A piece of commercial property near the busiest intersection in town may be turned into the city's next affordable housing project.

At a public meeting Wednesday night, officials from Rocky Mountain Development Council will unveil their plans for an affordable housing development on the site of the Caird Engineering property at Malfunction Junction, where East Lyndale, North Montana and Helena avenues intersect.

Jeff Miller, RMDC's director of community development, said the approximately 2.7-acre property could potentially handle as many as 90 housing units, but that officials are eyeing a plan that will eventually include somewhere between 50 and 60, combined with possibly light commercial or other community space on the North Montana side of the property.

The first phase of the proposal, to be unveiled this week, includes 20 housing units, ranging from one to three bedrooms and earmarked for families earning 50 percent or less of the area's median income.

"This is a prime location if you think about the proximity to schools and the proximity to the (Sixth Ward) neighborhood," Miller said. "It really is the heart of town."

Miller cautioned that a deal with the current owners, Caird Steel Fabrication, has yet to be complete, and may not be done until late this year or early next.

He declined to discuss the terms of the sale itself, but said the total cost of the first phase of the project has a construction budget of around $6.8 million.

Selling tax credits would account for a large portion of the budget, Miller said. Rocky can apply for federal low income housing tax credits that can then be sold to private parties, typically banks of insurance companies, that invest in the project.

Other types of grants will likely be tapped, along with a certain amount of private debt, Miller said. Because rents for the housing units are below market and fixed, the universe of potential funding sources is more limited than it would be for a traditional housing development.

Joe Mueller, broker/owner of ReMax of Helena who has listed the property for several years, didn't offer any additional details on the proposed deal but said the owners of Caird hope to relocate their steel fabrication business.

Mueller had a deal lined up a year ago with an out-of-town developer, "but with the collapse in the financial markets, they had to back out," he said. "This (Rocky proposal) sounds like a good project."

The owners of Caird could not be reached for comment Monday afternoon.

Questions remain about potential environmental problems with the property after more than a century of manufacturing, but Miller said there's EPA Brownfield money available through Lewis and Clark County to help with any necessary testing and cleanup.

Because the city's long-term transportation plans call for a large roundabout at Malfunction Junction that would cut into the Caird property, Miller said development would start on the parcel's east end.

"As we develop the site plan we anticipate not developing the portion the city would need to acquire to handle the roundabout," he said.

Wednesday's meeting will be the first gauge of public sentiment toward the project, and Miller said having support of the neighborhood will be key.

"To make it work, we do need to listen to the community and listen to the neighbors," he said.

He added that officials have had an affordable housing project brewing for close to a year, making family housing a priority as work nears completion on the three-phase Eagles Manor project.

"Based on what our partners (including the Helena Housing Authority, God's Love and Head Start parents) are telling us, quality affordable family housing is continually in short supply," Miller said. "So it seems appropriate that we do a family housing project."

Reporter John Harrington: 447-4080 or john.harrington@helenair.com.

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