• By GARY PERILLOUX
• Advocate business writer
• Published: Nov 18, 2009 - Page: 1B

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The boarded-up windows behind a padlocked fence crowned with razor wire show the former Capital City South Apartments for what they have become: one of the worst eyesores in Baton Rouge’s Midcity district.

On Tuesday, the Louisiana Housing Finance Agency announced plans to change all that.

LHFA officials said a federal housing program could sweep $12 million into a revitalized development at the 150 S. 17th St. site, where 68 empty units stand a stone’s throw from a colony of homeless people camped under the adjacent North Boulevard overpass.

As recently as July, three fires erupted in one weekend at the closed apartments. By late September, LHFA foreclosed on the owner, Caleb Community Development Corp., a Baker nonprofit that began housing initiatives in 1996.

Now, LHFA envisions a new template. A mix of low- and moderate-income housing — something the state-chartered agency was created to finance in 1980 — could anchor new plans for the two-acre site, Jeff DeGraff, the agency’s public information director, said.

Caleb failed to make payment on a federal housing note for which LHFA was the mortgage holder, DeGraff said. And the owner didn’t maintain the complex properly.

LHFA and others are aiming for more than mere housing.

The complex has been on Samuel Sanders’ radar for a long time. The Mid-City Redevelopment Alliance director expects to be on his soapbox at a Thursday meeting where LHFA will hear feedback.

“We … really look forward to the day it comes down and can be redeveloped,” Sanders said. “That’s my reason for wanting to go and have the conversation and challenge them to make sure we explore all the opportunities that could be on the table before they commit to any particular plan.”

Sanders’ vision includes a partnership to develop private property surrounding the complex, one that could use tax credits and other incentives to attract private developers. A mix of for-sale properties with LHFA-financed apartments tall enough to enjoy a view of downtown and the river could create something special along the $12 million North Boulevard overpass that opened in 2006, he said.

“This is one of those opportunities where you could create (a project) that would make a lot of sense on the periphery of downturn but also preserve the components of the neighborhood that is there today,” Sanders said.

The East Baton Rouge Redevelopment Authority is doing similar work. The authority, created to restore blighted neighborhoods in the parish, recently learned it will have access to $60 million in New Markets Tax Credits administered by the U.S. Department of the Treasury.

The LHFA’s funding comes through a Neighborhood Stabilization Program of the federal Department of Housing and Urban Development, or HUD.