It involves providing more than a million dollars in HUD loan money to Joe Morrier's JEM development.
The federal housing money needs to be assigned to a project by the end of May and only for qualifying projects.
Joe Morrier is the same man who owns the empty Yakima Mall downtown.
"We can't get caught up on the past and the people involved in the project, we wound never move forward," said Yakima Economic Development Manager Sean Hawkins. "So, we're focusing right on the project and the jobs created with it to move it forward."
Yakima says the hotel would bring dozens of jobs. City Council will vote tonight whether to give an initial $60,000 to hire a consultant.
It would guide the renovation and monitor the federal money. The hotel's owner would be responsible for repaying the loan.