On Columbo Street in careworn Garfield Heights on Friday, a woman leaned out of a third-floor window and urged the prompt destruction of the community in which she lives.

"It's better that they tear Garfield Heights down as soon as possible," she said. "You're not safe. You have to watch your back."

The crime and general dilapidation of the 48-year-old public housing community -- part of the reason the federal Department of Housing and Urban Development declared Garfield Heights a failed community a decade ago -- have driven years of efforts to tear it down and rebuild.

Redevelopment is set to hit some critical milestones this week when the Pittsburgh Housing Authority and developer KBK Enterprises are expected to announce a prime contractor for the $27.8 million first phase. The financial package is set to close by month's end. Construction could start next month.

That could mark a crucial turning point in Garfield's history.

"The [neighborhood's] stigma, in the past, has been the public housing," said Keith B. Key, of KBK, who grew up on Columbo but operates out of Columbus, Ohio. He's out to "change the image of Garfield" with a new Heights that combines low-income and middle-income residents in houses, duplexes and four-unit buildings, with complimentary computers in every one.

Getting there has already involved a bumpy fiscal ride.

When the reconstruction effort was announced in April 2006, it was billed as a $60 million project involving 265 homes that would meld seamlessly into the rest of the neighborhood. The local public investment in the 90-unit first phase, to include 20 market-rate apartments, was put at $10 million.

Not included then: the cost of preparing the site and building roads and sewers. Not anticipated: a market downturn that reduced the value of federal tax credits backing the project.

Now the local public investment in the first phase is expected to be $17.4 million, and the authority may make another $3 million loan to KBK.

A package of Pittsburgh Housing Authority and Pittsburgh Water and Sewer Authority money for the roads and sewers on the first phase didn't come together easily.

Housing Authority Executive Director A. Fulton Meachem Jr. said Friday that he knew a year ago that he had yet to identify $4.1 million needed for roads and sewers. He was holding off on committing his agency's money while he sought state funds.

Former Housing Authority board Chairman Pat Ford, through his lawyer Lawrence Fisher, said Friday that he wasn't told of the funding need until January. By that time, the funding gap threatened to throw off the timing of the tax credit deal, delaying the project for a year or killing it, according to several sources involved in the deal.

Mr. Ford was "saying, 'Let's investigate why we have this shortfall in the first place,' " Mr. Fisher said, even as he tried to find a way to bridge the gap.

Mr. Meachem disputed that, presenting an August letter to state Sen. Jim Ferlo, that was copied to Mr. Ford, asking the state to consider supplying some of an estimated $4 million for Garfield Heights infrastructure.

Mr. Meachem said there was never anything worrisome about the funding situation. The gap was filled when Mr. Ford got a $2 million commitment from the Water Authority and the Housing Authority put in $2.1 million.

The two parted ways shortly after the funding issue emerged. In March, Mr. Meachem's administration asked HUD to review whether Mr. Ford's board seat conflicted with his position as executive director of the Urban Redevelopment Authority. HUD said the roles did conflict, forcing Mr. Ford off of the board.

Mr. Ford is now on paid leave from the URA, pending a State Ethics Commission review of into his friendship with a Lamar Advertising executive. Mr. Fisher said the commission is expected to dismiss the matter or launch a full investigation by July 18.

In Garfield Heights, there's general optimism about the new units, tempered by concern about cost cuts.

Mr. Meachem said the project is going to be high quality.

"With the dollars and the market we're in right now, we're ecstatic with what we think we're going to be able to build," he said. The authority is "thinking about" funding for the second and third phases of the development, he said, but doesn't have budgets yet.

Mr. Key said the price tag of the entire, three-phase development will be higher than the $60 million he estimated in 2006. Still, he promised "a storybook project" that breaks the concentration of poverty and a layout that will "naturally open the property up to be integrated into the larger community of Garfield."

Some in the community, though, are wondering whether the final product will truly mesh with the rest of Garfield, or remain isolated, allowing it to revert to its troubled form. An older plan involved abandoning some land near the highest part of Garfield Heights and instead building lower down, right into the street grid that runs north of Penn Avenue. That option seems to be off the table.

"We're trying to persuade the Housing Authority that it would be a much more prudent idea to build much of phase two and all of phase three off of that hill," said Rick Swartz, executive director of the Bloomfield-Garfield Corp. Otherwise, "you're going to find that you're very much isolating people again."