The city of Denver is nearly ready to help a developer restore and expand the historic hotel property at 101 Broadway.

The old First Avenue Hotel on Broadway could see new life, five years after its last tenants were forced to abandon the historic building.

The future of the building has been up in the air since 2012, when city inspectors ordered everyone out of the building, saying the building was unsafe. Its last major tenants — El Diablo and Sketch Food & Wine — shut their doors in 2013.

Now, the city is nearly ready to help restore and expand the property at 101 Broadway.

New proposals would have the city give a low-interest loan for $2.5 million and another $2.5 million of tax breaks for a redevelopment project to be led by Zocalo Community Development. The plan includes more than 100 below-market apartment units.

This building has a long, slightly weird history.

The 34,000-square-foot hotel dates to 1908, according to city records.

“It’s a beautiful historic building that has sat in disrepair, and vacant for way too long,” said Councilman Jolon Clark, noting that Broadway was an ideal location because of its 24-hour bus service and dedicated bus lanes.

The hotel’s upper residential floors were shut down for unsafe conditions in 1978. The ground floor was restored in the 1980s before falling back into disrepair.

In 2008, Jesse Morreale bought the property and set up restaurants on the ground floor, before city inspectors forced the building to empty out again during a long legal battle between 2012 and 2013.

It was auctioned off in bankruptcy court in 2015 for about $6.6 million, as BusinessDen reported.

“It’s the single most challenging project we’ve ever worked on,” said David Zucker, chief executive of Zocalo. That reflects the challenge of renovating and expanding a historic building, but it’s also simply difficult to fund lower-cost units, he said.

“It is a poetic injustice that projects for the community are tougher to do. It is not fair,” he said. “But that’s the way it is.”

Here’s what they have planned.

“It includes restoration of the four-story Denver historic landmark building — the former First Avenue Hotel — and there’s also construction of a five-story addition immediately to the west,” said Tracy Huggins, director of the Denver Urban Renewal Authority.

Zocalo plans to build 106 “workforce housing units” — a mix of studios and bedrooms with income restrictions. They’ll also have about 10,000 square feet of retail and restaurant space.

The apartments would be 400 square feet on average, according to Zucker, and they’ll be reserved for people making less than 60 percent of the area median income — about $38,000 for a single person.

The units could go for around $900 per month, as Zocalo previously told Denverite.

The city loan for the project would come from the Office of Economic Development. The other $2.5 million would be through a tax-increment financing district to be created on the site– basically, a refund of the project’s taxes over several years.

All that will have to be approved by the Denver City Council in the months ahead, including a public hearing on June 25.

The project’s total cost is about $38 million, according to Zucker. The project wouldn’t be possible without the help of DURA, the mayor’s office and city agencies, he added.

This post was updated with Zucker’s comments.