PAWTUCKET, R.I. - The Barton Street neighborhood was once one of the city’s most notorious red-light districts. But for the last 10 years the Pawtucket Citizens Development Corp. (PCDC) has poured nearly $10 million into revitalization projects in the area. PCDC began work on Callaghan Gardens, its latest development, in 2004.

Months earlier, PCDC had finished a tax credit development with 11 homeownership and 35 rental units nearby, called the Barton Street Apartments. But more homeownership units were needed to help transform the dilapidated area into a cohesive neighborhood.

“The area had so much rental, and the rentals were all so transient that it was very hard to establish a group of residents that felt commitment to the neighborhood,” said Nancy Whit, PCDC’s executive director. “We felt strongly that for this area to become more stable and revitalized, homeowners were key.”

One of the biggest challenges PCDC faced was acquiring eight lots on the land where it wanted to build. It took about 18 months of negotiations with two private owners to acquire the lots, which included a vacant auto body shop, a storage facility, and three run-down buildings with occupied rental units. The rents from the units didn’t support the operating expenses, but PCDC subsidized the operation rather than increasing rents, before ultimately demolishing the buildings.

PCDC also had to get the city to abandon a portion of a street, which gave the development an additional 57,000 square feet of land. In return, PCDC gave the city a new playground area it developed next to Callaghan Gardens with city Community Development Block Grant funds.

The development was sensitive to green building, especially given that the area had one of the highest incidents of child lead poisoning in the state. A $20,650 Local Initiatives Support Corp. grant allowed PCDC to retain a consultant to help the project incorporate green techniques, such as bamboo flooring, low- VOC materials, and energy-efficient appliances.

A concrete-based one-inch insulation used around the shell of the townhomes helped Callaghan Gardens receive a 5-star rating from Energy Star, allowing homeowners to save about 30 percent on energy bills.

The townhomes of Callaghan Gardens include three two-bedroom and 11 three-bedroom units, ranging in price from $145,500 to $163,500. Those prices are evidence of PCDC’s success in the neighborhood. At the Barton Street Apartments, two-family homes sold for only $105,000 in 2004.

Due to market conditions, only three units at Callaghan Gardens had been sold seven months after completion. But PCDC’s efforts have spurred continued improvements to the neighborhood. Prostitution arrests in the neighborhood have declined 70 percent in the last year. A nearby church is undergoing a total renovation, and three nearby rental buildings have been converted to market-rate condos in the last three years.

The project received more than $600,000 in HOME funds from Pawtucket, and another $500,000 in HOME funds from Rhode Island Housing. The development also received a $1.8 million construction loan from Rhode Island Housing at a 3 percent interest rate.

The Rhode Island Housing Resources Commission chipped in $450,000, and the project received $165,000 from a state agency for lead remediation. PCDC also contributed $250,000 in developer’s fees.