Ground was broken yesterday for a 20-story, 296-unit rental apartment building on the northwest corner of Morningside Drive and Cathedral Parkway by AvalonBay Communities Inc.

AvalonBay Communities, which has its headquarters in Alexandria, Virginia, has three other developments in Manhattan including large projects on the Bowery and East Houston Street. It has an ownership interest in more than 165 apartment communities with about 48,000 apartments in 10 states and Washington, D.C.

The developer signed a 99-year lease with the Cathedral Church of St. John the Divine last September for an "underutilized perimeter parcel of the cathedral's Close.

R. M. Kliment + Frances Halsband Architects, best known in the city for the very attractive entrance to the Long Island Rail Road on West 34th Street, is the architect for the development, which will have a two-story glass entrance opening onto Cathedral Parkway with landscaping by Rader + Crews.

Construction is anticipated to be completed within 24 months.

The cathedral required that the project's design and materials be of high quality and that no buildings on the grounds would be demolished or altered.

"This is a momentous day in the long history of the Cathedral Church of St. John the Divine, the largest Gothic Cathedral in the wolrd, built to be a cathedral for all people," declared the Very Rev. Dr. James A. Kowalski, Dean of the Cathedral. "We initiated this effort over seven years ago as part of a strategy to preserve the buildings and gardens on the grounds as well as the religious, educational, cultural, social and civic programs that the Cathedral supports," he said.

The New York City Housing Development Corp[oration financed the construction by issuing $100 million in tax-exempt bonds through its 80/20 program, which will insure that 20 percent of the apartments will be affordable to households earning up to 50 percent of the area's median income.

The Cathedral announced that it will establish a Housing Mission Fund in an agreement with AvalonBay and that the Cathedral's fund will contribute $200,000 annually for thirty years to the 59 affordable apartments in the development.

AvalonBay has selected The Phipps Houses Group to oversee the development's affordable housing program.

Shaun Donovan, commissioner of the city's Department of Housing, Preservation and Development, said that "this past December Mayor Bloomberg signed legislation reforming the 421-a program to provide incentives to construct more affordable housing on-site while maintaining the incredible housing boom New York City is experiencing."

According to Fred Harris, senior vice president of development for AvalonBay, two sites on the cathedral's grounds were not included when it was being considered for landmark designation a couple of years ago and this is one of those sites.

The building will have a garage, bicycle storage and a community room and apartments will range in size from about 500 to 1,350 square feet.