When Joel Schiavone and a couple of Boston-area investors ponied up eight years ago for a parking lot, four houses and a rat-infested former Chinese restaurant at Chapel and Howe streets in New Haven, many observer scratched their heads over the desirability of the area.

Indeed in a recent interview, former mayor and current banker John DeStefano admitted he was in the doubters camp.

Urban pioneer Schiavone has a back full of arrows and his reach has often exceeded his grasp, but once again he’s been proven true on his knowledge of the trail ahead. Now a new $17 million, six-story luxury apartment block with 136 residential units, 92 parking spaces and 5,000 square feet of retail is taking shape on the property.

New Haven has the Shubert Theater, the College/Chapel Street shopping district and a renewed belief in Fair Haven, for which to thank Schiavone. He originally wanted the space for an apartment block, but couldn’t pull financing in the real-estate collapse that followed the 2006 purchase.

This project however is a major step in tying downtown and Yale student apartment-dwellers to Yale-New Haven’s St. Raphael campus. YNNH’s entrance has already resulted in some properties along that end of Chapel being cleaned up and renovated. Just the other day we saw a female jogger heading up Chapel past the construction site toward the St. Raphael’s outpost.

Yale University itself had considered buying the property in 2008 for its own parking needs when it was building the Yale Sculpture & Gallery Building on Howe Street.

The site had originally been tagged by the DeStefano administration for the Arts High School now located on College street, but was pushed back by neighborhood-dwellers who weren’t eager for high school students to invade their community, as well as Chapel Street retailers weren’t eager to lose prime locations.

Yale tucked its building into a tighter space and opposition evaporated.

The back story on the parking lot acquisition is Yale wanted two of the homes demolished as part of its purchase, but wouldn’t put it in the contract. The university apparently didn’t want to blamed for tearing down the properties.

The owner (Schiavone was out of the picture by then) balked at the terms and Yale eventually included a parking garage in the project to meet its needs, the former restaurant did bite the dust.

Real estate sources (see August BNH) said there was interest in the properties from developers from D.C. to Boston.

Randy Salvatore, president of RMS Co., a Stamford real estate firm that constructs and manages residential and commercial properties, including the  “urban chic boutique” Hotel Zero Degrees in Stamford and Norwalk, is developer for the project.