Thunder Bay city hall says a planned youth centre project with the Indian Friendship Centre will not proceed.

The two partners were unable to secure capital funding from Ottawa or Queen's Park to transform the former Prosvita centre on High Street into a youth centre.

The city made the announcement during Monday night’s council meeting.

Administration was directed not to extend the city’s option to purchase the building and property at 540 High Street South (currently the Prosvita).

The proposed $8.1 million project was previously approved in principle by council under a two-phased construction program including a Youth Centre (phase 1) and a new Friendship Centre programming and office addition (phase 2).

The city had been prepared to contribute a one-third share toward capital ($2.5 million) as well as operating funding starting in 2015 ($300,000 a year), as long as provincial and federal funding was secured first.

"We met with Minister Zimmer from the province and he was excited by the project but we were told right from the start that, if federal funding wasn't forthcoming, that we would be in trouble,” said Mayor Keith Hobbs.

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Caption: Thunder Bay Mayor Keith Hobbs says the city will look at other options for youth centres. (Brent Linton/Canadian Press)

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“And federal funding isn't forthcoming. I met with Minister Valcourt face-to-face and asked him that specific question and he referred the issue to the Indian Friendship Centre fund that's out there ... There is no specific funds set aside by the feds for this project, thus the province won't fund it and so we're pretty dead in the water."

City clerk John Hannam, who also has responsibility for the Aboriginal Liaison Office, said the “city’s support did not leverage the kind of capital funding package that would be required to acquire, renovate and build the facility as envisioned.”

Hannam said his office has “worked hard in partnership with the Indian Friendship Centre for two years on a Youth Centre, as part of a larger project to move the Friendship Centre from its existing overcrowded Cumberland Street facility.”

Hobbs said the city will look at other options for youth centres.

“That project is dead but the whole youth issue is in our strategic plan, and our citizen satisfaction survey,” he said.

“So I think we just have to look at other options that are cheaper.”

Administration will report back to council on the matter April 7.

A spokesperson for the Thunder Bay Indian Friendship Centre could not be reached on Tuesday for comment on this story.