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Ground will be broken next month for three new houses on the site of the old Union Avenue reservoir.

The new single-family, split-level homes will complete a redevelopment project that started in 2008, says Jim Haughey, deputy director of McKeesport Housing Corp.

Progress was stalled temporarily by the lingering recession and the nationwide collapse in the housing market, he says. "We were finally fortunate enough to find a bank that was able to finance this," Haughey says.

The project is being funded in part by the Federal Home Loan Bank and financed by Warren, Pa., based Northwest Savings Bank.

Not affiliated with the McKeesport Housing Authority (which administers the city's public housing), MHC is a non-profit corporation that arranges low-cost financing and other assistance for renovations of old homes and construction of new homes.

Eight lots were carved out of the old reservoir site near Centennial Elementary School, but only seven are being used. General contractor on the project is Wayne Homes of Uniontown, Ohio.

When the three new houses are complete, Haughey says, MHC will have been involved in construction of a total of 10 homes in the neighborhood.

All of the houses have been sold, he says, and MHC is now "actively pursuing" new projects in the city.

In addition to MHC and the bank, other partners in the Union Avenue project include the McKeesport Neighborhood Initiative, the county's Department of Economic Development, the city's Redevelopment Authority, and the U.S. Department of Housing and Urban Development.

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Meanwhile, the old Vienna Baking Company plant in the Highland Grove neighborhood is quickly disappearing.

Once the home of "Tastemaster" bread, cakes and other products, the 19,000-square-foot plant on Bowman Avenue employed 150 people in the early 1970s and supplied both supermarkets and restaurants, including some of the early McDonald's.

But in 1975, one of Vienna's owners, Alvin Klein, was convicted of insurance fraud in connection with a fire that was started at another bakery --- owned by a Vienna subsidiary --- in Louisville, Ky. One year later, Vienna was purchased by Schwebel's of Youngstown, Ohio. The McKeesport plant closed shortly thereafter.

The building was later used as an Allegheny County public works storage facility. According to Allegheny County tax records, the building was purchased in 1998 for $150,000 by Florida attorney Gust Sarris.

Four years later, court documents indicate, Sarris defaulted on a $350,000 mortgage with Citizens Bank, which then repossessed the building. It has remained vacant ever since.

Valued now at only $51,000, the building is being demolished by the bank at its own expense, city officials say.

The demolition leaves three blocks available for redevelopment --- possibly even for new homes, Mayor Jim Brewster says --- but the land will remain greenspace for now.

The former Highland Grove school nearby is also scheduled for demolition, Brewster says. Thousands of dollars in delinquent taxes are owed on the building, according to Allegheny County court records.

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