A new neighborhood is taking shape at the northern end of the three-mile-long railroad line that North Charleston Mayor Keith Summey is pushing to have shut down.

Two model homes are complete, and other lots are marked with white and blue signs, including several that back up to the railroad tracks.

Records show that the neighborhood, the Village at Hyde Park, is owned by three investors, one of whom is Summey's wife.

Summey said Thursday that he sees no conflict of interest with his support for rerouting train traffic and abandoning that rail line, even though his family has an economic stake in the area.

"To be honest with you, I haven't paid much attention to it," Summey said, adding that his rail proposal "wasn't for that development, it was for the entire neighborhood."

City Council recently voted, 8-2, to seek a $3 million U.S. Department of Transportation planning grant for abandoning a three-mile section of rail that cuts through the neighborhood east of Park Circle and building new lines elsewhere. Summey voted with the majority.

The vote came several weeks after Summey unveiled a plan he developed in concert with CSX Corp. and Shipyard Creek Associates LLC to protect as many neighborhoods as possible from trains originating near the new State Ports Authority terminal being developed at the former Charleston Naval Base.

The controversial plan, which could cost about $100 million, calls for abandoning the 3.2-mile-long rail line that runs just west of Spruill Avenue, from Viaduct Road to just south of the Mark Clark Expressway.

The northernmost section of this line runs behind nine backyards in the Village at Hyde Park development.

The mayor's wife, Debbie Summey, is one of three owners of New Village Development LLC, which bought 3.2 forested acres northeast of Park Circle in 2005. Its first homes on Hyde Park Village Lane are now for sale.

The mayor said he sees no conflict partly because he's unsure the section of rail that runs immediately behind the Village at Hyde Park would be abandoned. He said his plan calls for abandoning it south of Braddock Avenue, just south of the subdivision. Summey reiterated his position at Thursday night's City Council meeting.

But John Crangle, director of Common Cause of South Carolina, said at a minimum, Summey should have abstained from voting when the council considered the $3 million planning grant for the rail project.

"I think he's got a problem with that," Crangle said," I really do."

State ethics laws prohibit public officials from using their office for their personal gain -- or for family members' financial gain.

State Ethics Commission Executive Director Herb Hayden said he cannot comment specifically on Summey's situation or whether anyone has filed a complaint regarding it.

Hayden said elected officials don't lose their right to speak out on matters affecting their financial interests, "but when he puts on his official cap and is taking official action or participating in some official action -- if it's going to impact his wife or his wife's business -- then he will need to abstain from participating in that particular activity."

Summey did not list the New Village Development LLC on his Statement of Economic Interests on file with the State Ethics Commission, but he said his wife's involvement in the neighborhood is no secret: She has attended community meetings seeking support for the plan.

Debbie Summey owns the development along with Edwin Pearlstine, a former beverage distributor who now works as a real estate developer and philanthropist, and Marsha Ott, the mayor's secretary and the Summeys' neighbor. Debbie Summey also serves as a Charleston County magistrate overseeing domestic violence court.

The mayor said Pearlstine, the registered agent for the corporation, partnered with his wife and Ott to teach them the basics of development.

Summey said his wife would not comment for this story. "She's not going to get into politics," he said.

Summey also said Pearlstine never talked to him about the rail line -- and Pearlstine confirmed that.

"I never mentioned that rail line with him," Pearlstine said. "He's a very honorable guy. Whatever he tells you, you can believe, unlike a lot of other politicians."

Summey said he understands some may question his motives behind the rail proposal, "and that's all well and good. Those are things people are going to say no matter what, and I can live with that."

He said he is trying to eliminate 36 railroad crossings in the city, including the one next to Hyde Park Village Lane.

"I guess if it's a conflict, I should tell the other 35 streets I can't help you with that because my wife's involved with a piece of property down by the very last street," he said. "I'm not going to do that. I don't think that's what I was elected to do."

The mayor's railroad plan is controversial largely because Norfolk Southern Corp. -- a CSX competitor -- has said it could cause the state to lose port business, such as Norfolk Southern's BMW shipments.

Summey said the city and State Ports Authority signed a memorandum of understanding eight years ago prohibiting trains from going through the northern end of the former Navy base, but Norfolk Southern says that deal doesn't affect its rail lines.

Summey repeatedly has slammed Norfolk Southern for not visiting City Hall to discuss the issue with him, but the company has noted that only the federal Surface Transportation Board has the power to reroute its tracks.

Augie Eckhardt, Norfolk Southern's market manager for international intermodal, has said, "Mr. Summey may not want us to come through there, but the truth is we have rail that runs through there. ... We have the right to run through there."

Port leaders and state lawmakers have said it is important that Norfolk Southern and CSX have access to the port.

Summey's plan faces a host of other hurdles, including whether Congress or the state can come up with the money to build it.

Also, residents south of Park Circle and closer to the port say they want more information about how it would affect them.

State Ports Authority CEO Jim Newsome has stayed mostly on the sidelines during the rail debate but recently said he wants a solution that CSX and Norfolk Southern can accept.