While the redevelopment of Steel City Terrace will greatly impact residents of the public housing complex, it also will change the management scheme at Mercer County Housing Authority.

New public housing and other rental units are planned for construction on land the authority owns but the authority won't own the buildings or be responsible for day-to-day management.

Pennrose Management Co., Kingston, Pa., will lease the apartments from their owner, a partnership made up of the developer, Falbo-Pennrose Joint Venture Inc., and an investor who will buy tax credits of which the authority will be a member.

Pennrose Management, a subsidiary of Pennrose Properties Inc., Philadelphia, one of the members of Falbo-Pennrose Joint Venture, will handle admissions and maintenance and collect rents, said Mark Dambly, vice president of Pennrose Properties.

The federal government is moving toward private management of public housing, and allows private managers to institute a more rigorous screening process for residents than authorities can, Dambly said.

The authority, which has decided not to be a member of the owning partnership, will be known as "asset managers," said Executive Director L. DeWitt Boosel. It will monitor terms of the agreement reached with Falbo-Pennrose Joint Venture Inc., he said.

Pennrose also will be subject to oversight by the U.S. Department of Housing and Urban Development and the tax credit investor, Boosel said.

"They're really under the gun," Boosel said.

Richard Gower, president of Pennrose Management, said his company will have to provide the same reports to the authority that the authority must fill out for HUD.

The agreement between the authority and the partnership, which has not been signed, will set three-year assessment periods, after which the authority could assume management of the apartments if it feels Pennrose is not doing the job, Boosel said.

The authority will have help in reaching and assessing the myriad of agreements and financial transactions with Falbo-Pennrose, the federal government and others from the Housing Authority of the City of Pittsburgh.

While the Pittsburgh authority is "pleased" with the housing built by Falbo-Pennrose in so-called HOPE VI projects similar to what Mercer County is undertaking, the process of building them and making the switch to private management hasn't been easy, said Macy Kisilinsky, assistant director of special projects and planning of the Pittsburgh authority.

"We've been around the block," he said. "We've been beaten before with a number of problems."

Kisilinsky said his role will be to help the Mercer County authority understand what they are getting into, and teach staffers how to do certain tasks so that they eventually will be able to do them on their own.

Authority board members asked Pennrose how the project is progressing compared to other HOPE VI projects it has worked on. Considering that the federal HOPE VI grant that kicked off the project was awarded in August 2000, to be planning to start construction in June or July is "very aggressive," Dambly said.

He noted that Pennrose was just chosen as developer of a HOPE VI project in Chattanooga. The grant was awarded in 1998, he said.

The scope of the Farrell project is already changing before the first shovel of dirt has been moved.

Developers had announced that 135 units of housing -- public housing apartments, apartments rented at closer to market value and homes for sale -- would be built, but Falbo said Monday at least another 10 rental units likely would be built.

By Wednesday, he was saying, "We'll probably end up with 160 units when we're finished."

jpinchot@sharon-herald.com