This aerial view of the American Locomotive Works project shows its relationship to downtown Providence and Struever Brothers, Eccles & Rouse’s vision for the massive Valley development.

COURTESY OF STRUEVER

PROVIDENCE — Vowing to bring back a section of the city that has been strewn with enormous vacant factories and piles of industrial debris for more than 30 years, a developer is creating a $300-million mixed-use project on 18.5 acres along the Woonasquatucket River, about a mile from downtown.

Called the American Locomotive Co. Works, or ALCO, after a factory that once produced trains there, the development is one of the largest in Providence’s recent history. Using a combination of historic rehabilitation and new construction, ALCO is envisioned as up to 500 condominium and rental units and nearly 2 million square feet of commercial and retail space.

Construction began in 2006. The project is being built in phases over several years by Baltimore-based Struever Brothers, Eccles & Rouse, a development company founded in 1974 that is known mainly for concepts that transform urban areas. Its master plan depicts a bustling campus of thousands of people who will live, work and play in an area that has been mostly vacant for decades.

“It is a huge project,” both in size and scope, said Eric Busch, development director for Struever Brothers, as he walked the site on a recent breezy day.

The Valley neighborhood, site of the ALCO project, is a mix of narrow streets with aging two-  and three-family houses and huge old factories and mills. The Woonasquatucket flows south through the neighborhood to merge with the Moshassuck River to form the Providence River and, eventually, Narragansett Bay. The Smith Hill neighborhood and the city’s historically Italian section, Federal Hill, overlook the Valley, home to about 5,000 residents, according to the most recent census figures.

Although the Valley neighborhood is now one of the poorest in the city, the ALCO site bustled with thousands of workers from the beginning of the 20th century through World War II. The most prominent factories were owned by U.S. Rubber and Rhode Island Locomotive Works, which later helped to form the American Locomotive Co.

At the time, Providence was a leading industrial city, known for products such as textiles, machine tools and jewelry. But one by one, as the industries dried up or moved, the factories closed; U.S. Rubber finally left Rhode Island in the early 1970s. Since then, the ALCO site has been largely moribund; one of its 26 buildings housed some small businesses and artists, who have since moved, with Struever’s assistance, but there were no major employers on the site.

“At night, it was completely dark and abandoned,” Busch said.

Struever Brothers bought the property in 2006 from the state’s Licht family. Phase One, completed early last year, rehabilitated five historical buildings on the east end of the site to create 200,000 square feet of retail and office space. Forty to 50 percent of that space has been leased to nine tenants, including the Rhode Island Economic Development Corporation, and a law firm, Busch said.

The rest is being marketed to companies that need roughly 20,000 square feet, a size that is hard to find in downtown Providence, he said.

The ALCO site went on the National Register of Historic Places in 2005 and Struever then received state and federal historic tax credits for the rehabilitation.

The centerpiece of Phase One is a red brick factory that dates back to 1885 and once housed the Rhode Island Locomotive Works. The company expanded to produce a luxury automobile, the Berliet, in the early 1900s. The cars were tested on a dirt track surrounding the factory, which Struever has restored into a walkway. Phase One also involved about $4 million in environmental cleanup, including the removal of asbestos and a 10,000-gallon oil tank.

Construction is scheduled to begin in the fall for the second phase, on the west side of the site, about 1,500 feet from Phase One. It calls for rehabilitating two more historical buildings, one of which used to house a portion of U.S. Rubber, to create 124 rental apartments with a rooftop garden and 55,000 square feet of commercial space. Working with city and state housing advocates, Struever has agreed to make 20 percent of the units “work-force housing,” priced for buyers whose incomes are from 80 percent to 120 percent of Providence’s median annual household income, which is roughly $64,000.

The Struever master plan outlines six development phases, although that number is subject to change. The later stages call for more housing, a parking garage, more commercial space and infrastructure improvements along the Woonasquatucket River, including the construction of a new bridge.

Providence, which is New England’s second-largest city, after Boston, has experienced a burst of development in the last 20 years, changing the city’s skyline and bringing new residents and workers downtown. This activity has included construction of an $80-million headquarters for GTECH Corp., a lottery equipment and services company ownd by Italy-based Lottomatica; a $100-million addition to the Westin Providence Hotel, which includes a 32-story condominium tower; and an $80-million conversion of an old Masonic temple into the Renaissance Providence Hotel.

The Valley neighborhood, by and large, has been left out because its developable land needed substantial cleanup. That changed after the state and federal governments created historic credits programs that provided financing for developers such as Struever to tackle the West Side’s vacant industrial sites.

“Struever wouldn’t be here without the historic tax credit,” said Thomas E. Deller, Providence’s planning director.

Struever has seven projects under way in Rhode Island, including the $150-million conversion of an old Narragansett Electric power plant into a combined museum and hotel. The developer’s total investment in the state is more than $500 million, according to the company’s Web site.

Before breaking ground on the ALCO project, Struever converted three old mill buildings in the Valley to rental housing, retail and commercial space, and artists’ living and working space. These projects have also retained the historical red brick facades.

The company also plans to develop a 6.5-acre Valley site across the Woonasquatucket from the ALCO site as a mixed-use project. This is also on the National Register of Historic Places. That development, now in the planning stages, calls for reusing the plant of another defunct company, Nicholson File, which once employed 1,200 people making industrial files and rasps.

Not everyone has welcomed Struever’s presence in the Valley. The nonprofit Olneyville Neighborhood Association, which says it represents residents in the Valley as well as the adjacent Olneyville neighborhood, maintains that longtime residents will not be able to afford the housing, nor will they be likely to find jobs on the ALCO site.

“The city is promoting development that doesn’t meet the needs of the people,” said Michael Wojcicki, a spokesman for the group.