NORFOLK, Va. (WVEC) -- The St. Paul’s area in Downtown Norfolk is one step closer to redevelopment, thanks to a public-private partnership to build a mixed-income housing complex.

Developer S.L. Nusbaum bought a property located at St. Paul’s Boulevard and Wood Street from the City of Norfolk for $1.25 million in August earlier this year.

The developer is building “St. Paul’s Apartments,” a 126-unit mixed-income apartment complex, which is in the middle of three public housing neighborhoods that city council is talking about demolishing.

The Cooperation Agreement for St. Paul's Area Redevelopment brought controversy earlier this summer when it suggested to tear down Young Terrace, Calvert Square and Tidewater Gardens and replace it with mixed-income housing.

John Kownack, director of the Norfolk Redevelopment and Housing Authority, clarified the apartments were not part of the original cooperation agreement.

“It’s a private developer who’s borrowing the money, who’s at risk, who’s designing and building the units,” said Kownack.

Kownack added that the housing authority is still somewhat involved, as it awarded 13 project-based vouchers for extremely low-income families to rent at the apartment complex.

“We believe it does meet what we’re trying to achieve, which is, you know, provide new housing opportunities in a quality accountable project for our families, but allow it in a mixed-income setting.”

13 units are reserved for extremely low-income families, 107 units are income restricted and six units will rent at market rate.

Construction is expected to be completed at the beginning of 2019.