I really don't think "it's a surface parking lot now" is an excuse to for building what looks to be a clunky, monolithic building. The "Parcel 4" parking lot across from the CMHR is a huge eyesore that's embarrassing to this city, but no one thought that that was a good enough reason for Canalta to build some ugly highway strip motel/waterpark there. I think the same goes for big parking lots in South Portage.
Bdog is right: no matter how strong the residential population, it's not enough to warrant continuous storefronts on every street. (Even in great neighbourhoods in Manhattan, lots of the side streets have few storefronts.)
What I think would be ideal for that surface parking lot, as well as the other massive, publicly-owned surface parking lots in that neighbourhood, is that they are subdivided into smaller lots and sold off to developers who build smaller residential buildings. Nothing necessarily fancy or expensive, just a dense collection of smaller multi-family developments. If someone wants to build mixed-use, or build taller, that's great. But low-rise isn't bad. Streetscaping on lower traffic streets (Carlton, Edmonton, and Hargrave) could be narrowed and/or converted to two-way traffic, and trees planted on the boulevards.
***
As much as I salivate thinking about all the economic spin-offs of having twice as many
MGEU conventions and City of Winnipeg career symposiums (I mean, downtown has been THRRRRRIIIIVING since the original WCC opened in the mid-1970s), demand for convention space in North America is shrinking. (Read about it
here,
here,
here,, and
here.)