Finally getting the mix right on Roosevelt Island.

Located a mere four-minute tram ride and several stops on the F train away from midtown Manhattan, Roosevelt Island is about to undergo some vast residential changes in the coming months, bringing the island closer to fulfilling the vision of its original developers.

Riverwalk Place, a 230-unit luxury condominium development in Southtown, is set to open its doors in January, and the Octagon Park Apartments and Tower, a 500-unit residential development on the North End, will welcome tenants next March.

"There's intense interest in the island," said Herbert Berman, president of the Roosevelt Island Operating Corporation.

"I think as in any type of boom, people look to the expanded area for potential development. We have a beautiful island and open space. The people in control of the island decided they would [set] a competitive price to encourage real estate. Now there's intense interest [from developers.]"

The island was originally bought by the City of New York in 1828 from the descendants of Captain John Manning and transformed into an island for municipal institutions such as prisons, poor houses and nursing homes. In 1921, the island was renamed Welfare Island to reflect its role as a repository for the ill and outcast.

As the institutions gradually closed down, Mayor John Lindsay organized a committee to devise a plan for the island and in 1969, the New York State Urban Development Corporation signed a 99 year lease with the City to develop the island, using a master plan designed by architects Philip Johnson and John Burgee as its guideline. This plan called for a mixed-income community of 20,000 people living in 5,000 units in a largely traffic free environment.

The first residential complex opened in 1975, followed a year later by three housing complexes, bringing the total number of units to 2,141. In 1989 an additional complex of 1,107 units was completed.

Today, the island's population stands at roughly 10,000, a figure that is expected to rise dramatically as the island's secret starts to leak out.

"Roosevelt Island is ideally located for housing," said Bruce Redman Becker, the president of Becker & Becker Associates, the developer of the Octagon.

"The master plan developed in the late sixties anticipated a lot more housing than is on the island now. I think particularly with the suburbs becoming less attractive and people wanting to have ready access to the city, as well as suburban amenities, it's ideally positioned to meet those needs."

The Octagon, which makes use of the refurbished remnants of the New York Lunatic Asylum, was conceived as a green building and has already won several awards for its environmentally sensitive aspects. Designed by David Rockwell, it will feature a 30,000 s/f community center that includes a day care center, a swimming pool, a library and a gym, along with other amenities.

Leasing offices for the building are set to open in January. Rent for studios starts at $1,400 per month; one-bedrooms at $1,600; two-bedrooms at $2,300; and three-bedrooms at $4,100. So far, 700 people have made inquiries with 40 signing leases in a pre-leasing process.

As general contractor on the project, Gotham Construction is restoring the Octagon Tower to its former glory, with a renovation of the five-story flying circular staircase that will serve the common areas of the new development.

They've also added two residential wings with apartments where the old hospital wings once were located.

Said Becket, "We've taken the remains of an eccentric and gorgeous early 19th century structure long in ruins, and are bringing it back to life as an apartment community with a mix of affordable and market-rate rentals, an ecological park, and a variety of other features not normally found in a Manhattan apartment project."

Riverwalk Place, a joint venture of the Related Companies and the Hudson Companies, is actually the third building in a series of nine planned residential developments. The first two buildings were developed as staff housing for the Memorial Sloan-Kettering Cancer Center and the Weill Cornell Medical Center. The fourth building, Riverwalk Landing, is set to break ground in January. Once completed, all nine buildings will house 2,000 units.

"We're developing each building every year to year and a half," said David Kramer, principal at Hudson Real Estate. "We consider the projects done today to be a huge success."

Currently, 95% of Riverwalk Place is leased, with a waiting list of applicants for all future buildings. Of the new owners at Riverwalk Place, 30% were already Roosevelt Island residents.

Kramer estimates that prices in Riverwalk are discounted by 30% compared to prices in Manhattan. Studios are selling for $400,000; one-bedrooms for $650,000 to $740,000; two-bedrooms for $815,000 to $1.025 million; and three-bedrooms for $1.15 million.

Though cheap compared to Manhattan prices, Roosevelt Island residents have long gotten used to moderate housing prices. Of the island's already existing residential complexes, four were built as Mitchell-Lama housing in the 1970s.

One of these developments, Eastwood, has already had its Mitchell-Lama eligibility expire. The majority of its tenants were able to qualify for so-called "sticky vouchers" from the government, which allow them to remain in subsidized housing.

Reportedly, the Sheldrake Organization is in the process of acquiring two other Mitchell-Lama buildings whose eligibility is set to expire in the near future. A Sheldrake spokesman declined to comment on the deal because the company is "still in negotiation."

Both Riverwalk and the Octagon are developing portions of their complexes as affordable housing, according to government requirements. Forty percent of Riverwalk is designated for affordable housing.

One hundred units at Octagon are designated for middle-income housing, while the remaining 400 are at market rate. The addition of this residential space stands to make the island much more economically diverse.

All of this development in the residential sector is set to bring about changes in other areas on the island as well. In fact, Riverwalk has also planned Riverwalk Common, a town square with retail.

"Nothing is official, but we're talking to some great brand name tenants and our opinion is that's going to be a great retail location right where the F line subway stops north of the tram," said Kramer. "I think retail is going to do very well with the existing population supplemented by new residents coming to the island from Riverwalk and Octagon." Already Starbucks has committed to the venture and is set to open in one of the existing Riverwalk buildings next month.

"The additional housing will only improve the island. There will be more interest in commercial development, bringing in better stores," Berman said.

"Increased revenue will create a vibrant community with people of a broad spectrum of income. [The island will] maintain affordable housing and market rate housing, which is the healthiest mix of housing. There will be no low or high income ghettos. Mixed housing is the ideal situation."