A massive hole that‘s collected rainwater in Victoria’s downtown since 2007 could be filled starting as early as next month.

Work is about to start on the first phase of Hudson Walk, the next step in Vancouver-based Townline’s re-imagining of the land surrounding the historic Hudson’s Bay building.

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The first phase of Hudson Walk, which is expected to have its building permit approved this month, straddles a block bordered by Herald Street and Caledonia Avenue that was to have been the site of the $160- million Radius project — abandoned eight years ago by Waywell Developers.

Hudson Walk is a mixed-use project featuring 170 units of rental housing, most of them in a 16-storey tower, and a small component of commercial space that could be completed over 20 months.

Chris Colbeck, Townline’s vice-president of sales and marketing, said the decision to go with rental housing on the site — where Waywell originally planned office, commercial and condo development — is based on demand.

“The market for rental is strong at the moment while presales are more challenging,” he said. “The building architecture, style, quality and layout of the homes could easily be condos if we so chose to go that direction. Should the market skyrocket again, we have options and haven’t limited ourselves by product design. But we are building, financing and proceeding that this is a rental building.”

There’s little wonder given Hudson Mews, which Townline put on the rental market last year, rented all of its 120 units within two weeks. “I could have leased that building out two times over,” said Colbeck. “There’s big demand for inner-city, concrete, condo-styled brand new rentals.”

Ken Cloak, Colliers’ Victoria multi-family residential expert, said last year 348 units of new purpose-built rental housing was added to the mix in Victoria. “For the most part, virtually all of it has been absorbed. The dynamic right now is our vacancy rate for that purpose-built housing is reduced by half from 2.8 per cent to 1.5 per cent.”

Cloak said the market is being driven by improved employment in the 25-34 year-old range who favour a downtown lifestyle.

Hudson Walk’s units will include studio, one-, two- and three-bedroom units as well as eight townhomes. There will also be 8,500 square feet of commercial space along a carriageway that will complement the retail offerings at the rear of the Hudson project.

The residential side of the project will offer residents a lounge, gym, underground parking and appliances in their suites.

Townline has yet to determine what the second phase of Hudson Walk, which will be bordered by Caledonia Avenue and Blanshard Street, will look like.

Colbeck said there are no definitive plans for the projects that will finish off the Hudson district — buildings that will line Blanshard Street currently housing what’s left of the Bay’s old parkade.

Victoria Mayor Lisa Helps welcomed Townline’s plans. “It’s fantastic. The north end of downtown is becoming a real magnet,” she said.