A development team headed up by Avalon Bay and Bridge Housing has been selected to build 1,100 units on the Balboa Reservoir, the 17-acre parking lot long seen as one of the city’s best publicly owned residential building sites.

The winning team, which also includes Mission Housing and Habitat for Humanity, is proposing to create a new neighborhood “organized around a large central park with direct connections to surrounding neighborhoods” of Ocean Avenue and Westwood Park, plus the San Francisco City College campus.

The project envisions a row of two- and three-story townhomes on the western edge of the property, with rear gardens backing up onto the residential enclave of Westwood Park. Taller buildings, up to seven stories, would be located on the eastern end of the property nearer City College. The project would include 1,260 parking spots, including a 500-space garage to be shared with City College. The 2.2-acre central green space will be called Reservoir Park.

The Avalon Bay-Bridge group beat out a project sponsored by Related of California, which was proposing 680 units, and the Emerald Fund, which wanted to build 1,245 units.

Ken Rich, director of development for the city’s Office of Economic and Workforce Development, said that the winning team “brings tremendous experience building quality affordable and mixed-use housing, working thoughtfully with local communities, and successfully tackling large and complex projects.”

He pointed out that Avalon Bay and Mission Housing are already active in the neighborhood, with Avalon Bay building the apartment complex and Whole Foods at 1200 Ocean Ave. and Mission Housing working on the redevelopment of the Upper Yard above the Balboa BART Station.

“They are a great fit for the Balboa Reservoir project,” he said.

The selection committee included public officials as well as representatives of the neighborhood and City College. The three developers presented their proposals at a community workshop in June. Developers were asked to make 50 percent of units affordable to low-, moderate- and middle-income households; to create at least 4 acres of open space and to collaborate with City College to ensure that the project does not adversely impact students’ access to campus.

The news comes as Ocean Avenue has attracted a wave of investment over the past five years, including the Whole Foods and four new apartment complexes totaling more than 300 units.

Lisa Spinali, chairwoman of the Balboa Reservoir Community Advisory Council who was the neighborhood representative on the selection committee, said the winning group understood the importance of parking and of preserving the neighborhood character, while not scrimping on creating badly needed housing.

“This is a rare opportunity of a lifetime — 17 acres in San Francisco — and we better make full use of it,” Spinali said. “If we get it right, we will not only maximize the housing opportunity, but create a convening place that will actually unify the neighborhood.”

The developer selection is the first step in a two-year process that will require approvals from the Planning Commission, the Board of Supervisors and the San Francisco Public Utilities Commission, which owns the site.

J.K. Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @sfjkdineen