Business magnate David Asper needs cash from new Polo Park development to pay for new stadium. But a slow retail environment may put a snag in that plan. (CBC News)

A sluggish retail market has put the brakes on a major development in Winnipeg's St. James neighbourhood near Polo Park shopping mall, CBC News has learned.

Local developer Shindico planned to begin work this fall on a three-hectare piece of land occupied by the Winnipeg Arena and the former site of a network TV station.

But now the company is saying a slow economic and retail sales climate means it could be 16 months before shovels bite the ground.

The news comes at a critical time for the would-be owner of the Winnipeg Blue Bombers football club, who is also counting on a development in the area.

'There's no question this isn't the best time to do it.'

—Mayor Sam Katz

The City of Winnipeg has a memorandum of understanding with David Asper to sell the current Winnipeg stadium to his real estate company, Creswin Properties.

The stadium would be torn down so Asper could redevelop the site for retail tenants. The money from that development is critical to helping Asper finance a $150-million, 30,000-seat stadium at the University of Manitoba.

Asper calls the shopping mall the "economic engine" of his plan to purchase the team. He has said some negotiations with retailers will be completed this month.

An Asper spokesperson said an announcement will come in the next few weeks.

But Winnipeg Mayor Sam Katz said it's apparent times are tough.

"A lot of [interested parties] have pulled back on the capital they have. There's no question this isn't the best time to do it," Katz said.

Shindico president Sandy Shindleman said tenants normally interested in setting up shop in the Polo Park area are being cautious but are willing to meet.

"Sometimes the meeting results in an offer going back and forth within a few weeks, and sometimes it's months or years. We're moving forward towards the latter to get things done," Shindleman said.