The medical offices, at the upper end of the site, are to complement a three-hospital complex directly north across Michigan Avenue, consisting of Children’s National Medical Center, MedStar Washington Hospital Center and the Veterans Affairs Medical Center.

The reservoir and filtration plant were constructed more than 100 years ago. The landscape architect Frederick Law Olmsted Jr. designed the landscaping, including a perimeter pedestrian walk, which will be partly restored.

The site was also used informally as a park by neighbors until World War II, when it was fenced in for security reasons. The tract is named for Senator James McMillan of Michigan, chairman of the Senate Park Commission, which in 1901 put forth a plan to redesign the city’s monumental core and park system.

Recognizing the site’s history, the developers agreed to incorporate all 20 concrete silos that were used for sand storage and four small brick “regulator” buildings that housed the controls for the sand filtration process. The Army Corps of Engineers, which still operates the reservoir just west of the site, switched to using chemicals for water purification in the 1980s. Also abandoned were the underground chambers, where the water was filtered through the sand. All but two chambers are to be demolished — one to be integrated into the community center and park, the other possibly for retailing and art space.

Despite its promised benefits, the project has deeply divided the neighborhood. Opponents, organized as Save McMillan Park, say they have gathered 7,300 signatures against it. They argue that the development is too dense and want the site to become a park. Supporters include neighbors whose yard signs say “Create McMillan Park” and Kenyan R. McDuffie, the District Council member representing the area.

Mr. McDuffie lives across the street in the rowhouse his grandparents bought in 1951 and in which he grew up. “The site has been completely unproductive in my lifetime,” he said. Mr. McDuffie added that the site has been an unkempt refuge for the homeless and at one time was considered for a new jail. “My support is because as a resident and neighbor I want to see the fence finally coming down. The city acquired it to develop it.”