A new developer, Hempel Cos., is signing on to renovate and manage the shuttered Macy’s building in the heart of downtown St. Paul.

The St. Paul Port Authority’s nonprofit subsidiary, Capital City Properties, owns the five-story building that covers a city block. The nonprofit’s board will vote Tuesday on an operating agreement to partner with Hempel and finish work on the building.

The vote comes after “two and a half long years” of vacancy, following Macy’s departure in 2013, Port Authority President Lee Krueger said. But if the new agreement is approved, changes could start happening quickly, with construction beginning this spring.

The redevelopment is projected to cost $60.6 million, according to the agreement. A construction loan, which Krueger said Hempel would be taking out, accounts for $46.4 million of that.

Hempel’s plan for the building is similar to past developers’ proposals, with a mix of retail, restaurants, a medical office and entertainment space, according to the agreement. Krueger expects that the names of businesses moving into the building will be announced this summer.

The Minnesota Wild has committed to making the rooftop rink planned for the building their permanent training facility, the agreement states. Developers would like to wrap up most of the construction by fall 2017, in time for Wild training camp.

Business owners in the area said they are glad to see a mix of uses move in next door.

“Having a vacancy of that size, or any size, definitely doesn’t help drive people downtown,” said Joe Furth, who owns Eclipse Records across the street from the Macy’s building. He said he hopes the addition of an ice rink and new restaurants will create momentum and attract more customers and stores.

Oppidan cut out

Hempel is one of a number of developers interested in the Macy’s project, but it is the first to get to this stage of negotiations, Port Authority officials said. The company, headquartered in Minneapolis, has handled projects in St. Paul before. It developed the River Park Lofts in downtown and owned the UBS Plaza.

Officials with Hempel could not be reached for comment Friday.

The Port Authority was previously working with Oppidan Investment Co. on the project, but the deal was never completed.

Oppidan officials Joe and Paul Ryan said in a written statement that they are “incredibly disappointed” that the Port Authority began working with Hempel.

“At no point over the last eight months has our interest, enthusiasm or commitment to seeing this project through to its successful completion wavered,” they said. “Unfortunately, although they had made a commitment to Oppidan and although we believed they were honoring that commitment, the Port Authority has begun working with a different developer on the Macy’s site.”

Krueger said the decision came down to timing and Hempel was “just ready to go.”

Modernizing the space

The former Macy’s building will undergo a major overhaul before tenants move in.

Asbestos abatement could start in May, Krueger said. Then there would be at least a year of construction, including work on elevators, parking, electrical systems, heating, plumbing and more.

“There’s so much stuff to be done in this building. There’s very little that’s modern.”

The building, between Cedar and Wabasha streets at the intersection with 6th Street E., opened as a Dayton’s in 1963 and has retained its 1960s exterior — which is primarily windowless above the ground floor.

Brenda Lamb, owner of the nearby Candyland sweet shop, said she has seen a “slow trickle” of businesses, like Macy’s, that have left the area.

“Retail is pretty nonexistent in downtown St. Paul now,” Lamb said. “I miss myself not being able to go over and pick up a few things.”

She hopes the developer and new businesses that move in will add window displays and try to make the building more “aesthetically appealing” to attract customers.

The city’s vision for the property included a transformation to a glassy exterior. But those dreams may be scaled back, Krueger said, as the partners weigh the costs of new windows and other expenses.