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The Hillsdale Terrace public housing complex, built in 1968 in Southwest Portland, was plagued with problems from the start.

Its 60 affordable apartments sat on a depressed, bowl-shaped piece of land that collected substantial water. The buildings were constructed on top of pilings rather than concrete foundations, and the concrete masonry units sucked up pools of moisture into the walls.

Mold became a huge problem and helped make the facility the most expensive maintenance burden for the Housing Authority of Portland (now Home Forward).

But general contractor last week poured the first foundation for Stephens Creek Crossing 鈥� a $52.8 million project featuring better construction and connections for the community.

Hillsdale Terrace’s layout 鈥� from a bird’s-eye view, the buildings formed an 鈥淴鈥� and an 鈥淥鈥� 鈥� did little to foster connectivity between residents and the greater community. In addition, three properties separated Hillsdale Terrace from activity on Southwest Capitol Highway.

鈥淎 lot of times what can happen is larger affordable housing projects can have an invisible boundary drawn around them,鈥� said Bill Lanning of , which designed Stephens Creek Crossing. 鈥淭here’s isolation that can occur there 鈥� people living in the apartments don’t feel like they have a lot of connection to the neighborhood around them.鈥�

Ultimately, Hillsdale Terrace was demolished. Mike Andrews, director of development and community revitalization for Home Forward, said the agency helped find new residences for the 48 families that were living there.

To prepare for Stephens Creek Crossing 鈥� named for Thomas Fulton Stephens, an early Portland settler 鈥� and address the site’s water issue, a significant amount of cut, fill and grading was required. Some of the previous CMU buildings were recycled as fill material. Eventually, a network of pedestrian pathways, bio-swales and play areas will weave through the 20 housing buildings and two community buildings that R&H/Colas is constructing.

One of the latter ones, the Opportunity Center, will be 11,110 square feet. It will house career services as well as community kitchens where residents can learn about cooking and nutrition. Home Forward hopes the center will become a resource for residents who participate in a community garden planned at the southwest corner of the Stephens Creek Crossing site.

鈥淲e’ve done community gardens in the past,鈥� Andrews said. 鈥淭hey provide a lot of benefits to residents in the way of fresh, healthy food, but they also provide a rallying point for people to come together. But we also learned that people (want to know what they can) do with this fresh food. We grow all this great stuff and look at it and think, 鈥榃hat do I do with it?’ 鈥�

The bigger question for awhile was whether Home Forward would be able to secure money for Stephens Creek Crossing 鈥� especially after its first application for federal funding was denied because of the site’s isolation.

But Home Forward worked out a couple of strategic partnerships that tipped the scales in its favor and in May 2011 landed $18.5 million in HOPE VI money.

The first partnership was with Habitat for Humanity, which will build seven homes for low-income homebuyers on nearby land. Steve Messinetti, president and CEO of Habitat’s Portland/Metro East chapter, said his organization for years has looked to build in the Southwest neighborhood; however, properties were not affordable.

鈥淎nytime we’re able to purchase large properties for 10 to 30 homes, they are further into the east side 鈥� even further out than 82nd Avenue,鈥� Messinetti said. 鈥淗istorically, we have done a lot in inner Northeast Portland, but that’s becoming even harder now. So, to have a project in a really thriving community that is continuing to get better, to give opportunities for low-income families to buy a home 鈥� it’s a great benefit to those families.鈥�

Stephens Creek Crossing will serve families making up to 60 percent of the average income 鈥� $43,800 for a family of four.

Home Forward also partnered with Neighborhood House, a community service organization that will provide Head Start and early childhood programs at an approximately 7,000-square-foot building along Southwest Capitol Highway. The site, purchased by Home Forward, is the one that previously isolated Hillsdale Terrace.

In addition, the project benefited from its qualification for a state 9 percent low-income tax credit that Home Forward sold to equity investors for approximately $17.26 million.

The project is scheduled for completion in fall 2013. Andrews acknowledged that it has been a long process, but added that the land was too valuable to abandon.

鈥淲e thought really hard about whether we would redevelop the site due to its challenges,鈥� he said. 鈥淏ut we also knew that it was important to fill affordable rental housing in that wonderful neighborhood. It would have been very difficult for us to find a place to replace that many affordable rental homes in that strong of a neighborhood (anywhere else).鈥�