King Park Area Development Corp. is teaming with an Indianapolis developer on an $8.7 million residential project to improve a blighted parcel along the Monon Trail on the city’s near-north side.

The proposed redevelopment with Milhaus Development LLC would include three apartment buildings along the west side of the trail between East 20th and 21st streets. The three-story buildings together would house 84 units—or 28 each—on 2.1 acres.

The city’s Metropolitan Development Commission is set to consider the proposal during its next meeting at 1 p.m. Wednesday.

“Obviously, the Monon Trail is right there, and there’s other development [in the area] going on,” Milhaus Principal David Leazenby said. “That was really the main drivers for it.”

King Park Area Development will be the owner of the Monon project and plans to finance it through federal tax credits that are set to be awarded by the Indiana Community & Housing Development Authority in the spring. The tax credits designate that a majority of the units must be affordable housing.

If all goes well, construction should begin next summer and be completed in about 15 months, Leazenby said.

Metropolitan Development’s King Park Neighborhood Plan, adopted in 2001, designated the property as “major rehabilitation.” The parcel is vacant except for one dilapidated building on the south end of the site and has become overgrown and neglected through the years.

About 10,000 square feet of outdoor public space will be incorporated into the project, according to the plans.

Site plans call for the front of the buildings to face the trail, with 102 parking spaces positioned behind the buildings.

To limit access from the Monon Trail to the apartment buildings, a “soft” landscaping barrier will be constructed to establish a boundary and to provide additional security for residents, the plans said.

The area near the Monon on the city’s near-north side is just one of five nationally that’s been designated as a Smart Growth Renewal District through a partnership of the Environmental Protection Agency, Department of Housing and Department of Transportation.

A few blocks east on 22nd Street, a $4.5 million, 62-unit project called National Apartments on the Monon is the latest phase of the Martindale on the Monon redevelopment project.

The apartment development is part of a 46-acre expanse of brownfield properties DC Development Group plans to transform into the National Design District, named for the former headquarters of the National Motor Vehicle Co.

National Apartments opened in July and could be fully occupied by November, DC Development Principal Mike Higbee said. Monthly rental rates run from $259 to $700.

“I don’t think the National Apartments would have ever been built where it is without the Monon corridor,” he said.

The housing downturn has breathed new life into the apartment industry, prompting developers to launch all sorts of projects.

Yet, certain markets can only support so many developments, said George Tikijian, a principal of Indianapolis apartment brokerage Tikijian Associates.

“What happens is you get a strong market and everybody gravitates to it,” he said. “We are in the early stages of potentially oversupplying the [Indianapolis-area] market two years from now.”

Milhaus is also working on the redevelopment of the former Bank One Ops Center downtown, for which groundbreaking is scheduled next summer. Tad Miller, founder of Milhaus, is being sued over the project by former partners Kosene & Kosene Development.