The co-operative that runs the Halifax Seaport Farmers' Market has voted overwhelmingly in favour of handing the market over to the Halifax Port Authority.

CBC learned Tuesday the co-op had been debating whether to seek creditor protection or hand over the market to the Port Authority.

The market on the Halifax waterfront is $9 million in debt and facing a lawsuit from the contractor who helped build it.

Seaport Market Board Director Chris de Waal recommended the co-op surrender the 40-year lease to the Port Authority, even though that means the co-operative would dissolve.

De Waal said he is pleased with the outcome, despite the circumstances.

"This was the best alternative for our organization," he said.

Forty-two of the 48 co-op members voted to have the lease taken over by the Port Authority.

De Waal said the Port Authority will not take on the $9 million debt load.

"Likely what will end up happening is CMHC will dissolve as an organization and go through the bankruptcy process."

But when it comes to the vendors, de Waal said he is confident this is the best path.

"We didn't want to see the market interrupted, we didn't want vendors to lose their opportunity in selling to the public, we didn't want farmers to have their income stream upset," he said.

Options for the Seaport Market

The co-op had two options going into to Tuesday night's meeting.

One option was to seek creditor protection for at least 30 days. The market would use that time to develop a plan to improve operations and manage its debt in a way acceptable to creditors and the court. There would have likely been a major overhaul of who runs the co-op.

The other option was to surrender the lease to the Halifax Port Authority.

Vendor, Co-operative President and Chair of the Board Dave Belt said there are positive sides to that decision.

"One of which is the infusion of cash that we so desperately need to hire an executive director here and also to make a number of the design changes that need to be made here, not only in the flow of traffic but also there are many structural issues that remain unresolved," he said.

The market is in a state-of-the-art, environmentally friendly building, paid for by three levels of government and more than a million dollars from people who bought in through an investment fund.

It is still not clear if individual investors such as Susan Bennett, who spent $5,000 on the project, will see their money again now that the Port Authority option has won. Regardless, Bennett said it's the best way to go.

"The port authority, I think, has already made good decisions and why not let them go for that," she said. "I think it's easier. To me, it's like an easier solution as well."

According to the memo, the Port Authority "intends to make an immediate significant capital expenditure to improve the building, operations and promotions." The HPA is pitching a "seamless transition" that would not be noticed by customers.

Vendor Darren Poirier, who owns Wrap So D Catering at the market, said he's made up his mind, but refused to say which way he's going to vote.

While either decision will have long-term ramifications, Poirier said he's feeling optimistic.

"If my option, the one I'm in favour of is the one that is selected, I have full confidence that it will be where it needs to be," he said.

The Seaport market opened in its new location in August 2010 as a six-day market. But the new facility hasn't drawn big crowds on weekdays.

In November, a New York-based consultant suggested the market scale back and amend rules for vendors.