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:
Tin bath races mean bus diversions tomorrow
Bus Vannin's warning of some disruption in the south of the Island tomorrow as an iconic Manx sporting event gets underway.
MHK wants backing for changes to Tynwald members' pay
Do pay structures for Tynwald members need looking at again?
Storage firm announces closure
A storage business in Crosby says it's shutting its doors later this month.
Mountain Road shut for skate setup later
Part of the Mountain Road is due to close later as the Island prepares to host some of the world’s fastest skateboarders.
Bus diversions for tin bath day tomorrow
Bus Vannin's warning of some disruption in the south of the Island tomorrow as an iconic Manx sporting event gets underway.
MP criticises Island's fishing visa rules in Westminster
A Northern Irish MP says his constituency's fishing fleet is facing a major threat because of changes to Isle of Man visa rules.
Post Office won't release Evri documents as courier prepares to leave Island
Isle of Man Post Office says it won't release any of its emails or messages with courier firm Evri - which could have shown talks about taking over the service.
Strix to shut Ramsey factory
One of the Island's biggest manufacturers says it's closing its Ramsey factory and shifting production to China.
