PROVO — The Provo City Council voted unanimously Tuesday night to spend $1.26 million on the purchase of downtown property it hopes to turn into major projects that will help revitalize the area.

The Council authorized a $660,000 loan for the Provo Redevelopment Agency to buy a barbershop and rental car lot at 303 W. and 333 W. 100 North, a block north of the City Center.

The loan comes from a city investment pool of idle or surplus funds from various departments. The pool is called the Capital Resource Fund, which is designed to earn better interest rates for the surplus money and save issuance costs.

"We're saving $50,000 to $60,000 of issuance costs on this deal alone," City Council chairman George Stewart said. "I think this investment is very wise."

City leaders hope to sell the land for a parking garage or a mixed-use development of shops and apartments or condos.

The loan is interest only and will be repaid in five years.

The other purchase, a block to the east at 265-295 W. 100 North, has already been made, with the city paying the first of four installments last year.

The total price for the Food and Care Coalition property is $1.25 million. The city paid $300,000 last year, and the Council agreed to pay $600,000 this year, making both the 2007 and 2008 payments.

The city hopes to pay off the final $350,000 next year, a year early, to put itself in better position for work on the new Utah Valley Convention Center the city and county are considering building on the property, Provo RDA executive director Paul Glauser said.