When tenants at the Jose de Diego Beekman housing project in the South Bronx first decided six years ago that they wanted to seize ownership and management of their troubled housing project, they had no idea what a long road they were in for–hundreds of meetings, proposals and negotiating sessions with federal housing authorities.

Last week, that all paid off. In what is thought to be the largest tenant takeover of a federal housing project in the country, Beekman’s residents finalized a deal with the federal Department of Housing and Urban Development to take control of their sprawling development’s 38 buildings and 1,200 apartments. Under the plan, the residents’ organization, Tenants United for a Better Living, will join a private management company and an array of powerful nonprofit groups to completely rehabilitate their homes and to provide on-site support services, including free computer and Internet access for each apartment. HUD officials expect the final building transfer to take place in September.

“This is the first of its kind and we’re very proud to be part of it,” said Phil Grossman of Fleet Bank, which is providing a $21 million construction loan for the project. “Allowing the actual residents of Jose de Diego Beekman to control their destiny and to have the actual ownership of their homes is a miraculous feat.”

The change in Beekman’s ownership could not have happened soon enough. The tenants started organizing in the mid-1990s. Fedup with the atrocious and dangerous conditions of their buildings–the project’s dark tunnels and isolated courtyards were the stomping grounds of one of the city’s most notorious drug gangs, the Wild Cowboys–they asked HUD to take over the project from a Boston real estate company called Continental Wingate. The feds obliged, and in late 1996 installed their own management company. While conditions improved, tenants clamored for a role in the new Beekman.

Under the new structure, a mutual housing association made up of tenants will own the buildings and be governed by a board of directors consisting of tenants, representatives from the New York City Housing Partnership, and local church, police, business, and school leaders. Diversified Management, a group of developers and landlords from Harlem with years of experience with city housing programs, will run the buildings day to day. To renovate the project and ensure its long-term financial viability, the ownership team is relying on tax breaks from the city, federal Section 8 subsidies from HUD, and the Fleet Bank loan.

The tenants’ agreement to work with local housing entrepreneurs like those at Diversified Management may have sealed the deal. “This ownership structure is utterly unique,” said Kathy Wylde, president and CEO of the New York City Partnership, who in 1995 advised the tenants to consider that option. Typically, she said, HUD would give the project “to a large for-profit developer from out of town, and the old problems might come back again. Instead, they chose to embrace an opportunity where a solid local team can really work hand-in-glove with the tenants.”