WORCESTER - The city has reached an agreement with the Architectural Heritage Foundation for the sale and redevelopment of the Worcester Memorial Auditorium.

Under the agreement, the Boston-based historic preservation group will purchase the historic city-owned building for $450,000 and projects investing a total of $94 million in redeveloping it, according to City Manager Edward M. Augustus Jr.

He said the plan calls for the rehabilitation and restoration of the auditorium into an innovative digital technology, arts and education center.

It will also provide a forum for state-of-the-art commercial entertainment and an incubator for business entrepreneurs involved in the 21st-century digital media industry, the manager said.

In implementing its redevelopment plan, Mr. Augustus said AHF will recognize the cultural, institutional and commercial users in the surrounding area and the historic nature of the auditorium.

"The conveyance of the property will contain all necessary conditions and restrictions to preserve the exterior building facades, lobby, Memorial Hall, the Kimball organ and the interior murals," Mr. Augustus wrote in a report that goes before the City Council Tuesday night.

The manager emphasized that a conveyance of the property will not take place in the near future.

Instead, he said the agreement with AHF lays out a path to a closing in two years, with certain benchmarks that must be achieved within that time frame and are necessary to make the project happen.

As part of his report, Mr. Augustus is asking the City Council to authorize the disposition of the auditorium to AHF, or its nominee.

But before any vote, the manager is also asking that it be referred to the council's Economic Development Committee so a joint meeting can be held with the Worcester Memorial Auditorium board of trustees. At that joint meeting, AHF will publicly discuss its plan in more detail.

Worcester Memorial Auditorium was built in 1933 as a monument to veterans of World War I. It consists of 110,668 square feet of building area on 2.42 acres at Lincoln Square, off the north end of Main Street.

The building is listed on the National Register of Historic Places as part of an Institutional District. It has three distinct sections: main foyer/Memorial Hall, main auditorium and Little Theatre.

Built into the side of a hill overlooking Lincoln Square, the Classical Revival building long ago outlived its usefulness as the entertainment and sports venue it once was. It has been vacant since 1999, and the city has been searching for a reuse of the building since then, but with no success.

In 2010, the care, custody and control of the auditorium was transferred to the city manager for disposition purposes.

AHF was brought on by Mr. Augustus in February 2017 to conduct an in-depth feasibility study for the redevelopment of the auditorium.

In return for its exclusive rights to the auditorium, AHF agreed to spend a minimum of $250,000 on its study and final development plan. The agreement also allows AHF to extend that period of exclusivity, by mutual agreement of both parties, for two six-month periods. It must pay the city $25,000 for each extension.The money paid to the city for the extensions is being used to defray the cost of maintaining the building. The group has since exercised two extensions.

After determining that it is feasible to redevelop the auditorium, Mr. Augustus said AHF submitted a final feasibility study and redevelopment plan, and presented an offer to purchase the building in accordance with the plan.

Michael E. Traynor, the city's chief development officer, said the $450,000 sale price ($6 per square foot) was derived by comparing the price per square foot disposition prices for two other historic buildings in the Lincoln Square area - the former Worcester County Courthouse and the former Lincoln Square Boys Club building. He said the per square foot amount for the auditorium is in the middle for the three facilities.

Mr. Traynor said agreement calls for:

• A closing date on our about June 15, 2021.

• The main auditorium will seat between 1,500 and 2,000 people on the floor and balcony, accounting for the stage, technology and other media demands in that space.

• The Little Theatre will be renovated into a 300-seat IMAX-style theater, which could also be used for smaller-scale e-sports events, other university and medical interactive digital sessions, and programs hosted by adjacent institutions such as the Worcester Art Museum.

• The restored historic lobby will become the building's entry space, including a ticketing function.

Mr. Traynor said the north and south wings will serve as mini-concourses, with informal gathering, food, beverage, product displays and merchandise, offices and practice gaming consoles.

• A single kitchen will service both a "high-quality" dining area, to be situated in the War Memorial Hall, as well as smaller concessions situated throughout the auditorium complex.

As an incubator for the digital economy, Mr. Traynor said the auditorium will accommodate a wide variety of spaces dedicated to media workrooms, medial multipurpose rooms, production space, video rooms, green rooms, lounges and offices.

"Some of these may be co-working spaces for entrepreneurs, digital-maker spaces with access to high tech video and media equipment, small start-up business spaces, and university-dedicated learning laboratories," Mr. Traynor wrote. "The auditorium basement will be designed and designated for these uses.

Mr. Traynor said the city and AHF will work cooperative to achieve the following project benchmarks:

• Execution of the Land Disposition Agreement on or about June 30.

• Certification of completion of Tier II funding, delivered to the city on or about Oct. 15.

• Completion of schematic design delivered to the city on or about Jan. 15, 2020.

• Historic tax credit commitments for the auditorium delivered to the city on or about April 15, 2020

• Certificate of Tier III funding - Sept. 15, 2020.

• Submission of development partner for city approval - Dec. 15, 2020.

• Submission of operator for approval by city - Feb. 15, 2021.

"AHF shall use reasonable efforts to achieve the project benchmarks by the dates set forth," Mr. Traynor said. "However, the city agrees that AHF shall have the right to extend the dates for a period of up to 60 days, upon notice to the city not less than 15 days prior to the designated date."