The one-time Portland strip club will be demolished for affordable housing project by Hacienda CDC.

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The wrecking ball looms for the Sugar Shack — a shuttered Northeast Portland strip club that advocates say was a persistent magnet for prostitution and money laundering.

And soon to be in its place? About 140 units of affordable housing.

"From this door down, it was all smut," said Paul Anderson, a local resident who came out to watch the demolition begin on Monday, Dec. 10. "We're glad to see that something's going to be done with it now."

Wedged between Northeast Killingsworth Street, Cully Boulevard and Highway 30, the red-light parlor attracted plenty of sirens and squad cars from 1998 until it closed for good in 2014. Its 75-year-old owner, George Lawrence Owen, was convicted of using ATMs to promote prostitution at his eight remaining strip joints last year.

An alliance of community groups purchased the Sugar Shack plot for $2.3 million in 2015, with hopes of transforming the one-story site into a community center.

But the building's quirks — including red shag carpet, black-and-white tile walls, and numerous cell-like rooms that lock from the outside — made renovation less desirable. Hacienda Community Development Corporation, whose headquarters is located across the street, is now the sole owner and is pursuing the rebuild.

"This place was a place of despair," Hacienda CDC CEO Ernesto Fonseca told a crowd of roughly 100 supporters. "We are reclaiming our future."

Renderings by Salazar Architect for the $47-million mixed-use project show a complex of four- and five-story buildings with the overhanging roofs, punched-out windows and multi-colored facades that have become trademarks of the contemporary construction style.

The 141 units will range from studios to three bedroom apartments, and more than 5,000 square feet of the development will be reserved for a meeting hall, public plaza, playground — and food carts. Solar panels, a grey-water reclamation system and electric vehicle charging hub are also planned.

Prosper Portland chipped in $250,000 in government money to kickstart the purchase. The new complex, dubbed Las Adelitas after a famous figure who inspired female fighters during the Mexican Revolution, will be financed with a 50-50 split of public and private funds.

Demolition is expected to take two weeks, and builders hope to finish by the end of 2019.

Portland Mayor Ted Wheeler praised Las Adelitas as a valuable addition to the 700 affordable housing units completed or being constructed in 2018 and 1,300 in the pipeline for 2019.

"Residents and families," he said, "our are most critical infrastructure."

"We can't wait to tear this thing down!" added State Rep. Alissa Keny-Guyer.

For Anderson, the project at 6815 N.E. Killingsworth prompts fears that his nearby mobile home park will become a more attractive target for developers. The nine-year resident lives with his wife, cats, dogs and chickens in an "urban farm" style residence, but his 35-foot travel trailer can't travel anymore.

"We're concerned about the zoning laws," he said. "They're going to get rid of all these trailer parks."