NORFOLK, Va. (WAVY) — Norfolk city leaders broke ground on the St. Paul’s transformation project on Tuesday.

The project is the start of redevelopment for the Tidewater Gardens, Young Terrace, and Calvert Square public housing neighborhoods.

Phase one of the project includes construction on the Tidewater Gardens area after 618 units were demolished following years of discussion and controversy.

Mayor Kenny Alexander says the idea for the project had been in place for years but he finally decided to take the initiative to get federal officials on board when he took office.

“We were able to get this project going and working with the residents. Putting them first has been our principal,” he said.

A $30 million grant from the Department of Housing and Urban Development will help pay for this part of the $300 million project.

Historically, redlining, segregation and systemic racism pushed Black people to the St. Paul’s area, which is divided off from downtown Norfolk. This created generations of families in poverty.

Alexander says the project is meant to deconcentrate poverty by building mixed-income communities.

“This new development will have over 700 mixed-use, mixed-income units. One-third will be replacement public housing. Another third will be market value. Another third will be public housing voucher. It’s going to be a nice 21st-century community with high amenities and luxuries and strengthen communities by deconcentrating poverty. That’s the goal and I think we’ll accomplish that,” he said.

But some worry the new homes will be too expensive for residents to return to, or they won’t be able to find space at all.

Residents sued the city in 2020, calling the project racist and essentially moving poor Black people to other poor areas.

But the city settled with several changes to the plans and a judge dismissed residents lawsuit to halt the project. Residents have a “right to return” policy that will make sure “good standing” residents can come back. Right now, more than half of the residents plan to move back when the new homes are built.

In December, NRHA said more than 67% of residents had left, 214 out of the 618 units have already been leveled.

Their settlement agreement included more housing units reserved for public housing residents than planned.

Norfolk Redevelopment and Housing Association Executive Director Ron Jackson said the residential facility that will be the first built in Tidewater Gardens will be for 182 families who have already been relocated from the community.

“This part is really important because it sets the stage for what comes after,” he said.

Jackson says they haven’t really run into many issues when it comes to finding housing for those being relocated but there is a lot of educating going on.

“Most of the people we’ve worked with eventually found housing. The folks with vouchers, we have to work with families and landlords. There’s still that stigma attached to housing choice vouchers. There’s education but also with the residents moving out of the public housing setting into private markets,” he said. “It’s education both ways but it’s beneficial in the long run.”

Jackson says some of those who have relocated have chosen to move to other cities across the country.

During Tuesday’s groundbreaking, the People Choice Initiatives program also shared information claiming that employment rates have risen among residents in the community.

NRHA closed on Monday on the two plots where the new residential facility will be built. Construction will begin between four to six weeks.

Jackson says it should take about 14 months.