The city's efforts to redevelop the Rolling Hills area has always been crucial to the important task of spreading revitalization outward from downtown to surrounding neighborhoods.

Government and business leaders have long recognized that an island of redevelopment enveloped by deteriorating or abandoned neighborhoods would be wrong on many grounds. It would greatly hamper the continued success of downtown and send an unthinkable message that those residential and small-commercial areas were forgotten.

So as Rolling Hills has met speed bumps large and small over the years, it has been easy to be fearful that the latest efforts would run aground. McCormack Baron Salazar, the city's development partner, brought ambitious plans and a solid track record to the latest iteration of the project.

But an economic downtown the magnitude of which no one foresaw nearly short-circuited the firm's plans, especially its goal of raising money for the planning process. The city reluctantly but crucially stepped in to bridge that gap.

Now, we're on the brink of another positive step as the new year begins. As The Herald-Sun's Ray Gronberg reported last week, the City Council appeals likely on Monday to grant a conditional option of 10 acres of the site to McCormack Baron Salazar. That in turn will pave the way for the St. Louis company to submit an application for low-income housing tax credits.

If the firm doesn't get the tax credits, or if it can't negotiate an acceptable development agreement with the city, the option would evaporate.

More encouraging news on redevelopment in Rolling Hills and the adjoining Southside neighborhood is the increasing involvement of Self-Help Credit Union in the area. The credit union, brings a strong record and local credibility.

The council on Monday is expected to approve $500,000 in community development money to a subsidiary of Self-Help to buy more property to include in the redevelopment project.

Self-Help already has bought about 85 lots in Southside, and its intent is to work with other low-cost housing groups to develop both rental and for-sale housing units in the area. McCormack Baron Salazar likewise is committed to a mix of rental and owner-occupied housing in the area.

Some affordable-housing advocates have worried that gentrification of the area surrounding downtown may preclude enough of the units in the new developments will be occupied by low-income residents.

Mayor Bill Bell had a bit of realism on that score last week, saying "in this project we aren't going to be able to satisfy everybody."

True enough, but the momentum seems to be restored to the idea that the project will satisfy some critical needs, and that's an optimistic note on which to end 2009.