The Des Moines City Council will consider the preliminary terms of a development agreement with a Chicago hotel group Monday for the $39.7 million renovation of the Midland Building into a four-plus-star hotel.

Aparium Hotel Group bought the 104-year-old landmark at 206 Sixth Ave. earlier this year for $2.6 million. At the time, company representatives said they planned a conversion of the former office building into a luxury hotel.

According to a report to the City Council, Aparium plans 140 rooms, a 200-person ballroom, meeting and conference rooms, and an outdoor courtyard.

The price tag includes construction and development costs as well as the cost to relocate tenants.

The city is offering property tax rebates on the value of improvements via a 15-year, graduated-scale tax increment finance package. The developers are pursuing state grayfield tax credits and state and federal historic tax credits. 

It is estimated that the hotel will generate $8.7 million in hotel/motel tax revenues to the city over those 15 years. Of the 7 cents on the dollar that is collected in hotel/motel taxes, 3 cents goes to the city, while 2 cents goes to the Convention and Visitors Bureau and 2 cents to Bravo.

The Midland was called the Hippee Building when it opened in 1913 and became one of the city’s premier office buildings. It has undergone a series of name changes and in recent years has changed ownership three times.

The late businessman Ed Boesen bought the building in 2005; however, it went into receivership after his death in 2008. In 2013, home improvement specialists Jeff and Kim Young bought the building for $1 million from Community State Bank. Two years later, a Moline, Ill.-based redevelopment group paid $2.1 million.

The Youngs and redevelopment specialists Revive Community Development Co. LLC both attempted redevelopment projects. Revive also is the owner of the historic Griffin Building at 319 Seventh St. The Midland’s current assessed value is $19,000, while the land it sits on is valued at $854,900.

An entity created by Aparium, called 206 6th Avenue LLC, has assumed a $2 million mortgage that Revive had with First State Bank of Illinois.

In recent years, the Midland has been home to technology companies and startups.

Aparium was founded in 2011 by hospitality executive and entrepreneur Mario Tricoci and luxury hotel veteran Kevin Robinson, according to the company’s website.

The two men developed, owned and operated what was called the Elysian Hotel, a luxury property in Chicago that was renamed the Waldorf Astoria after it was bought by billionaire investor Sam Zell in 2011 for $95 million. In 2015, he sold the Waldorf Astoria for what Chicago media reported as a record $113 million, eclipsing a high that was set when Zell purchased the Elysian.

An Aparium representative could not be reached to comment.

According to the report to the City Council, Aparium plans to begin the renovation in the first quarter of 2018, with an opening expected in the second quarter of 2019.