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The Lakeview public housing project, criticized by tenants as wasteful and praised by City Hall as a boon to the Lower West Side, has received a go-ahead from the state.

Sharon West, executive director of the Buffalo Municipal Housing Authority, said the state's approval of a financing package would allow groundbreaking for the project this spring.

"The project lives," West said Thursday.

The project, part of the federal government's HOPE VI public housing program, is designed to reduce the concentration of poverty on the city's Lower West Side and transform a neighborhood in decline.

Two state agencies -- the Housing Finance Agency and the Housing Trust Fund -- are providing the private developer, Israel Roizman of Philadelphia, with a three-pronged aid package: federal tax credits, tax-exempt bonds and a low-interest loan.

While many saw the state's financing as the last hurdle, there may be other obstacles in Lakeview's path.

Common Council President James W. Pitts said major changes in the project's scope will require the Council to take a second look at the deal.

The housing authority and Roizman want to tear down the entire Lakeview complex, located north of downtown and adjacent to the Niagara Thruway, and replace it with new housing. The original plan called for about 183 of Lakeview's 666 units to remain. "That's going to upset everybody," Pitts said. "It looks more and more like one of those massive urban-renewal projects from the 1950s."

Pitts said several questions have been raised, from whether a total demolition is wise to the political connections between Roizman and the Clinton administration. Roizman has been a major contributor to the Democratic National Committee.

Tenants also have fought the project, in part because Lakeview already has undergone $16 million in improvements in the past decade.

The state's approval follows its rejection last year of an earlier financing plan for Lakeview. That left Roizman without 30 percent of his funding.

At the time, state housing officials said they turned down the project because Roizman wanted $7 million in federal tax credits. They argued that Lakeview would have used up a large percentage of the federal housing assistance earmarked for the region and curtailed dozens of other smaller projects.

Lakeview, one of 83 HOPE VI projects across the country, also includes funding for education, job training, family and health problems, and neighborhood revitalization.

The first phase is expected to be 138 units of senior-citizen housing near Hudson Street.

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