YOUNGSTOWN — With a nonbinding memorandum of understanding signed, Bluelofts Inc. will start a market feasibility study later this month for the potential redevelopment of 20 Federal Place, a vacant nine-story downtown building owned by Youngstown.

The feasibility study will look at Bluelofts’ proposed redevelopment project for the building at 20 W. Federal St. to determine if it will work in the Youngstown market, said Doug Rasmussen, CEO and managing principal of Steadfast City Economic & Community Partners, the city’s St. Louis-based consulting firm on this project.

The study should take about six weeks to complete, Rasmussen said.

Bluelofts, a Dallas firm, is proposing a $57 million project at the building, which will be renamed The Federal. It would have 100 apartments to house 180 people in one-to-three-bedroom units with 43 of the apartments being affordable / workforce housing at 80% median income rent as well as 30,000-square feet of commercial space, a small wellness center, and e-commerce and mini-warehouse space on the first two floors for smaller businesses.

The project also calls for 62 parking spaces in the basement and the redevelopment of the city-owned parking lot at the rear of the building, which has about 200 spaces.

The city’s board of control signed the nonbinding MOU on Dec. 19 with Bluelofts that gives the company “an exclusive project due diligence period” until Oct. 15 “to finalize a ground lease and the P3 (public-private partnership) structure and financially close the bonds and commence construction.”

Bluelofts is teaming with the Madrone Community Development Foundation of Berkeley, California, which would own the building through a P3. The city, which currently owns the building, would retain ownership of the ground underneath it.

Bluelofts’ proposal is to start construction in October and be finished around June 2027.

The building has $10 million in state historic tax credits and $14 million in federal historic tax credits that expire at the end of 2025 if a project at the building isn’t started, which provides a sense of urgency for the city.

The tax credits were awarded in December 2023 to Desmone Architects, the Pittsburgh company that was initially leading the building’s redevelopment. Rasmussen said Desmone has been retained to serve as the project’s architect.

The project’s plans have undergone changes since Bluelofts was the only firm to submit a proposal to the city for 20 Federal Place by a Sept. 16 deadline.

Bluelofts initially was going to work with a different nonprofit organization on the P3 to build 112 units, with half being affordable / workforce housing, at a cost of $50.85 million, according to its proposal obtained by The Vindicator through a public records request to the city.

Rasmussen said it’s typical for a project to change from its initial proposal.

“It’s fair to say the project will go through further changes,” Rasmussen said. “There’s always adjustments based on data. It’s a very natural progression.”

Bluelofts will spend the next 10 months working out the financing of the project, Rasmussen said.

“It’s financial due diligence and bonding,” he said. “It’s a 10-month process of lining up financing. It’s financing and construction and ultimately going out to the bond market and getting the project started in October. They’ll have their own bond counsel.”

Ike Bams, Bluelofts’ co-founder, wrote in the proposal: “Our plans hinge on this project approved as a public-private partnership by the city of Youngstown. This collaboration ensures that the redevelopment benefits residents and addresses governmental challenges. Our aim is to support the district and its community by reducing governmental burdens and delivering public benefits.”

Bams added: “We believe this development will significantly enhance community well-being by turning the area into a lively district. The influx of new businesses and residents will create a dynamic environment where employers and families can thrive. This growth will expand the city’s tax base, ensuring steady revenue to cover expenses, pay off district debt and fund essential services that improve quality of life for residents.”

Bams also mentioned Bluelofts’ “proven track record of transforming underutilized space into thriving hubs (that) speaks volumes about our capabilities.”

While Bluelofts is working on redeveloping properties in Texas, Georgia and Missouri, it’s only completed one project. That is the former Ohio Bell headquarters, now called The Bell, in Cleveland that was redeveloped into 367 apartments with some retail and commercial space available.

That happened after Bluelofts’ initial partner faced foreclosure on the property and another developer stepped in.

The city purchased 20 Federal Place in November 2004 after Phar-Mor, a national retail store company, went out of business. The property was the Phar-Mor Centre, the company’s corporate headquarters. Before that, the 332,000-square-foot building was the flagship location of Strouss’ department store for many decades.

There were 19 tenants, taking up about 20% of the building, before eviction notices were sent in July 2022. Some tenants were given an extension before leaving, but it’s been completely vacant for more than two years.

A city-hired contractor finished a $7.4 million asbestos abatement remediation and partial demolition project in October – after lengthy delays – at the building. The city received a $6.9 million state grant for the work.