The P.E.I. government has agreed to loan more than $5 million to the company redeveloping an historic building in downtown Charlottetown.

Pan-American Properties, owned by Island property developer Tim Banks, recently purchased the Kays Building on lower Queen Street from the Charlottetown Area Development Corporation.

Banks says the total cost to redevelop the building will range between $6 million and $7 million.

The province has offered a loan of $5,250,000.

Banks said he hasn't decided yet whether to take the government loan, or seek financing elsewhere.

He says the former wholesale grocery store will house a mix of retail and office space.