The proposal to transform a historic six-storey Gooderham and Worts building into a boutique hotel in the Distillery District isn’t what has city planners shaking their heads.

It’s the 27-storey condo above it.

Designed by famed Flatiron architect David Roberts Jr. and built in 1875, the red brick building on the northeast corner of Mill and Trinity Sts. is protected by a heritage designation and zoning that restricts any additions above its 16.5 metre height. The combined hotel-condo would be 34 storeys.

“There are going to be issues around the height, adding on and introducing a tall building at this location,” said Gregg Lintern, director of community planning for Toronto and East York district. “When you’re inside the Distillery and look north, the perspective you see is a heritage district and this would be at the top.”

But he says the city isn’t against a hotel. “The issue isn’t the use. It’s how it gets executed.”

A staff report outlining issues with the proposal will go to Toronto and East York Community Council in early January with a recommendation for a community meeting Jan. 23.

Mathew Rosenblatt and John Berman, two of four partners in Cityscape Development, which co-owns the Distillery with Dundee Realty, say they need the sale of condos to offset the costs of transforming the historic rack house into a boutique hotel. The storage house still has its original dirt floor and six storeys of timber racks that once held 22,000 barrels of aging whisky.

For years, Cityscape tried to find hotel investors, constraining proposals to meet the zoning requirements. About a year ago, they started putting together a new plan that included a six-storey hotel with 27 floors of condos above and an amenity floor in between.

“Everyone has come to the realization that it’s a very challenging project,” said Rosenblatt, noting it’s much more expensive to repurpose and restore a heritage structure than to build a new one.

Rosenblatt and Berman say the hotel is not only a strategic decision in a neighbourhood underserviced by hotels, but critical to the long-term vision of the Distillery.

“The historic precinct has been restored, but it needs life day and night. The hotel will add life and energy,” said Berman.

“This is important to the Distillery’s long-term success as well. Look at how the Gansevoort has reinvigorated (New York’s) Meatpacking neighbourhood,” he said, referring to the luxury boutique hotel which opened in 2004.

Gansevoort is also the hotelier most closely associated with the Distillery project. Berman said they have had extensive talks with the company, but “haven’t made any firm commitments.”

The hotel is one of Cityscape’s last developments in the Victorian-era Distillery District that dates back to 1832, the year author Charles Dickens turned 20. The company purchased the precinct in 2001 and has since restored 44 buildings.

Future plans call for a new five-storey structure at the site of the south parking lot, which will move underground.

Part of the problem is that development of the Mill St. property was never included in a master plan for the area created in the 1990s, before the current owners purchased it, said Lintern. In the meantime, a certain amount of highrise development has been allowed in exchange for the heritage conservation and revitalization undertaken by Cityscape.

Lintern acknowledged “it’s a difficult building to repurpose without gutting it or adding height. But is this the right way to do it? We need to have a community meeting about it.”

For his part, Rosenblatt argues that the hotel proposal should be considered on the basis of “planning and what’s better for the Distillery,” which attracts around 2 million visits a year.

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About 200,000 people recently came through the Lowe’s Christmas market.

“It’s not Black Creek Pioneer Village,” said Rosenblatt. “This is where people live, work and visit. If these areas are encased and preserved, who will want to go and see them?”

A plan to build a 34 story hotel/condo in the Distillery district is drawing fire.