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Whiskey, wagers and women all could be found in Erickson’s Saloon.

With a 684-foot bar, card rooms and a brothel, the brick building at Northwest Second Avenue and West Burnside Street was something of an institution when Portland was still a rough-and-tumble logging town. In the flood of 1894, patrons literally paddled in boats to reach the watering hole.

“People were so desperate to get there that they set up a floating bar,” said Sarah Stevenson, executive director of Innovative Housing Inc., a Portland affordable housing developer. “There’s a lot of legend and lore around the Erickson Saloon.”

Today, the building is vacant; however, with a trifecta of public investment, Innovative Housing is hoping to turn it into workforce housing and ignite neighborhood revitalization.

The nonprofit is planning to transform the Erickson building and the adjacent Fritz building into a 62-unit apartment complex. The project will be similar to one that IHI completed in September: For the Modern Rich apartments, a 107-year-old hotel was converted into 34 workforce studios.

The residential portion of that building leased up before construction was even halfway completed, and IHI sees a pent-up need for more housing in the neighborhood.

“There has been a lot of investment going on by businesses and schools, and so the neighborhood is really kind of popping, and people want to be here,” Stevenson said. “They want to be near where they work and go to school, and there hasn’t been any market-rate housing anywhere in the neighborhood.”

Since 2000, approximately $100 million has been invested in Old Town Chinatown to serve institutions like the University of Oregon, the Oregon College of Oriental Medicine and Mercy Corps. Only the Modern Rich and the modest Everett Micro-Lofts have provided market-rate housing, Stevenson said.

The bulk of the Erickson-Fritz’s 62 units will serve individuals earning 50 to 60 percent of the area’s median income – approximately $24,000 to $29,000 a year. Ten units won’t have any income restrictions, and two units will be reserved for very low-income tenants.

Presently, Old Town is active during work hours and late at night. Gary Hartill, president and creative director of ORANGEWALLstudios, which is partnering with LRS Architects on the project, said housing is needed to fill the gaps.

“Once you get people living in the neighborhood, other services follow,” Hartill said. “You get restaurants and coffee shops and amenities that bring more life to the street.”

Old Town Chinatown has many vacant buildings that could play that role, but code requirements present challenges. The Erickson and Fritz buildings will require full seismic upgrades, which Stevenson said would never pencil without public subsidies.

The Portland Housing Bureau last week identified the Erickson-Fritz project as one of three that will be able to draw from a pot of $14 million for affordable housing efforts. Stevenson said the nonprofit also is applying for historic tax credits, as well as a 9 percent federal low-income housing tax credit that the organization will sell to raise equity. IHI is awaiting approval on the latter two funding sources.

As with the Modern Rich, the developer will address seismic issues at the Erickson and Fritz buildings by dropping concrete light wells through their centers. The idea introduces structural support, as well as an opportunity for natural light to reach interior units and courtyards.

IHI is hoping to have all the financial puzzle pieces in place by the end of this year, and then start construction in 2014. Silco Commercial Construction and O’Neill/Walsh Community Builders are partnering to tackle general contractor duties. IHI currently is leasing the property from the Bill Naito Co., and must purchase the buildings by January 2014.

Until then, Stevenson said her organization is looking to partner with the Architectural Heritage Center to host historic tours, so people can witness the building before and after the project. Hartill said that walking through the old saloon is memorable.

“Back in its more sordid history, it was actually … Portland’s biggest brothel, which is kind of creepy because you go upstairs and you just see these tiny rooms – halls and halls and halls of rooms,” Hartill said. “I think we’re excited to bring it into more of a positive use.”