The cost of demolishing Winnipeg's old police headquarters and the Civic Centre Parkade has risen to $12.1 million — and the city is poised to borrow money to make it happen.

City property managers want permission to set aside money in next year's budget to remove hazardous materials from the Public Safety Building on Princess Street and the adjoining parkade, demolish both structures and prepare them for redevelopment and sale.

In a report to council's property committee, city building managers are requesting a $12.1-million budget for the project, up from a $10.7 million projection this year. The city would borrow $10.5 million to make this happen, as the Winnipeg Parking Authority does not have enough money set aside for the job.

The city plans to redevelop the entire site, which downtown development agency CentreVenture has rebranded as the "Market Lands."

CentreVenture has expressed a preference to see the site house a mixed-use development of some form. The southern portion of the site must have some form of public use, thanks to a caveat placed on the land when it was donated to the city in 1875.

The Public Safety Building closed in 2016 after the Winnipeg Police Service moved into its new $214-million headquarters on Graham Avenue. The construction of that project remains under RCMP investigation.

Council approved the demolition of the PSB after a city-commissioned report concluded it would be too expensive to redevelop the six-storey building, originally built as part of a modernist ensemble of civic centre campus structures.

The Civic Centre Parkade, to the immediate north, was shuttered in 2012 because of structural issues and nearly a decade of deferred maintenance.