The approval of the redevelopment project for the 700 block of K Street brings more than just the prospect of a revitalized block of the J-K-L corridor, it also includes financial incentives that supporters say will spur the local economy and bolster revenues for the city.

Originally, developers Bay Miry, D & S Development, and Ali Youssefi, CFY Development, proposed that the city put in $16 million of funding assistance – one half of that amount in the form of a grant, and the other half in repayable loans from a variety of redevelopment agency sources.

Since the initial proposal, however, Miry and Youssefi were able to tap into new funding sources for the project, including a federal program called New Market Tax Credits (NMTC).

With more outside funding, the amount of private investment increased and the level of public investment decreased.

The approved project now includes only $14.7 million in public funds – nearly $2 million less than originally proposed.

“From a financing standpoint, we’re pleased that the developers have made such an effort to increase their equity input,” Councilman Rob Fong said Friday. “It’s a great investment for the city.”

In addition to a decreased level of public funding for the project, the city will profit from the redevelopment project at 40 percent of whatever the cash-flow is.

This translates to a return for the city of approximately $17.4 million on a $14.7 million investment.

“That is unheard of in a private-public partnership project,” Miry said. “It’s a really good thing for the city.”

That’s not all, though, according to Miry.

The financing terms of the project include yet another added incentive to the city.

In the event the development is ever sold to new investors, the city will receive 20 percent of the profit from the sale, over and above full repayment of all loans on the original project.

“Neither of those two aspects (a high return on reduced investment and profit on future sale) were part of the initial proposal,” Miry said.

City Council members gave the green light to the K Street project on Tuesday, saying the project would be “transformative” and “invigorating” for the downtown sector.

“This long awaited project will certainly change the face of K Street,” said Maurice Chaney, communications specialist for the city’s Economic Development Department. “It will generate millions in tax revenue and support 500 permanent jobs once operational.”

“This is a win, win, win situation,” said Councilman Kevin McCarty Friday.

“It’s a win for revitalizing K Street. It’s a win for housing downtown. It’s a win for development and jobs,” McCarty said.

Read more about the 700 block project here.