The Younkers building, sitting empty and losing value by the millions since the department store chain pulled out of downtown Des Moines in 2005, has caught the attention of another developer.

Matt Anderson, city of Des Moines economic development administrator, said he met May 26 with a representative of The Alexander Co., a Madison, Wis., company that has experience in urban renewal and historic renovation projects.

The 111-year-old building at 713 Walnut St. could use some attention from an experienced hand.(Note: Address corrected.)

Michael Alexander, managing partner of a Virginia firm that bought the property for $2.2 million in 2008, said he hopes to form a joint venture with The Alexander Co., which has the experience necessary to put together the complex financing necessary for the estimated $40 million rehab of the property, where Samuel and Herman Younker opened their Des Moines location in 1899.

The Alexander Co. considered buying the property several years ago, but decided at the time that the loan conditions were too stringent and it was concerned about the availability of tax credits, said David Vos, the company’s project development manager.

“We’ve always kind of watched it from the side,” Vos said.

“They know their stuff,” Anderson said of the company. “They have a tremendous track record of taking on jobs just like this.”

Though the Des Moines City Council has not approved any financing packages for the building, its rehabilitation is considered crucial to downtown.

“This will be a catalyst,” Anderson said. “I’m pretty excited that they are here in town.”

City leaders have puzzled over how to bring additional retail business and foot traffic to the downtown core in the wake of new construction that will leave several existing buildings standing nearly empty by the end of this year.

Anderson said financing would include a variety of federal and state tax credits, and other city and state economic development funds.

The financing plan must be in place in the next 30 day in order to meet a construction completion date of June 2012, Vos said.

“It’s a very complicated transaction,” Vos said. “The good news is we’re used to doing this. The bad news is that if any of these pieces fall out, the project doesn’t get done.”

Saks Inc. bought the building for $5.2 million in 2005 and sold it three years later to Michael Alexander’s firm. There is no connection between Michael Alexander and The Alexander Co. other than a possible business relationship focused on the Younkers building.

Michael Alexander said he had hoped to wait five years or so before attempting to find financing for renovation of the building.

However, he has lost interest in putting together tax credit deals, he said, and is focused on buying and selling distressed properties.

In addition, Alexander has let the property taxes lapse on the structure, paying the second installment for 2009 in February 2010. As of May 25, he had not paid the current $53,138 property tax bill.

“I have that sitting right here on my desk,” Alexander said in a telephone interview May 25. “Those will be paid right away.”

Anderson said that when he became aware that Alexander was reluctant to put together financing for the Younkers restoration, he sent an e-mail to The Alexander Co. asking whether it was still interested in working on the property.

Michael Alexander said he plans to enter a joint venture with the company.

Anderson said plans are to create market-rate apartment units.The Younkers Tea Room must be preserved for public use in order to qualify for historic tax credits. In addition, there will be an effort to add retail shops.

“I think we have the right team working on it,” Anderson said.

Anderson noted that empty structures such as the Younkers building create a drag on local government finances.

The building’s assessed value has dropped more than $3 million in the last three years, to nearly $2.2 million for the land and building from nearly $5.4 million in 2007. The current value of the building is placed at $30,000 and the land at $2.17 million.

It also has joined 13 other properties in or near downtown whose delinquent property taxes will be up for auction during the Polk County treasurer’s annual tax sale on June 21.

Those properties owe a combined $329,620 in delinquent taxes, included interest and late fees. Delinquent taxes represent an investment for some individuals and companies, which are paid interest by the county after paying off the tax bill. In order to redeem a property from a tax sale, owners must pay the actual tax bill, interest due the county plus interest paid to the tax buyer.