The planned housing project at East Fourth and Locust streets is back on track, according to developer Jack Hatch, and the latest design includes “live/work lofts” to suit the evolving style of the East Village neighborhood.

A lawsuit filed by Conlin Properties Inc. against the Iowa Finance Authority had forced Hatch’s non-profit Neighborhood Investment Corp. to suspend preparations for construction. The dispute centers on the allocation of tax credits to Central Iowa construction projects, and the legal wrangling continues. However, an application for an injunction was withdrawn. Because of that move, Hatch said he expects construction of an apartment building to begin next spring on the site of the former Dewey Ford automobile dealership. “Something could still derail us, but we hope we’ve anticipated every situation,” he said.

Although the outcome of the suit is in doubt, Iowa Assistant Attorney General Grant Dugdale said Hatch probably doesn’t have to worry about another delay. “I never say never,” he said, “but it’s very unlikely that the suit will affect the tax credits given out this year.”

For some time, Hatch had planned to devote the first floor of the apartment building to commercial or retail outlets. However, “we didn’t have the money for that, so we resigned ourselves to having just apartments,” he said last week. “But we talked to people in the neighborhood and on the City Council who still wanted to pursue a commercial aspect and went back to the live/work concept. We’ll aggressively market those spaces to artists and entrepreneurs who want to live there and also have an office or a studio.”

Hatch said his team has been negotiating with the city of Des Moines to finalize their developer’s agreement. He planned to meet this week with two organizations, East Village Neighborhood and Historic East Village Inc., to review the current design. Then comes the process of securing financing through the U.S. Department of Housing and Urban Development, which could take the rest of the year.

The cost of the apartment project shouldn’t be affected by the delay, according to Hatch. “The effect was mostly psychological,” he said.

The fate of a planned condominium building at the same location remains up in the air. “Nothing has changed; we’re still working with Jack,” said Gerry Neugent, president of Knapp Properties Inc. His company originally expected to construct the condo building as part of the overall project, but has held back to see how financing issues work out. “Around the first of the year we’ll finalize our plans,” Neugent said. He expects the condos to be built eventually, either by Knapp Properties or by another developer.

Conlin Properties’ lawsuit questions the IFA’s decision-making process in awarding tax credits, a process that left Conlin projects with no credits this year. Roxanne Conlin, the company’s attorney, withdrew the application for a temporary injunction before a planned July 9 court hearing could take place, saying she was forced to do so because IFA failed to provide needed documents. “Another hearing date will be scheduled once we have some evidence,” she said last week. “What I need to know is why they made the decisions they made. I don’t have one piece of paper that supports how they made them.”