Austin Port Authority officials say Hy-Vee has worked with Oak Park Mall tenants to move forward on a $3.2 million deal to acquire and demolish the Austin mall to make way for a new Hy-Vee grocery store.

The port authority met in a closed meeting with the Austin City Council Wednesday afternoon to discuss whether the city should become part of the deal once more.

“Hy-Vee, Younkers and the other tenants out there have continued to talk about how to resurrect this deal,” said Craig Byram, the port authority’s attorney.

As a result, the city of Austin and the port authority will negotiate to resurrect a development deal that would have the city buy the Oak Park Mall property for $3.2 million through a Hormel Foundation grant. The city would lead a demolition project to make way for a new Hy-Vee grocery store.

“The port authority and city are fully in favor of playing the role they were expected to play before,” Byram said.

If all goes well, Hy-Vee and the city could announce a new purchase agreement within weeks.

The city entered into a purchase agreement with Oak Park Ltd. Partnership — the company formed by Chicago-based Martin Graff of M H Graff & Associates Inc. and Martin Goldman of M J Goldman & Co. Ltd. — last October to redevelop the mall site. Under the previous plan, the city would lead a $3 million demolition project necessary for a 60,000- to 90,000-square-foot grocery store.

Yet ongoing negotiations proved difficult. The city not only had to work with the Oak Park Mall owners, but attorneys from Younkers, Shopko and Cinemagic 7 to get a demolition project off the ground so the property could be handed over to Hy-Vee. In February, the city was forced to drop its purchase agreement after the 90-day agreement period expired.

Attorneys with The Bon-Ton Stores, the parent company of Younkers, approved and sent out a final draft of an agreement in April for the city to allow the project to move forward. That agreement included a $250,000 incentive for Younkers to remodel, as well as 18 months of free rent. But the company changed its draft a week later after their attorneys drew up an additional 22 stipulations.

That deadlock effectively killed the deal, according to city officials. A Bon-Ton spokesperson said the company had mostly agreed to the deal’s financial terms but wanted additional stipulations to protect its property, such as agreements on common space and maintenance concerns.

The city couldn’t work out an agreement in time, and the purchase agreement was dropped.

Despite that, negotiations continued privately between Hy-Vee and the other companies, which have progressed far enough to bring the city back into the development deal, pending a few minor changes the city hopes to negotiate into their agreement.

Byram declined to identify which changes the city hopes to pursue as part of ongoing negotiations.

City officials appear pleased with the deal moving forward.

“We have been really aware of the community’s thoughts on this,” Byram said. “Social media, comments on the newspaper, comments on the street that this is something we need to get done.”