The team behind the renovation of the former Grand Piano & Furniture building in downtown Roanoke will get $880,000 from the city to turn the structure into rental units.

The deal, sealed Tuesday by votes from the Roanoke City Council and the Roanoke Redevelopment and Housing Authority, ends months of wrangling over the financing of the project.

Under the agreement, the city would funnel the money through the housing authority, which would pass it on to the two developers who are converting the building at 35 Campbell Ave. S.W. into 58 rental units, 17 of which would be set aside for lower-income tenants.

Construction has been under way for months at the building, where crews tore down a brick facade last summer revealing the building's earlier facade with art-deco motifs from the 1930s.

The renovation will cost developers Scott Graeff and Ed Walker between $9 million and $10 million and should be completed in July, Graeff said.

Although it would be easier and more profitable to turn the structure, also known as the Hancock building, into condominiums, Graeff said he wanted to offer a rental alternatives to all the condominium projects sprouting up downtown. Attracting a diverse group of downtown residents would make it more likely for his future downtown projects to be successful, he said.

"It's a steppingstone," he said, adding that he considered the rental project an investment in the downtown residential market.

Council members in favor of the project have said the investment would be a boon for downtown Roanoke by attracting young people, who are less likely to be able to afford a condominium.

But the deal was almost scuttled when an earlier agreement fell through.

In December the Roanoke Economic Development Authority killed a similar agreement when it deadlocked on a 3-3 vote, even though the city council had given it the go-ahead by a 5-2 vote.

City officials then turned to the housing authority and asked it to serve as the intermediary between the city and the developers. By law, the city council can't give the money to the developers directly.

On Tuesday, the city council voted again to send money to the project through a performance-and-loan agreement with the housing authority, an arrangement in which the city would lend money to the developers and then incrementally forgive the loan.

This time, the vote was 6-1. Councilman Sherman Lea changed his vote, leaving Councilman Brian Wishneff as the proposal's sole opponent.

"A central city like Roanoke has so many problems and so many agencies and cultural groups doing good work and we choose a wealthy developer just so he can do apartments instead of condos?" Wishneff asked.

Lea said the 17 units set aside for lower-income residents motivated him to change his vote and support the project.

"My point is to get the best thing you can get out of it and that was to make sure we have some mixed housing," he said.

The housing authority unanimously approved the agreement a couple of hours after the city council had taken its vote.

Although several authority members said they were uncomfortable about being used as a go-between, they noted that they did not want to appear to overrule the city council.

"There are some people out there who still feel that money should be better spent," said Commissioner Jim Allen.

Commissioner Gail Burruss said she would vote for the agreement "somewhat reluctantly."

Commissioner Anita Powell also said she would vote in favor but delivered a stern warning to the developers.

"I'm going to be watching closely and paying attention to make sure that people are not left out," she said. "I hope that doesn't become a problem down the line."

"My vote is aye," Powell said, before adding: "For right now."

Staff writer Duncan Adams contributed to this report.