The owner of the vacant Osborne Village Inn plans to reopen the property this fall with small furnished apartments on the upper storeys and commercial tenants on the main floor and in the basement.

Fusion Capital Corporation, which purchased the Osborne Street property in January 2016, originally planned to develop a restaurant and then entertained two purchase offers that never closed.

Fusion president Ross Ransby says the current plan involves renovating the two upper floors to create furnished "micro-apartments" of 275 to 450 square feet. The monthly rent will range from $975 to $1,400, including utilities, he said.

The main floor will be rented out to commercial tenants that could include a restaurant, grocery or pharmacy, Ransby said. The basement could be converted into a spa or even a bowling alley, he said, noting there are few supporting columns that could restrict potential reuses.

"Our plan is to lease it out and hold it as a trophy asset," said Ransby, speaking in a telephone interview from Las Vegas. He said a total of 18,000 square feet is up for lease.

Fusion Capital bought the Osborne Village Inn in 2016. Its original redevelopment plan fell through. (Julianne Runne/CBC) The original redevelopment plan proved to be too ambitious, he said. "It was pretty intricate and we weren't up for it at the time," he said.

Adding storeys to​ the building proved impossible because a planning framework for Osborne Village restricts the height of structures to four storeys in that location, Ransby added.

The new plan amounts to a renovation, as opposed to a reconstruction. Both the hotel and the building that houses its vendor will be renovated.

"There's a lot of history in there and we want to maintain that. Our plan was never to knock it down and we don't want to knock it down because it's an icon for the area," Ransby said of the hotel, which used to house a pair of live-music venues, The Zoo and Ozzy's.

The vendor at the rear of the hotel will close at the end of the month, Ransby said. Without hotel rooms, the liquor license has been suspended.

The renovated apartments should be up for rent this fall and commercial tenants could be in place by then as well, Ransby said.

Fort Rouge-East Fort Garry Coun. Jenny Gerbasi, who represents Osborne Village, said she's pleased there will be more housing options in her ward.

"A lot of people are anxious to see something happening there," she said. "People want to see the hotel spruced up."