A former nondescript parking lot at the corner of Jefferson Street and Holmes Avenue in downtown Huntsville will soon become a five-story development featuring 197 lofts and 21,000 square feet of street-level retail and restaurant space.

Sealy Property Development, joined by the City of Huntsville and Chamber of Commerce, held a groundbreaking ceremony Tuesday for the company's latest mixed-use endeavor, The Avenue.

Charlie Sealy III, who is developing the $34 million project with his wife Sasha, said the lot where The Avenue will rise was a "bustling" block for much of Huntsville's history. From 1860 to 1970, he said the site boasted a mix of uses, including a hotel, residences and various businesses.

In the 1970s, Sealy said the downtown area changed as suburban growth occurred. The buildings were eventually torn down, he added.

"Since the '70s, it's been vacant," he said. "Sasha and I really look forward to bringing it back to life and getting activity here in downtown."

Site work has begun at The Avenue, which has signed letters of intent with new tenants to be announced at a later time. The project also includes a resort-style swimming pool, high-end amenities, an on-site 400-vehicle parking deck and large sidewalks to encourage outdoor dining and pedestrian walking.

The full development will be operational in about 16 months, with some lofts and tenants launching in a year. Golden Construction, which built the $11.5 million Belk Hudson Lofts for the Sealys in 2012, is the general contractor for The Avenue.

With Twickenham Square already open and CityCentre at Big Spring breaking ground this summer, Downtown Huntsville Inc. CEO Chad Emerson said The Avenue will be a game changer for the area.

"This is really important because it anchors the north side of downtown," he said.

The development agreement allows Sealy's company to lease the 2.7-acre site from the city for $100 a year for the first 50 years. The rent will jump to $120,000 annually after that period, while the city retains ownership of the property.

AL.com previously reported that the city will spend about $2.8 million in infrastructure improvements to the area surrounding The Avenue. Upgrades include landscaping, brick-trimmed sidewalks, new street lamps and benches, and more on-street parking.

Mayor Tommy Battle called the Sealys "pioneers" of downtown Huntsville living.

"I have a feeling if I know Charlie and Sasha this will be something that is very unique for this area, something that has some very special aspects to it that is hard to match," he said.