Photograph by: Times Colonist, .

A housing complex for low-income people will share the site of a $300-million luxury condominium project at the former Hudson Bay store site in downtown Victoria.

The provincial government announced yesterday a $32-million non-profit residential housing tower, called the Hudson Mews, will stand among the luxury condos at the development known as The Hudson.

The Hudson's developer, Rick Ilich, president of Townline Group of Companies, joined in the announcement with Housing and Social Development Minister Rich Coleman and Victoria Mayor Dean Fortin. Townline is redeveloping the block bordered by Douglas, Herald, Fisgard and Blanshard streets.

Townline will sell land to the province for 80 per cent of market value. The province, in turn, is seeking expressions of interest from non-profit housing providers who will own and administer the rental units.

"It will be approximately $4 million [the land's sale price to the province], and our costs in the land will be about $4.9 million, so we're giving up about $900,000," Ilich said. When asked if Townline will see any tax benefit from the sale, Ilich laughed and said, "I'd like one, but I'm not getting it."

TL Housing Solutions Ltd., a developer of non-market housing, will develop the site. Construction is to start this spring. When complete, the block will encompass the original Hudson's Bay building, extensively renovated, along with three residential and commercial towers.

The 13-storey Hudson Mews will front Fisgard Street and house 120 home-ownership and rental units, as well as an 840-square-metre commercial space on the ground floor.

Coleman said Hudson Mews units will rent or sell for 90 per cent of market value.

Ilich said the economic downturn has created new opportunity for the public sector to develop affordable housing in Victoria. "As much as this has been a horrible economic downturn for all of us, it has certainly driven construction costs down."

The City of Victoria is contributing $800,000 toward the rental units.

jhatherly@tc.canwest.com