True North is the company that wants to develop on the Carlton Inn site.

CentreVenture chair Curt Vossen told members of the mayor's executive policy committee on Monday that the owners of the Winnipeg Jets signed a deal with CentreVenture.

This at the same time Stuart Olson construction still had an agreement with the Winnipeg Convention Centre to build a hotel on the Carlton land as part of the convention centre expansion agreement.

Councillors have concerns CentreVenture’s actions interfered with Stuart Olson's plans.

"I know that the citizens of Winnipeg are very frustrated,” said Coun. Marty Morantz (Charleswood-Tuxedo).

Feeling they had no choice, members of EPC voted Monday to let Stuart Olson out of the deal, allowing the construction firm to pay a $3.75 million penalty, a far cry from the $16 million the city could have recouped.

Mayor Bowman spoke out Monday.

"We still have to make a decision based on a number of bad options,” said Mayor Bowman.

True North released a statement, saying it plans to build a hotel, office space, residential and retail spaces and a plaza on the combined Carlton Inn site and lot across the street.

“True North is now undertaking a thorough due diligence exercise involving these lands, the purpose of which is to determine the viability of a very significant mixed used real estate development for downtown Winnipeg," it said.

“This was the first and only credible proposal that's surfaced in the last 30 months,” Richard Olfert from CentreVenture told EPC Monday. "The company behind the proposal has a sterling record of doing what it says."

True North may not be able to move ahead just yet.

The mayor and his team passed a motion to put the Carlton Inn site out for a public expression of interest to see if anyone else can trump True North's proposal.

"It would have been better had that option agreement been subject to council approval - that's the reason we’re here we're playing clean up," said Bowman.

CentreVenture, meanwhile, said its deal with True North is binding and it does not expire until June.

Mayor Bowman maintains this must be an open process and it will go to an expression of interest.

- with a report from Jeff Keele

True North - Carleton statement