A new Whole Foods in Midtown will be the centerpiece of a posh real estate development with more than 200 high-end apartments on a prime urban site between downtown and Montrose.

The ambitious project, planned at a time when the local economy has started to slow, will be developed by Houston-based Morgan, which has built other upscale apartment complexes in Midtown, elsewhere in Houston and in other cities.

The company plans to start construction early next year on the eight-story project at the northwest corner of Elgin and Smith.

Morgan president Alan Patton said the Whole Foods store will draw more residents to Midtown and have the potential to change the focus of the neighborhood.

When a Whole Foods moves in to an urban area, "it moves the center of the universe to that location," Patton said.

Earlier this week, Austin-based Whole Foods Market announced plans for the Midtown store, its 11th in the Houston area.

Some see it as a sign that Houston's urban core has "arrived."

"It's the Good Housekeeping stamp of approval for a neighborhood," said real estate attorney Reid Wilson, whose office is in Midtown. "You've arrived when you have a Whole Foods."

Patton said the project is likely to become a hub for millennials who seek out places to live where they're not totally reliant on their cars.

"They like to be around their friends," he said. "Whole Foods has a bar and all these prepared foods. They can walk to eat, hang out, socialize and buy their groceries, and do it on a daily basis."

The organic market will fill 40,000 square feet on the ground floor, with a second-story mezzanine for seating. The store will sit alongside Smith Street, which is a primary traffic artery out of Midtown and downtown, attracting workers and residents who aren't within walking distance, the developer said.

260 units

Houston-based architecture firm Ziegler Cooper-designed the 260-unit building, which will have studios and one- and two-bedroom apartments.

Units will average 820 square feet, and rents could be in the range of $2.40 per square foot. Amenities will include Bluetooth sound systems, a state-of-the-art fitness center, and a resort-style swimming pool and courtyard.

The building will have two levels of underground parking for Whole Foods and two levels of parking above the store for residents, who will reside on the top levels.

The Midtown property in the 3100 block of Smith houses a former Social Security Administration building The development site will also include a stretch of Rosalie that runs one block between Smith and Brazos and additional land just to the north. Morgan struck a deal with the city to acquire a portion of Rosalie for approximately $800,000. That section of the street will close.

Morgan declined to reveal the full development cost.

In a statement, Midtown Redevelopment Authority president and CEO Matt Thibodeaux said the new project will "be one more establishment that increases the quality of living for residents and visitors to Midtown."

Urban living

"Midtown continues to set the standard for urban development and living," he said.

Morgan has been branding its new complexes with the name "Pearl," which the Midtown project will take on as well.

The project will support even more high-density development in the area, Wilson said.

"Lenders and investors are going to sit up and take notice," he said. "I just can't tell you how significant it is."

Even though the multifamily market has begun to soften amid slower job growth and an abundance of new units becoming available, Patton is confident in his company's new project, especially with Whole Foods in tow.

"If the market is slow for the next two years, that's fine," he said. "We're not going to be open for two years."

The end of 2017

The store is expected to open by the end of 2017, a Whole Foods spokeswoman said this week after the company announced its second-quarter earnings.

The grocer also revealed plans to launch a "value-oriented" concept targeting millennial shoppers next year. It did not say if the Midtown store would be the new concept.