Developer Tim Banks would have to acquire the old Kays building from the Charlottetown Development Corp. before his hotel project could go ahead. (CBC)

A P.E.I. developer says he plans to build a new hotel in downtown Charlottetown.

The $22-million hotel would be located near the waterfront at Queen and Water streets, said Tim Banks, the president of APM Group. It would have 120 rooms and incorporate the historic Kays Brothers building, he said.

There would also be apartments and condos on the fifth and sixth floors, Banks said.

He said he is talking to hotel chains such as the Marriott and Hilton and already has options to purchase on some of the properties.

Banks would still have to acquire the Kays building from the Charlottetown Area Development Corp., which purchased the former wholesale company building last fall.

Recent studies show a need for another 200 quality hotel rooms in the city, particularly if Ottawa and the provincial government go ahead with a new convention centre on the waterfront, Banks said.

That project, planned for the space now occupied by the Coast Guard and Fisheries and Oceans, is expected to get the go-ahead this spring, which would allow Banks to start construction of a hotel in September.

Banks's project would be the second new downtown hotel. Homburg Investments is building an 82-room hotel on top of the Confederation Court Mall.