Denver’s last Kmart, shuttered earlier this month, will be replaced by as many as 350 rental units as the Denver Design District, south of West Alameda Avenue, is gradually redeveloped.

The project likely will break ground by the end of this year.

The apartments are the first phase of redevelopment for the lot on South Cherokee Street, which is in line with the area’s general development plan that aims to create a denser, more transit- and pedestrian-oriented neighborhood, said Dan Cohen, development manager for the D4 Urban LLC-owned property.

“This is really an early phase of obviously a much broader redevelopment program but it will be physically phased over many years,” Cohen said.

The complex is expected to be five stories along West Alameda Avenue, rising to seven stories as it goes south. South Cherokee Street should gain a bike lane on the east side. The development also calls for a 460-space parking structure, according to the Baker Historic Neighborhood Association.

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The apartments will take up 3 of the 8 acres on the site, Cohen said. The pace of redevelopment depends on whether other retailers on the site remain viable.

The apartments were designed by Kephart Architecture, the same architect as the Denizen complex located about 20 feet from the Alameda Station light-rail platform, just south of the Kmart property. It is being developed by Missouri-based Price Development Group. Cohen said the apartments, which average about 815 square feet, will likely rent at market rate.

Price Development Group has submitted project plans to the city and is still in the review process. The developer met with neighbors Tuesday night to talk about the plans. Cohen said Kmart is expected to be out of the property sometime in May.

“A lot of people, I know, are curious about the timing of the rest of the development and I would say it’s going to be phased over time and dependent on market conditions and existing lease commitments,” he said.

D4 Urban has lease agreements with existing tenants on the property, Cohen said. The longest option goes out about 40 years. “Whether or not those leases will be extended another 40 years, that’s to be determined.”

“There’s definitely a changing dynamic going on in the retail world and the type of stores that are viable,” he said. “That’s what will dictate the pace of change.”