Winnipeg city council has paved the way for a new parking lot in the Exchange District, but it means the demolition of an old downtown building.

The three-storey Grain Exchange Annex on Lombard Avenue, built in the 1920s, has been vacant for years. It is located next to the historically protected Grain Exchange building.

The historical buildings committee proposed last year that the Annex be given a Grade III heritage status — a designation for buildings that represent moderately significant heritage — and put the building on the city's conservation list. The proposal was rejected by the city in May.

Critics of the demolition, approved Wednesday by city council, said the move to knock it down for parking space sets a poor precedent.

But Cindy Tugwell, executive director at Heritage Winnipeg, was not opposed to it.

Coun. Coun. Mike O'Shaughnessy, who voted for the demolition, said no one wants to move into the building.

"Do you think it would be going down if they could rent out the space?" he said. "Nobody wants it who has to put up money to be there."