Chief Minister Alf Cannan says the government is working with a developer over a project on North Quay in Douglas.
The owner of the Newson's site said they wouldn't invest in the Island anymore after being refused to demolish the shop - which lies in a conservation area.
In Tynwald, Mr Cannan was asked about the site by Central Douglas MHK Chris Thomas.
Mr Cannan said the government had spoken to the developer about the scheme:
Bar George debts case heads to court
A court case involving a Douglas bar which shut its doors last year will go ahead later this month.
Do you know these men?
Police are appealing for help finding three men after an incident near a pub in Douglas.
Garage warns of pothole which broke two wheels today
A Douglas garage is warning drivers in the north of the Island about a pothole which has claimed two victims today.
TT riders will miss special Bray Hill tree
A TT rider says he'll miss an iconic tree on the course, which has been cut down.
Inflation steady at 3.3 per cent
The government says inflation remained level last month, at the same rate as December's 3.3 per cent figure.
Less than one percent of buildings on council blacklist
Only a quarter of one per cent of buildings in Douglas are on a council blacklist.
Senior Tynwald committee to look at healthcare funding
Senior figures in the Island's healthcare system will appear before a Tynwald committee looking into healthcare funding this week.
Government apologises after child benefit problems
The government's apologised after nearly 800 people didn't get their child benefits today.
