Charles Bolden was a young man the first time the government tore down his house, a shack in an overcrowded alley in the shadow of the U.S. Capitol. In the name of urban renewal, Bolden's neighborhood was leveled and replaced with a sprawling complex for poor people known as Sursum Corda.

Four decades later, the government wants to tear down Bolden's home again. But this time, with property values soaring, Bolden and his neighbors want more than just a new place to live -- they want to make money.

So this week, they voted to accept a private company's offer to redevelop Sursum Corda in an unusual, $25 million deal that guarantees each of 169 poor families a new home, $50,000 and a share of the profits from hundreds of additional units to be built for more affluent people.

Skeptics said the agreement permits the developer, KSI Services Inc., to grab a large parcel in a rapidly gentrifying area of the nation's capital for a fraction of its true value. But others said it provides a fair price for the troubled property, as well as real hope for economic advancement among the senior citizens and single mothers who live there.

"The majority of us don't want to depend on the government. We want to be self-sufficient," Bolden, 68, said Monday night after residents voted 126 to 1 to approve the deal. "So I'm very happy. Very, very, very happy. Put all those verys in there, too. This is going to be great."

At a time when affordable housing is disappearing citywide, the fate of Sursum Corda is being watched closely by local officials and housing advocates. The deal also could affect the District's first attempt to build a "New Community," part of an ambitious initiative by Mayor Anthony A. Williams (D) to preserve low-income housing by razing concentrated blocks of poverty and building mixed-income neighborhoods instead.

Sursum Corda also attracts attention for its storied history and extraordinarily valuable location. Conceived in 1966 as a home for people displaced by urban renewal, the nearly six-acre development lies five blocks north of Union Station, within walking distance of the newly opened New York Avenue Metro stop, the new city convention center and rehabbed rowhouses selling for upward of a half-million dollars.

Like many subsidized properties, Sursum Corda has struggled financially, racking up debts of more than $8 million. This year, it was threatened with foreclosure by the U.S. Department of Housing and Urban Development because of chronic health and safety violations.

Unlike most subsidized properties, Sursum Corda is owned by its residents, giving them the ability to chart their fate.

Instead of succumbing to foreclosure and almost certain purchase by the District government, Sursum's board of directors, led by longtime resident Beverly Estes, sought a private partner to help preserve their ownership stake in the land, which the city estimates to be worth $12 million under zoning restrictions.

KSI, one of the region's largest residential developers, ultimately stepped forward. Under a deal signed by the board in June and ratified by residents Monday, KSI offered a package of benefits that included a check for $482,000 to bring the mortgage current; $2.3 million to make repairs and pay other bills; $8 million to cover debts; $5 million to maintain the property over the next few years; and nearly $10 million in payments to residents at a rate of $50,000 per household.

Last week, HUD conducted an inspection, which Richard I. Knapp, senior vice president of KSI, said he expects the complex to pass. Once the threat of foreclosure is lifted, KSI plans to ask HUD to approve sale of the property to a new entity comprised of KSI and current Sursum Corda residents.

Under the agreement, that partnership would seek zoning changes to build a new, mixed-income community of about 500 apartments, condominiums and townhouses -- more than double the current 199 units. About one-third of the homes would be offered at market-rate prices, Knapp said, and a third would be affordable to moderate-income buyers. An additional 170 units would be set aside for low-income families, such as those living at Sursum Corda, some of whom have no income and pay as little as $25 a month.

Current residents would have the right to purchase a low-income unit, using the $50,000 as a down payment. Knapp said KSI will seek HUD Section 8 homeownership vouchers to help them make future mortgage payments.

In addition, Sursum residents would get 15 percent of the net profits from the new development, or 30 percent if profits exceed $89 million.

Knapp called the profit-sharing arrangement "generous" and a "fairly tried-and-true system of collaborating with residents." But local housing attorneys said profit-sharing is a relatively new element in development deals with very low-income people.

"Just in the last year, there's been a couple such deals," said Elizabeth Figueroa, an attorney for tenant groups. "Investors who want these properties are dealing with savvier tenants. There's also much more incentive on the part of investors to pursue these opportunities because there's so much more money involved."

Of course, the profits are not guaranteed to materialize, Figueroa said. With that in mind -- and with some developers arguing that Sursum Corda is worth as much as $50 million -- board member Shiv Newaldass said he is taking advantage of a portion of the agreement that gives residents 45 days to find a better deal.

"According to initial feedback I'm getting, if people had known this was up for bidding, we would have gotten a lot more interest," Newaldass said.

Knapp said that KSI and its partners "stand by the deal."

"I think the residents will quickly find that in order to really pull off this project, you need an enormous amount of capital," he said. "And that everything KSI has done has been more than fair."

At the Sursum Corda complex in the District, residents agreed to a company's $25 million deal that preserves their ownership stake.