The once-troubled St. Regis Hotel in downtown Winnipeg has been sold to an Ontario developer that plans to turn it into a parkade and a retail complex.

The hotel was purchased in 2013 by CentreVenture — the city's arm's-length downtown development agency — with the goal of reducing incidents of intoxication in Winnipeg's downtown. The hotel no longer has a liquor licence.

On Wednesday, CentreVenture announced it was selling the hotel and adjacent parking lot on Smith Street for $4 million.

The deal is subject to a development agreement with Fortress Real Developments Inc. that would include a 625-stall parking structure and commercial/retail complex. Construction has to begin by 2017 or the deal will be scrapped.

Two years ago, the same company announced plans to develop condos just down the street from the St. Regis, called SkyCity Centre Winnipeg. It's supposed to be the tallest skyscraper between Toronto and Calgary on a parking lot on northwest corner of Graham Avenue and Garry Street.

Fortress is now in the process of constructing a sales office for the condo tower.

CentreVenture also announced the sale of a small surface parking lot on on Garry Street to a subsidiary of Venexo Corporation. The property will be used for patrons of the recently-opened Pint Public House and Sports Bar.

CentreVenture president and CEO Angela Mathieson said Fortress provided a $1 million down payment toward the purchase of the St. Regis and CentreVenture has arranged a mortgage for the company for the balance of $3 million through its urban development bank.

Developments take time

Mathieson said Fortress has lots of work ahead.

"These developments take time, takes work, takes investment, takes risk. Now that's in their hands and we are hopeful they are successful," she said.

Just down the street from the St. Regis, construction hasn't started yet, but the SkyCity Centre condo project website says the $150 million-plus development is "full steam ahead."

Mathieson said the development agency has a total of $7.7 million invested in the St. Regis project, including the purchase of the hotel, legal and real estate fees and taxes.

The province provided a $2.8 million grant for the purchase.