YOUNGSTOWN — The Youngstown Board of Control signed a nonbinding memorandum of understanding with the only firm to submit a proposal to redevelop 20 Federal Place, a nine-story downtown building owned by the city.

The agreement, approved Thursday by a 3-0 vote, allows the city to “enter into into an exclusive project due diligence period” with Bluelofts Inc., the Dallas-based redevelopment firm “not to extend beyond Oct. 15, 2025, to finalize a ground lease agreement and the P3 (public-private partnership) structure and financially close the bonds and commence construction,” according to the deal.

The proposal also calls for Bluelofts to redevelop a city-owned parking lot on Commerce Street by the rear of 20 Federal Place.

The agreement could be extended 60 days by mutual written consent.

Under the proposal, Bluelofts is teaming up with Madrone Community Development Foundation of Berkeley, California, which would own the building through a nonprofit charitable organization. The city, which owns 20 Federal Place, would retain ownership of the ground underneath the building.

Bluelofts, the only respondent to the city’s request for redevelopment of the building, is proposing a $57 million project.

The building would be renamed The Federal, the same name of a building a few yards from 20 Federal Place on West Federal Street.

The building 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 a 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 that has about 200 spaces. At a Dec. 10 public meeting about the project, a deal to lease 66 parking spaces in the lot was discussed. The lot is under consideration to become a parking deck.

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 underway, 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 but seems to have been pushed aside by the city.

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

‘UNKNOWN’

Asked if he was optimistic about working with Bluelofts, Mayor Jamael Tito Brown, chairman of the board of control, said “I’ll say unknown. This is a new type of project that we’re working on. All city buildings, you own it and you’re going to start working with a third party, a private entity. That gives you unknowns.”

Bluelofts has purchased properties in Cleveland, Dallas, Fort Worth and Atlanta with plans to convert them into residential space.

But the only project it has completed is the former Ohio Bell headquarters, now called The Bell, in Cleveland that was redeveloped into 367 market-rate apartments with some retail and commercial space available.

That happened with the assistance of another developer after its initial partner, Wolfe RC Management LLC, faced foreclosure in its stake in the 16-story property. Wolfe is a frequent partner of Bluelofts and lost two other projects to foreclosure.

Madrone’s website states it primarily helps local governments, public agencies and higher education institutions acquire, develop and construct facilities including infrastructure and housing facilities. It does not cite a single project.

An online search showed Madrone helped form a public-private partnership earlier this year on an $85 million, 540-bed student housing complex for the University of Memphis with the city of Memphis, Tennessee, involved with the project that is to open in fall 2026.

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.