WORCESTER - The last phase of creating a "new Kilby Street” was unveiled Tuesday with a ribbon-cutting ceremony for the renovation of a nine-unit apartment building. One of the new residents joined local dignitaries in celebrating the debut of the building at 1 Kilby St. as affordable housing.

J. Stephen Teasdale, executive director of the Main South Community Development Corporation, said 1 Kilby St. marks the completion of rehabilitation efforts on the street.

“To say that this has been a challenging project would be a little bit of an understatement,” Mr. Teasdale said. “We’re done, but I think it’s really a testimony to the development team that worked on this project that it came out so well. It was a really challenging deal.”

Mr. Teasdale said 1 Kilby St. was built around 1897 and originally had a dressmaking shop on the ground floor, along with several apartments.

“Over the last 20 years, it underwent significant decline,” Mr. Teasdale said. “And finally, in 2014 there was a fire that led to its abandonment and the displacement of the tenants that occupied it.”

In June 2015, the Main South CDC purchased the vacant eight-unit property using a $100,000 “Housing For Everybody” grant from TD Bank, Mr. Teasdale said.

“Today we've got an environmentally friendly building that achieved several of our goals,” he said. “It’s an attractive entry to the street. It offers a safe route to school and to the Boys & Girls Club … It completes the transformation of this street. And it provides much-needed affordable housing, with a particular accommodation for veterans who are at risk of homelessness.”

Ms. Teasdale said the building used to be a sad property, both physically and in terms of the substandard housing that it offered its tenants. Not any more.

“Main South has its share of people who are down on their luck and look for any type of cheap accommodation or just somewhere to live, no matter what sort of condition of it is,” Mr. Teasdale said. “1 Kilby St. used to offer that type of accommodation. It was a place where, in the words of Joaquín Sabina, ‘desolation and loneliness shared mattresses.’ Today, that’s changed. 1 Kilby St. now offers opportunity and hope for families and veterans.”

Kelaia Espinoza is one of the new tenants moving in to the building.

Currently, she lives in a one-bedroom apartment with her husband and their two young daughters. She said her new place gives her the opportunity to have a two-bedroom apartment. The Espinoza family moves into 1 Kirby St. on Nov. 1.

“We are excited,” she said. “And the fact that it is a new building and it’s beautiful, it’s very exciting.”

City Manager Edward M. Augustus Jr. said the city’s renaissance is not just happening downtown. It’s happening in places like the Kilby Street neighborhood, he said.

“Look at this neighborhood,” Mr. Augustus said. “Twenty years ago, this neighborhood did not look like this. Each day, each block, each building, it gets better and it gets stronger with new neighbors moving in, new people becoming part of this community, who care about it, who take care of it. It strengthens this neighborhood and it strengthens this overall city.”

In his remarks, Mr. Augustus also praised the Main South CDC for it efforts.

“We’re fortunate to have an organization like them that have the experience, the know-how, the persistence to get projects like this done,” Mr. Augustus said. “They’re not for the faint of heart. If it was easy, somebody else would have done it. Main South CDC knows how to take on the tough ones, stick with it and make sure it happens.”

The project was completed at a cost of $1.9 million. Funders included the state Department of Housing and Community Development, TD Bank, Federal Home Loan Bank of Boston and Berkshire Bank.

Three of the units will provide rental-assisted permanent housing for extremely low-income veterans who are homeless or at risk of homelessness. The two-bedroom ground-floor unit will be handicapped accessible.

The Main South CDC worked with U.S Rep. James McGovern’s office and city officials to secure Federal Highway Authority funds that helped complete streetscape and sidewalk renovations along the length of Kilby and Gardner streets.

In addition, the city has donated the lot across the street at 2 Kilby St. for recreational space for residents of 1 Kilby St., completing the transformation of a street once blighted and plagued by crime, according to a pamphlet provided by the Main South CDC.