EVERETT – Welcome to Donovan Lane.

At a glance, the neighborhood of 1920s-era houses appears deeply rooted in Everett’s history.

Upon closer examination, however, the aging wood structures on 12th Street across from Hawthorn Elementary School rest on freshly poured foundations.

The homes have newly seeded lawns, young fruit trees, underground utilities and the type of grouped mailboxes found in modern subdivisions.

This block of old houses is literally and figuratively breaking new ground in north Everett.

Donovan Lane is the brainchild of developer Steve Hager, who saved 11 houses from demolition on their original lots a half-mile away last year.

“If I wasn’t an optimist, I wouldn’t be doing what I’m doing,” Hager said, walking through a relocated two-story bungalow with oak floors.

The 54-year-old University of Washington graduate’s latest project has drawn much praise. City officials say he’s helping to turn a poor neighborhood into a success story.

The story began with bulldozers warming up to demolish one of the city’s oldest neighborhoods.

Providence Everett Medical Center had planned to level nearly two dozen houses that it owned in the Historic Donovan District. It wanted to clear the land for a $500 million expansion of its Colby campus.

The addition promised to improve heath care in Everett, but the hospital’s steel-and-concrete dream also sparked outrage.

Neighbors and historic preservation groups said the houses, built by Edward Donovan after World War I, should stay put.

As an alternative to demolition, Providence offered the doomed houses free to anyone who could move them.

Hager was the only qualified taker.

Patty DeGroodt, the hospital’s chief strategic officer, said others wanted the free houses, but didn’t have the land or money to move them.

“It’s a big project to move a house,” she said. “You need to have property and you can’t move them long distances. There are a lot of constraints.”

Last year, Hager bought 10 acres from Group Health in a transitional neighborhood east of Broadway.

After getting initial approval from the city, movers in October 2005 started hauling the houses to the property near the Boys &Girls Club of Snohomish County.

Nearly a year later, tradesmen at the site are busy sanding floors, painting cedar siding and patching up old bathroom tiles.

While the workers hustled at the site on a recent morning, Hager’s cell phone rang constantly.

A lot of work remained.

“I’ve been trying to manage this project from the bottom of a trench,” Hager said. “It’s like building a house in reverse.”

Still, with new foundations, new plumbing, forced-air gas furnaces, new chimneys and good roofs, most of the heavy lifting is done.

The houses range from about 700 to 2,000 square feet.

Hager hopes they will sell for $250,000 to $350,000 apiece.

In one single-car garage serving as a workshop, Hager picked up a piece of tight-grained hardwood remnant being salvaged for a window wrap.

“The quality of the wood that you find in these houses, you can’t find today,” he said.

Inside, some of the houses retain their original cast-iron pedestal bathtubs, crystal-glass doorknobs, brass fixtures and wavy glass windows. Each still has a sturdy hand-fired concrete fireplace.

The real estate company selling the houses is trying to cash in on the 1920s charm.

As a reminder of their history, each house will have a plaque outside indicating its original address.

The project was more difficult and costly than Hager first anticipated, he said.

Frank VanderWel, the project’s general contractor, said finding labor has been a challenge.

Everett Mayor Ray Stephanson said the relocation of Donovan homes was a good compromise to the dispute surrounding the hospital expansion.

“Many situations that we encounter in modern life do not have easy solutions,” he said. “The relocation of half of the Donovan homes to a new neighborhood preserved a part of history we thought was lost to us.”

Still, not everyone sees the situation as a positive.

Garrik Hudson-Falcon, president of the Northwest Neighborhood Association, said he still mourns the loss of 22 Donovan houses – a quarter of the Historic Donovan District.

“It’s bittersweet for us,” he said. “Bitter because we’d like to see them stay where they were. But the reality of it is that they were going to be moved or destroyed. And we’d rather see them fixed up.”

Reporter David Chircop: 425-339-3429 or dchircop@heraldnet.com.