Fredericton Mayor Brad Woodside says he's confident a developer will come forward.

The City of Fredericton is going to try once again to have a hotel built next to the downtown convention centre.

Council voted Monday night to spend $800,000 to buy back three properties along Queen Street for the hotel project.

A developer had purchased the properties as part of a package deal to build a convention centre, parking garage and hotel, said Mayor Brad Woodside.

But the developer decided to build the hotel on Bishop Drive instead, leaving the downtown without a new hotel.

So the city will buy the properties back, remove the existing structures, and "immediately" issue a call for proposals, Woodside said.

The mayor says he's confident a developer will come forward to buy the properties from the city.

Taxpayers could be on the hook

If not, the city will be left with three properties and $800,000 on a line of credit.

Kevin Lacey, the Atlantic director of the Canadian Taxpayers Federation, says that would not be in the city's best interest.

"Their options are really limited. They really have to try to get a hotel into that property so that it can help to make the convention centre viable," Lacey said.

"Without the hotel, then it does raise questions about the convention centre. Potentially taxpayers could be on the hook for more losses."

The Fredericton Convention Centre has lost the business of about 10 large groups since it opened last year due to a lack of a hotel, according to manager Cathy Pugh.

The $28-million centre's managers had estimated the new facility would host 220 events during its first year of operation, but it fell short, with only 192 events.

Pugh said the initial estimate depended on the opening of an attached office tower and a nearby hotel.

D.P. Murphy Inc., of Charlottetown, had planned to build a Hilton Hotel as part of the convention centre complex.