The Des Moines City Council will vote today on whether to apply for flood recovery money to help finance a $40 million renovation of the former Younkers building.

In all, the council will be asked to approve applications for nearly $4 million in Community Development Block Grant-Disaster Recovery funds under a program administered by the Iowa Department of Economic Development and approved by the U.S. Department of Housing and Urban Development.

The Alexander Co. of Madison, Wis., has taken the role of the lead developer of the Younkers building at 713 Walnut St. Project coordinator David Vos said the $3 million his company is requesting is key to securing private financing for the project, which will include residential, retail and commercial uses.

Vos said he was not familiar with the disaster recovery program, which is intended to provide funds for redevelopment in counties affected by floods and tornadoes.

In addition, the council is being asked to approve $979,200 for the development of 16 rental units on city-owned property at 22nd Street and Forest Avenue. Hubbell Realty Co. will develop the project and Anawim Housing will own and manage the units.

The Younkers building has been vacant since 2005, when the department store chain pulled out of downtown Des Moines.

Redevelopment will be financed through the sale of a combination of tax credits as well as private funds, Vos said.

The tax-exempt bonds that can be issued under the disaster recovery program provide an important form of gap financing and also offer an incentive to private lenders during a time when banks and other lenders are cool to large commercial projects.

Christopher Sackett, an attorney with the BrownWinick law firm, said the disaster funding is available to most commercial development projects, providing they are located in a county, such as Polk, that has been formally declared a disaster area.

The funds “should be a credit enhancement” for projects, Sackett said. BrownWinick has conducted seminars pointing out the availability of the funds for commercial projects.

The Alexander Co. hopes to start work on the Younkers rehabilitation early next year, Vos said, with a completion date of June 2012.