TOOELE -- A Salt Lake City-based developer wants to restore the dated and rundown Hotel Tooele to its former glory as part of a large project to revitalize the area.

Kevin Peterson said he's seen pictures of the 95-year-old building when it "was the showplace of the area."

But now the three-story hotel sits vacant on Broadway Avenue in the eastern section of Tooele, or "Newtown Tooele," lined with other unoccupied and neglected structures. Its windows have been broken out or boarded up, and graffiti is scribbled the walls.

"I've been involved in a number of projects like this," he said. "They all start out looking like disasters. You've got to see the potential."

Peterson, through his company Capitol Management LLC, wants to make over the hotel in the first steps of renovating Newtown Tooele. He has been acquiring property for the past two years, with hopes of transforming the area to include affordable housing, retail and office space.

The project, estimated at $7.7 million, will include restoring Hotel Tooele's look from the early 1900s. Retail and office space will occupy the ground floor, while the rest of the floors will be designated for one- and two-bedroom apartments.

The corner grocery store, Hometown Grocery, is also scheduled for restoration. New apartment buildings are planned next to the store and hotel.

Housing created by the project will be priced for individuals or families at 60 percent of the state's median income or below, Peterson said. Over the past year, Utah's median income for a family of four was $58,000, 60 percent of which is $34,800.

Peterson said he hopes to have financing in place by April to begin construction in the summer. He said he will use proceeds from federal low-income-housing tax credits and state historic-preservation tax credits to fund the project.

The City Council has also helped out, recently creating a community development area for the project, allowing the city to use future tax revenue as funding.

The city has agreed to pay for sidewalks, curbs, gutters and street lights. It will also be the passthrough organization for a $4 million bond to help fund the project, said Councilman Scott Wardle.

Broadway Avenue really was the old Main Street, he said. "To have that come back to life is going to be a great benefit to citizens throughout our community."

Tooele, with an estimated population of more than 27,000 people, is 35 miles west of Salt Lake City.

This story appeared in The Daily Herald on page D6.