This afternoon, in a parking lot clouded with rain (and Molly Moon's ice cream), Mayor Mike McGinn, city council members, and community stakeholders announced that the city and Capitol Hill Housing (CHH) have reached an agreement to develop the Seattle Police Department parking lot near the corner of 12th Avenue and Pine Street into a low-income housing complex with street-level retail, two theaters, arts space, and secure underground parking for SPD.

City council member Nick Licata was on hand to generically praise the project, saying it "can help the neighborhood be something better," while council member Sally Clark said that the new development symbolized the "vitality and health of the neighborhood." Michael Wells, executive director of the Capitol Hill Chamber of Commerce, declared Capitol Hill an "urban wonderland" in a moment of poetic fancy.

The underutilized SPD lot covers 29,000 square feet of prime real estate on Capitol Hill's bustling 12th Avenue corridor. Neighborhood activists have long lobbied the city for a change, but until recently, the city was reluctant to develop the site due to the police department's need for secure parking for police cruisers. Funding has also been the primary sticking points in the development process. The city wouldn't sell the lot without providing replacement parking for the police, which necessitates excavation (an extremely expensive process). Thus, the lot has remained undeveloped for years as Capitol Hill grew up around it.

But funding for the project isn't yet secured.

CHH says it expects to raise $38 million through a combination of fund raising and grant and levy applications. CHH will also apply to the city's Office of Economic Development and the relevant state and federal agencies for loans. McGinn was quick to emphasize that the city won't contribute any money from the general fund to the project.

Additional funding will come from private loans and a $3 million capital campaign, the first CHH has staged in its history. The CHH had already received $500,000 from an unnamed "northwest foundation."

Capitol Hill Community Council chair Norma Jean Straw said that the project "speaks to the values that inspire us," though she voiced some reservations about CHH's ambitious time line.

The development project is slated to include 80-100 low income housing units priced at around $450/month, among the proposed commercial and artistic uses. CHH hopes to have all the details and funding in place by this time next year, when CHH plans on buying the lot and negotiate an agreement with the city for the parking space. If all goes well, the development would open in 2014.

But clearly, there's a long road full of potential pitfalls ahead in seeing it executed. Straw encouraged Capitol Hill residents to attend Community Council meetings and continue to apply pressure to the relevant groups to ensure that the project happened. Council member Clark also alluded to the fraught history of the program, saying that community members had spent "literally years" working on the project.