The Des Moines City Council will be asked Monday to endorse a letter of support for the transfer of $3 million in federal funds to Blackbird Investments LLC for the renovation of the Wilkins/Younkers building project at Seventh and Locust streets downtown.

Blackbird has signed a purchase agreement to buy the entire Younkers block, stretching from Seventh to Eighth streets, according to a report to the City Council.

The Alexander Co. of Madison, Wis., had been awarded the federal funds as part of the financing package for the nearly $19 million renovation of the west side of the property into retail and residential spaces. The project was set back by a massive fire in March 2014 that destroyed the east side of the building. The company, which is noted for historic rehabilitation, pressed ahead with plans to renovate the west side of the property into 60 residential units and sought a variety of federal, state and local funds to assist with the project.

Blackbird had said earlier this week that it hired Neumann Monson Architects to provide due diligence on the project and the Weitz Co. to seek construction bids.

The report to the City Council said costs could rise to $20 million.

“The Wilkins Building physical renovation proposed by Blackbird Investments LLC is the same as that proposed by the Alexander Company,” according to the report. “Any change would endanger the historic tax credits allocated to the project.  Of the 60 housing units, 29 will be market rate and 31 will be affordable to households at 80 percent of median income.”

The City Council has approved a $1.5 million economic development agreement with Alexander. The project also has qualified for state and federal historic tax credits, state economic development tax credits and the $3 million federal Community Development Block Grant – Disaster Recovery funds that are designated for areas affected by the floods of 2008.