Almost three years after demolition of the former Wheatena buildings, construction on the first phase of a four-building, 487-unit rental development has begun.

Linden-based Capodagli Property Company secured a $31-million loan for the first phase of the development, which is expected to be about 172 units.

The Planning Board unanimously approved preliminary and final major site plans in December 2014 for the site on Elizabeth and West Grand avenues. At the time, the first phase was expected to be completed and leased by this year, with the remaining units in the second phase by the first quarter of 2019.

The Brownstones will include four five-story buildings in all, each with about 120 units, including ground-floor parking and is expected to be built in four phases over the course of five years (which would peg total completion for sometime in 2023). Typically, Capodagli developments consist of about 65 percent two-bedroom units, which would amount to about 318 two-bedrooms, leaving about 171 one-bedrooms. There will be about 542 parking spaces.

Meridia Brownstones Urban Renewal, LLC, acquired the roughly 6.7 acres among nine lots for $4.7 million in 2015. The property successfully won tax appeals of almost 11 percent for 2011 through 2014. In all, the lots previously were assessed for $2,253,600, generating a property tax bill of almost $140,000.

City Council approved a 30-year Payment In Lieu Of Taxes (PILOT) for the projectt in August 2014. The PILOT application indicated that the $49.75 million development will be funded 75 percent, or $37.3 million, by a debt-first mortgage loan, and 25 percent equity, approximately $12.4 million.

Capodagli had requested a reduction in development fees due to the increased extraordinary costs associated with demolition, asbestos abatement and environmental remediation. The Redevelopment Agency agreed that any reduction in development fees would be a maximum of 50 percent of the previously agreed upon $1,000 per unit fee.

Capodagli has built three other buildings in Rahway over the years (among other projects in the works in Hackensack, Bound Brook, Green Brook and Linden):

• 88-unit Meridia Grand on East Grand Avenue, which it sold for $19 million in late 2011;
• 108-unit Meridia Water’s Edge at City Hall Plaza, which it sold for $29.3 million in 2016; and,
• 115-unit Meridia Lafayette Village at Main and Monroe streets, which opened last year.