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This article was published 20/1/2015 (2069 days ago), so information in it may no longer be current.

Winnipeg's downtown development agency worked against a private effort to develop a hotel north of the RBC Convention Centre last fall - without disclosing to city council it had already signed an option on the same land.

Multiple sources say CentreVenture dissuaded a commercial real estate firm from working on behalf of Stuart Olson construction to develop a hotel adjacent to the convention centre, which is undergoing a $180-million expansion.

WAYNE GLOWACKI / WINNIPEG FREE PRESS FILES The Carlton Inn was demolished to make way for a new hotel complex on the site.

Stuart Olson's winning bid for the construction work called for it to build a hotel adjacent to the convention centre, at no cost to the public purse. Stuart Olson's original hotel-building partner, Dallas-based Matthews Southwest, left the project in 2012.

Later that same year, CentreVenture bought the former Carlton Inn for $6.6 million, using an expanded City of Winnipeg line of credit, as part of an effort to assist Stuart Olson.

Those efforts wound up at cross-purposes in November 2014, when CentreVenture sent a letter to Colliers International - the firm tasked by Stuart Olson to bring a hotel to the table - asking the real estate firm to stop portraying itself as the sole representative of the owner of the land at 220 Carlton St.

'It looked like we had two separate deals in place for the same piece of land' ‐ source close to hotel-development effort

"They were technically within their right to do so," said one source familiar with the hotel-development effort, speaking on condition of anonymity. "Stuart Olson interpreted this as frustrating and determined it could no longer proceed."

Stuart Olson was supposed to forfeit $16 million of construction compensation for the convention centre job if it failed to build a hotel. Additional hotel capacity in the area around the convention centre is a crucial component of the expanded facility's business plan.

Sources assert the CentreVenture letter jeopardized the terms of that deal, prompting negotiations that led to Stuart Olson to agree to pay $3.75 million in exchange for being released from its obligation to build the hotel.

That deal will be considered by city council's executive policy committee on Wednesday.

If approved by council, it would see the convention centre forward the money to the city to reduce the cost of purchasing the Carlton Inn.

That report notes CentreVenture is working with "credible developers" on a development plan for the Carlton Inn site.

Unbeknownst to city council and the convention centre's board, CentreVenture had signed an option to develop that parcel of land in 2014 before Stuart Olson gave up its own efforts to place a hotel on the site.

Members of city council and convention centre board members were told of this option no later than last week.

"It looked like we had two separate deals in place for the same piece of land," said another source close to the hotel-development effort.

Angela Mathieson, CentreVenture's new president and CEO, said Monday she could not confirm the existence of this option.

Former president and CEO Ross McGowan was not immediately available to comment Monday evening.

Mathieson said Friday it would be premature to commit to the placement of the hotel at the former Carlton Inn site, noting the entire sports, hospitality and entertainment district should be considered.

Sources claim True North Sports & Entertainment, which owns the Winnipeg Jets, is interested in building that hotel at 225 Carlton St., a surface-parking lot owned by Manitoba Public Insurance, east of the Carlton Inn site.

A one-year option to develop that site was awarded in 2012 to Winnipeg's Artis/Longboat Group.

The same sources claim True North has separate plans for 220 Carlton St.

The new hotel serving the convention centre must be connected to it by a skywalk, said convention centre board chairman Bob Silver, a co-owner of the Winnipeg Free Press.

True North would neither confirm nor deny its interest in the former Carlton Inn site.

"We're a strong supporter of our downtown and any initiatives that would further enhance our downtown community, and we'd always look for chances to participate in development opportunities," True North spokesman Scott Brown said in a statement. "When those chances become available or at least an investment in a development is possible, I think we'd be more willing to talk."

Mayor Brian Bowman noted he expressed disappointment last week with the "quantity and quality" of information about the convention centre hotel provided by the public service.

On Friday, he suspended acting chief administrative officer Deepak Joshi. Executive policy committee will consider that suspension at its meeting Wednesday.

bartley.kives@freepress.mb.ca