A proposal to build a seven-story apartment project in an area east of Des Moines’ East Village district is prompting city officials to consider creating incentives to help spur redevelopment of the area.

On Thursday, the Des Moines Plan and Zoning Commission will decide whether to amend the city’s comprehensive land use plan to promote residential and commercial development in a 22-acre area roughly bound by Interstate Highway 235, East Ninth Street, Des Moines Street and Pennsylvania Avenue.

The commission will also determine whether to designate the area, called Upper East Village, as an urban renewal district. Doing so would allow the city to use tax increment financing, tax abatement, forgivable loans or grants and other tools to spur redevelopment in the area.

Heart of America Group is proposing to build a 186-unit multifamily project at East Sixth and Des Moines streets. The development would include studio and one- to three-bedroom units, a dog park, underground parking with 145 spaces, and street-level commercial.

The project is estimated to cost about $42.5 million, although that could increase, said Michael Whalen, CEO and president of Heart of America Group, which has offices in the East Village.

A similar multifamily project is underway by Heart of America at 317 E. Sixth St. Project costs jumped 17.8% from early estimates to when work on the project began, Whalen said.

“It’s just a radically disruptive environment right now,” he said. “I think that’s going to be the challenge for continued development within the downtown – if costs to build are 20%, 25%, 30% higher than they were four years ago, how do you get rents that are competitive?”

Whalen said he believes downtown can support an additional 10,000 residents. More residents will attract more restaurants and other commercial businesses, he said.

“If you have people that live [downtown], then the restaurants will come and there will be more retail,” Whalen said. “There’s room downtown for a whole lot more people that want to live within a walkable area.”

Construction of the proposed multifamily project could begin either in late 2023 or early 2024, he said.

Before that happens, a variety of approvals are needed from the city, including a March 6 public hearing by the council on establishing the Urban Renewal area.