Virginia-based New Market Investors LLC has closed on the former downtown Younkers building, but the deal is far from being finalized.

Michael Alexander, founder and managing director of the development company, said a variety of government subsidies and other financing will be needed for the estimated $30 million deal go through. But he said giving up is not an option.

“What is in the works is to coalesce a mutual agreeable development strategy that the market will take and the locality will support,” Alexander said. “Everybody’s smart, we have great people, and we will be successful.”

Alexander said his company purchased the building at 713 Walnut St. from Saks Inc. for $2.2 million, slightly less than the asking price of $2.45 million. It will take six to nine months to assemble financing for the project, with construction expected to begin in fall 2009.

Typically the seller of a big building offers a long-term purchasing agreement while the interested developer assembles financing, Alexander said, but Saks lowered the price of the building so that it would sell quickly.

“Of course I’m very concerned, but not sufficient to lose out on the opportunity,” he said.

Alexander will seek historic, low-income and enterprise zone tax credits and is hoping the new federal administration will implement some changes that will make reselling of those credits more enticing to investors. Because financial institutions are reluctant to get involved in community redevelopment projects, New Market Investors also will use a Federal Housing Administration loan to finance the project.

“We have a local market that I believe relative to many other local markets is doing a lot better,” Alexander said. “I have a lot of confidence in the city of Des Moines and Polk County’s economy, and based on my meetings with the leadership of the city and the county, I have a lot of confidence that they will do what they can to get the Younkers building preserved and developed.”

Plans call for the historic preservation and conversion of the 288,000-square-foot space into mixed-use development. It will include parking in the basement, unspecified retail and commercial spaces on the first and second floors and in half of the basement, and 135 apartment units on the third through seventh floors. The sixth-floor Younkers Tea Room, restaurant and bakery will be preserved for an undetermined use.

New Market Investors is working with HLKB Architecture and Hansen Construction on the project and will hire a commercial consultant and broker.

Alexander is known for taking on projects like this, including his largest, a $110 million redevelopment of an apartment building in Richmond, Va.

“There’s a reason why nobody else bought the Younkers building,” Alexander said, “and the reason is it just takes somebody from a firm like mine that appreciates the various programs that are out there that will create capital to make an uneconomic community development (project) financially feasible.”