Youth Opportunities Unlimited plans to convert a former downtown bar into housing for young mothers.

The agency is buying a corner property at Richmond and York streets after a plan by Hong Kong investors to build a student residence fell through.

“It’s always been our preferred location and we kept our eye on it . . . We’re thrilled to have this facility,” YOU executive director Steve Cordes said Monday.

The agency was angling last summer to buy the property across the street from its Cornerstone project, which includes affordable housing and employment training for youth.

But at the last moment, YOU lost out to QTR Holdings, a group of Hong Kong investors.

QTR posted signs saying a highrise student residence would be constructed on the site of the former GT’s bar and New Yorker Cinema, even though a formal proposal hadn’t been presented to city officials.

The company also enlisted former city councillor Bud Polhill to help steer the project through the planning process.

But commercial realtor Rick Gleed said the QTR deal fell through.

“For whatever reason, they couldn’t pull the trigger, and that gave YOU the opportunity to jump back in.”

YOU has launched a fundraising campaign to raise $8.5 million to $10 million to finance the new project.

The 2012 closing of the Salvation Army’s Bethesda Centre, a home for pregnant teens, has boosted demand for housing for young mothers, Cordes said.

The residence would contain about 30 housing units, he said. YOU also would offer employment and education support for residents.

The project would try to preserve the heritage character of the building, though the property at 329 Richmond St. — the one-time cinema — would have to be rebuilt because only the frame remains, Cordes said.

YOU spent about $6.5 million in 2007 to convert a heritage building on the northeast corner of York and Richmond. The upper floors of the building it named the Cornerstone contain 30 units of transition and affordable housing for young people.

“It gives us confidence. We developed the Cornerstone from a building that was fairly distressed, but the need for affordable housing for youth was high,” Cordes said.

It will take at least a year to get the fundraising campaign in gear before construction of the new project can begin, he said.