Nearly three weeks after saying he didn't think he could provide $18 million in state aid for a proposed redevelopment of the Fifth and Forbes corridor Downtown, Gov. Ed Rendell is changing his tune.

During a visit to Pittsburgh yesterday, Mr. Rendell said he was trying to come up with the state money requested by Washington County developer Millcraft Industries Inc. for its proposed $71 million Fifth and Forbes face-lift.

"That project overall may be the most important project for Downtown Pittsburgh and it's important that it go," the governor said.

While visiting East Liberty June 5, Mr. Rendell said he wasn't sure the state could provide the full $18 million Millcraft wanted for its projects, including the $21 million Marketplace Square, the conversion of the former G.C. Murphy store into apartments, condos, shops and parking.

He clarified that yesterday by saying he did not think he could get $18 million in state capital budget money. But he added there were other sources of money he was considering, along with potential tax breaks and tax credits that could help push the total to $18 million.

"There are other ways, infrastructure money, things like that, that we're going to try to plug in and reach up to that total," he said.

In addition to conversion of the Murphy's store, Millcraft is proposing a $50 million project on Forbes Avenue known as Forbes Village that would include 150 to 200 apartments and condos in an 18-story high-rise and 20,000 square feet of retail.

Lucas Piatt, Millcraft vice president of real estate, said the $18 million would give the developer what it needs to complete the Marketplace Square and Forbes Village pieces.

"I just think he understands this is a very important project," Mr. Piatt said of the governor's latest comments. "He said from day one that he was going to do everything in his power to help the project along."

Millcraft is planning to use much of the state assistance for infrastructure-related improvements -- facades, sidewalks and water and sewer lines.

"It's not a check to Millcraft. It's a check to the city really, to reinvest in the city," Mr. Piatt said.

The state subsidy also is expected to make it easier for Millcraft to provide more moderately priced housing in addition to luxury condos. Mr. Piatt said he doesn't want a "gated community" but a "neighborhood that's for everyone" Downtown.

Millcraft was selected by Mayor Bob O'Connor last month to redevelop 20 city-owned properties in the corridor. It is now negotiating an agreement with the city Urban Redevelopment Authority to get exclusive control over the parcels for at least a year. It also is negotiating sales prices.

In addition to the Murphy's conversion and Forbes Village, Millcraft has talked conceptually about adding more apartments, more retail and entertainment, and student suites in subsequent phases, perhaps in conjunction with other building owners.

It also is spending $59 million to convert the former Lazarus-Macy's department store into condos, office space, and retail uses. The Fifth-Forbes projects, with the conceptual phases, could push Millcraft's total investment to $269 million.

"Their investment ... is in the hundreds of millions of dollars so our state investment will leverage a tremendous private investment," Mr. Rendell said.

The governor previously gave Millcraft $3.75 million toward redevelopment of the Lazarus-Macy's building. Overall, he has committed nearly $34 million in state funding toward efforts to transform the blighted corridor.

PNC Financial Services Group received $30 million from Mr. Rendell for its $170 million office, condo and hotel tower on Fifth Avenue. Construction is expected to start this summer.