Though the legal cloud has lifted over plans to build an apartment house for hard-to-treat alcoholics, the delay caused by a long line of lawsuits has jeopardized a chunk of government financing vital to the project.

The state Supreme Court this week declined to consider an appeal aimed at scuttling 1811 Eastlake, a development that would house 75 street alcoholics in a new four-story building next to where Denny Way crosses Interstate 5. Tenants would be allowed to drink in their rooms, which has worried adjacent property owners who believe the apartment would make the mostly commercial district unsafe and undesirable.

The idea behind the project is that removing chronic alcoholics from the street improves their chances to drink more responsibly and reduces the drain they put on public services, such as detoxification, emergency medical, police and courts.

Led by the Benaroya Co., a principal landlord in the area, opponents filed legal challenges with the city's hearings examiner, King County Superior Court, the state Court of Appeals and Supreme Court. None was successful, but construction was put on hold while the cases were pending.

The wait meant the developer of 1811 Eastlake, the nonprofit Downtown Emergency Service Center, had to reapply for federal financing it secured in 2001 but had to return the allocation because construction did not begin within two years of the award. The financing amounts to $5.5 million, or more than half construction costs.

In the reapplication, 1811 Eastlake failed to make the cut — and without the money, the apartment likely won't be built.

Bill Hobson, the center's executive director, said his agency soon will ask the state commission that allocates the federal money to make an exception for 1811 Eastlake. Hobson said officials with the city, county and state — which are all contributing money to the project — will join him in the appeal.

Hobson said the project's failure to re-emerge as a top priority has less to do with its merits than with refocused priorities of the financing program, which allocates money for all sorts of low-income housing projects.

Richard Aramburu, lawyer for the opponents, was not available for comment yesterday.

Hobson said he believes opponents filed lawsuits partly as delay tactics, hoping that one of the project's financial backers would pull out. The lawsuits argued unsuccessfully that 1811 Eastlake was not residential housing but rather substance-abuse treatment, which would require additional permitting.

Stuart Eskenazi: 206-464-2293 or seskenazi@seattletimes.com