MIDVALE — Rising from the ashes of a historic smelter is a federally subsidized housing project that city leaders hope will be an example for property management citywide.

The $26 million Florentine Villas project is being funded by a hodgepodge of sources, including the Utah Housing Corp., Wells Fargo, Zions Bank and Prudential Real Estate. About $5 million of the total cost will be funded by the sale of tax credits, and another $1.35 million will come from an interest-free, federal stimulus-package loan, according to Wasatch Advantage Group financial officer Jeff Nielson.

The 214-unit, nine-building project will be great for young married people and professionals just starting out in their careers, Midvale Mayor JoAnn Seghini , a longtime advocate for the poor.

Rent for the units will be limited and based on the area median income. Residents will have to qualify based on household wages, but they will be paying all of their own rent.

In fact, the bonds and private financing used for Florentine Villas will all be paid with profits made on the property, Nielsen said.

That gives Wasatch Property Management an impetus to keep the project in good condition.

"If the property deteriorates, we won't make rents," Nielson said.

Government leaders also feel responsibility for keeping the project from becoming a slum.

"The council and residents are concerned that they don't turn into eyesores," said Midvale city manager Kane Loader. "It will be up to government to make sure that doesn't happen."

Midvale has commissioned a study about the disproportionate cost to taxpayers of rental properties. It hopes to have Wasatch Properties on board as one of its first "good landlords," Loader said.

For now, the city is about half homeowners and half renters.

From the outside, Florentine Villlas will be similar to the market-rate San Moritz apartments next door, Nielson said. The completed San Moritz units have served California-based developer Wasatch Advantage Group as a showcase for projects around the valley with their wide-open floor plans and garages, plus amenities that include a free gym, pool and office.

Florentine Villas will also have a pool, clubhouse and a playground. Inside, it will feature one-tone paint and laminate countertops.

Both properties will have easy pedestrian access to a Utah Transit Authority light-rail line under construction. A new WinCo grocery store is also being built nearby on the former smelter site.

"It takes a lot of components to build a project like this," said Utah Housing Corp. President Grant Whitaker. "Affordable housing is so important to our generations to come. It's like education. We're never going to stop needing it."

e-mail: rpalmer@desnews.com