Raleigh, N.C. — The economic downturn has delayed plans to convert an area near downtown into a mix of old and new homes.

The Blount Street Commons project will eventually include nearly 500 new homes amid 25 historic Victorian homes in a six-block area bounded by Peace and Lane streets. Some of the century-old residences were jacked up off their foundations and moved to new locations in the development.

Project developer LNR Southeast Investments Inc. has delayed closing on its purchase of the final two phases of the four-phase project from the state Department of Administration. The state bought up much of the property decades ago, turning many of the homes into government offices.

In exchange for the delay, the state will retain ownership of the Hawkins Hartness House, which previously served as office space for the lieutenant governor and is considered among the most well-maintained houses in the neighborhood, which is listed in the National Register of Historic Places.

The state also will be allowed to use parking areas on the land and to continue to use some of the existing buildings as office space. Officials said the amended agreement could save the state between $541,641 and $2.3 million in rental costs.

Crews broke ground last summer on the first phase of the 21-acre Blount Street Commons, and a spokeswoman for the project said some of the row houses and carriage houses will soon be ready for occupancy.