A proposal to raze a central-Helena industrial site and build affordable housing units is back before city commissioners Monday night.

Rocky Mountain Development Council officials will ask commissioners to consider sponsoring an application for $2.07 million in federal housing stabilization grant funds. Montana has been allocated $19.6 million of the money, which can be used to redevelop blighted areas, among other things, and the cash is being distributed by the state Department of Commerce.

RMDC would use the money as part of $6.96 million in financing needed to build the first phase of a project that has been retooled over the past several months. The organization now wants to build 30 units of low-income senior housing, followed in the future by an unspecified number of units for struggling families.

Rocky officials also now plan to have two commercial structures fronting Montana Avenue, though in information provided to the city they noted that phase of the project could be four to six years down the road.

The organization had previously proposed 58 units, with a total cost reaching toward $25 million. Information provided to the city did not include a total cost for the newly proposed project.

The proposed redevelopment of the 2.7-acre parcel adjacent to the Capital City's busiest intersection n the "malfunction junction" of Helena, Montana and Lyndale avenues n has stirred up opposition from some neighboring residents, including members of the Midtowne-Sixth Ward Neighborhood Association, which has been working on a neighborhood plan for several years now.

Opponents say the cost is too high and the location is wrong. They want to see commercial development there.

RMDC believes the site is right for renewal.

"We remain convinced that this central location is well suited to redevelopment as affordable housing and thus we continue to pursue all appropriate funding opportunities," said Gene Leuwer, the organization's director, in a letter to city officials.

Though city staffers often recommend approval or denial for issues that come before commissioners, they did not for this proposal. Community Development Director Sharon Haugen said she and the city manager agreed it was an issue best left for the commissioners to decide.

The meeting is set for 6 p.m. Monday in the third-floor chambers of the City-County Building. The public hearing for the request is the last item on the agenda.

Reporter Larry Kline: 447-4075 or larry.kline@helenair.com