isn’t the only community concern at the hotel.

Health concerns raised about hotel rooms

Burrows said community members have been calling him about the state of the rooms at the hotel.

“A friend called and said, ‘This old guy can’t get out. He is absolutely covered with bed bug bites. His room is filthy. He’s complained to his caretaker … and nothing has been done,’” said Burrows.

So the group got in contact with by-law enforcement at the city and the province, as well as the Winnipeg Regional Health Authority.

“This is a licensed establishment … in their licence they have to keep a clean and decent place,” said Burrows, who hopes the inspections and the liquor license suspension will finally change the way things are done at the hotel. “This is it. He either runs a decent hotel with no gang members — no fighting and clean hotel rooms or he’s going to get closed down.”

Officials with the WHRA said the City of Winnipeg is "taking the lead" on the inspections and the WRHA is collaborating with them to make sure the health and safety issues are addressed.

Provincial officials also confirmed they're aware of complaints about the hotel, and they're assisting city officials with any "health hazard matters should they request it."

Kirshner said inspectors had visited the hotel and found bed bugs in one of his 30 suites, and he immediately had the area heat treated and sprayed, as well as the adjoining suites.

“We are taking care of people living upstairs,” said Kirshner.

'People need a place to drink'

Burrows said he understands people need a place to drink in the area and people living in the rooms need a place to go – but the gang activity has to stop.

“People need a place to drink. No problem with that. Some of the people on Main Street have pretty rough habits — we understand that. There’s no place for crime in a licensed premises,” he said.

Burrows said the group has also been in contact with Manitoba Housing who has agreed to help out in case inspectors find the rooms uninhabitable and the people living there have to leave suddenly.

CBC contacted Kirshner, but he declined to comment on the license suspension for this article.