Construction is well underway on the redevelopment project at the Woodward's heritage site on West Hastings Street in Vancouver. (CBC)

A major redevelopment project envisioned to help revitalize Vancouver's Downtown Eastside almost fell through before construction even began last year, CBC News has learned.

There was a lot of backroom discussion that kept the Woodward's project afloat, Bob Rennie, project marketer, said Thursday.

The old Woodward's building in the 100 block of West Hastings Street is being redeveloped in order to house Simon Fraser University's School for the Contemporary Arts, social housing and retail space.

But SFU almost pulled out because of financial difficulties, which could have killed the whole project, Rennie said.

Warren Gill, vice-president of SFU, told CBC News the university could not find the money to complete the project.

Bob Rennie, who is marketing the development, says a lot of backroom discussions have kept the project afloat. (CBC)

"Our board of governors looked at what we are working on and said, 'We don't know if we can go forward with this kind of arrangement,'" Gill said.

Rennie said he sought help from the B.C. government.

"I said to (Housing Minister) Rich Coleman, 'If we lose Woodward's, you can stick a fork in the Downtown Eastside forever, because no developer is going to take a chance of going in there," Rennie said.

After numerous discussions, Rennie said the province announced a $49.3-million contribution towards SFU's new art school in November of last year.

The 11,845-square-metre school, scheduled for completion by late 2009, will fill five storeys of the new development and will include public space, performance venues, teaching studios, a 400-seat theatre and a multimedia lounge and lab for new media.

Warren Gill, vice-president of Simon Fraser University, says the university could not find the money to complete the project last year. (CBC)

Gill said the university still has to raise $12 million before the art school can be moved from its Burnaby Mountain main campus to the Downtown Eastside.

But he said he's confident that the school will be able to find the money required.

The Woodward's building was built in 1903 and closed in 1993. For many decades, the department store was one of Vancouver's primary retail destinations. Woodward's was designated a heritage building in November 1996.

Several developers explored the opportunity to redevelop the building but were unable to produce a viable option.

The provincial government purchased the building in March 2001 for $22 million with the intent of spearheading a redevelopment project that could help revitalize the Downtown Eastside.

In March 2003, the City of Vancouver bought the Woodward's building from the province for roughly $5 million. Eighteen months later, city council chose Westbank Projects/Peterson Investment Group as the developer for the Woodward's project.

A city web site on the project describes it as "both practically and symbolically, key to the revitalization of the Downtown Eastside."