Developer Bart Blatstein is taking another crack at turning the former Inquirer Building into a hotel, with a nearly $40 million development plan.

In an application that surfaced this week for $5 million in state money toward the project, Blatstein's Tower Investments proposes transforming the North Broad Street building - for decades the home of The Inquirer and the Philadelphia Daily News - into a 125-room boutique hotel with a restaurant and meeting space.

The hotel, projected to cost $36.4 million to develop, would try to draw visitors northward from the nearby Convention Center to a part of Center City that has lagged more rapidly revitalizing areas, according to Blatstein's application for a grant from the state Redevelopment Assistance Capital Program.

"This project could be the keystone to spur one of the most important redevelopment opportunities for the city and state at the present time," the developers wrote in the document, obtained by The Inquirer.

A project schedule included in the application sets the completion of its design phase this month, with construction beginning in August 2016.

The stretch along Broad Street near the site has seen only a smattering of redevelopment, such as the ongoing conversion of the Thaddeus Stevens School into residential lofts, and the planned transformation of the derelict Divine Lorraine Hotel into apartments.

The area, despite the Hahnemann University Hospital complex and the Convention Center, suffers from a lack of round-the-clock street activity, said Paul Levy, president and CEO of the Center City District.

"Anything that adds people, life, restaurants would be extremely good for North Broad Street," he said.

The proposal would salvage some of the work Blatstein had done toward developing his proposed Provence Entertainment Complex, a casino with 3,300 slot machines and 150 table games that he had intended for the 1925 tower.

That plan began unraveling in November, when the Pennsylvania Gaming Control Board awarded the city's remaining casino license to a development team building a resort in the stadium district at the southern end of the city.

When dropping an appeal to the gaming board's decision, Blatstein hinted that he might sell the Broad Street property, saying he had encountered "significant interest" from potential buyers.

Numerous telephone calls to Blatstein - seeking details of his latest plans for the property, which he bought in October 2011 for $22.7 million - were not returned.

Blatstein's application for the state grant, targeted for development projects with the potential to jump-start economic development and employment, would have been received before a February deadline, said Jeffrey Sheridan, a spokesman for Gov. Wolf. The state's decision on the grant request, he said, is not expected before July.