Tiny pink flags appeared recently in the ground to mark the spot where the first townhouses will be built in a bulldozed neighborhood in Mount Holly that was declared blighted more than a decade ago.

Some Mount Holly Gardens residents had sued, saying the town's plan to redevelop the area was discriminatory because their rowhouses were being demolished and replaced with market-rate units they could not afford. Their case went through state and federal courts, and was settled one year ago.

Under the 111-page settlement, seven homeowners agreed to move and take a buyout, while 20 others were promised new townhouses, referred to as "replacement homes," in the Gardens. The first four replacement units were to be completed this year and the rest within five years.

So far, the landscape where the new homes are planned is bare.

"We're putting in footings on Wednesday, weather permitting," Joshua Brown, Mount Holly's community development director, said Monday, referring to concrete supports in the ground. "Next week the foundation will be built."

Angel Vera, an auto technician who will get one of the first replacement homes, said he does not expect construction to begin in earnest until the spring, with occupancy in the summer at the earliest. "The township has been dragging their feet on this - but I would rather have them do it right than rush it through. . . . I'm not concerned, because they have started the process," he said, noting sewer pipes were installed.

Vera, who has lived in the Gardens for 23 years, remains in one of the few rowhouses that are still standing.

Nancy Lopez, a former school aide who lives nearby, said she just wants to see some progress. "Last year they said we would probably be in this year, by this summer. That's when I saw the plows, and they dug up the dirt. But then it all stopped. I don't know what happened," she said.

Mayor Rich DiFolco and Township Administrator Eric Berry did not return several calls for comment.

Brown said he did not know what caused the delay but said that "it was a matter of getting everything to the planning board and through the proper channels." The settlement calls for the township to have the first four townhouses built by the end of this year, he said. Fernmoor Homes, a Jackson Township builder, will be "vigorously working towards that" goal, he said.

The next 10 replacement units should be built by next summer, he said.

"Obviously we would have liked it to move along faster, but it is progressing," Brown said.

Under the agreement, the township was required to pay for the first four townhouses. The developer, TRF Development Partners, a Philadelphia nonprofit that redevelops troubled neighborhoods, would assume the cost of the other 16. A total of 44 units are planned for the site off Rancocas Road.

Sean Closkey, the president of the company, said the 16 units are expected to be constructed in the spring. "It looks like nothing is happening, but a lot has actually occurred. The site has been pretty much acquired by the township; we've been to the zoning and planning board and got approval for the subdivision, and the building designs are completed," he said.

Closkey also said TRF has received a conditional commitment from the New Jersey Mortgage Finance Agency for about $1 million in construction financing and is in negotiations to obtain matching private funding.

Meanwhile, several rows of townhouses and apartments have been completed adjacent to the Gardens as part of redevelopment that ultimately is expected to have a total of 300 townhouses, 200 apartments, and a small shopping center.

A dozen years ago, township officials announced plans to demolish the 325-unit Gardens to eliminate blight and crime, and redevelop the area.

But after dilapidated rowhouses owned by absentee landlords were demolished, longtime homeowners who had kept up their properties argued that they were being unfairly displaced. They also complained that the town tried to push them out by slicing apart the rowhouses each time the township acquired a unit, and by removing sidewalks and parks.

Township Solicitor George Saponaro, who negotiated the settlement, initially agreed to an interview to discuss the progress of the redevelopment, but did not return repeated calls. Olga Pomar, an attorney with South Jersey Legal Services who represents the residents, could not be reached for comment.

Vera said that Pomar had called a meeting with the residents last summer to discuss the status of the project. She told them the developer wants to demolish the last few homes in one section of the Gardens early next year to begin building the shopping plaza, he said. The five families who still live there were then asked to put their names in a basket to determine who would get the first of the replacement homes.

Vera and Lopez were chosen. The other three families will be moved to vacant rowhouses in the Gardens while they wait for the next group of homes to be built, Vera said.

The settlement was reached only a few days before an appeal was scheduled to be heard by the U.S. Supreme Court. The Gardens residents who get the replacement homes must continue paying their mortgages and must assume a $20,000 debt toward the upgrade for the new units. The homes are to be built by the end of 2018 or the township will have to pay $150,000 to each affected family.

Lopez said that she became emotional when her name was drawn from the basket. "I started crying," she said, realizing she may be in her new home sooner than she had anticipated. "It's kind of surreal."

"Hopefully, I'll be in my new home in the summer, or by next Thanksgiving," she said.

Luis Lopez (no relation), who works in a restaurant and who also fixes computers, said that he was also focused on the move. "I'm anxious," he said of the delay in the construction.

But he said he is excited about getting a new house where he and his ailing mother will live. The Gardens has been their home for 17 years and they were upset when town officials threatened to use eminent domain to get them to move away.

"It will be a fresh start and new future," he said. "We want to live here and die here and enjoy life here."