The fire broke out around 5:30 a.m. PT and by the time firefighters arrived smoke was pouring out of the main floor.
Firefighter Kevin McKinnon says they kept the fire contained, but there is a significant damage to the entire main floor.
"I was on scene probably about four minutes after the call came in. We got water on the building very quickly and kept it contained to the front part of the building," said McKinnon.
No injuries were reported in the fire.
Mayor Brian Taylor says he has been told the city documents were saved. He remains hopeful the iconic building in the centre of town can be rebuilt.
"It goes back to the turn of the century and we're hoping it's something we can restore," said Taylor.
Officials say a structural engineer will first need to determine if the two-storey building is safe to enter.
No charges have been laid in the investigation, but Staff Sgt. Darryl Little says they are talking to a man found near the building.
"At this point we do have a person of interest in custody. We are not saying he is a suspect," said Little.
Two other downtown historic buildings were also damages by arson in March of 2012. The 102-year-old Grand Forks Hotel was completely destroyed and part of the Winnipeg Hotel was also damaged.
- Read more about the hotel fires