A residential development boom is quietly taking shape in San Francisco’s Excelsior district, an unpretentious enclave that residents often complain has been forgotten when it comes to investment and services.

On Monday, a development group is set to submit plans for a 426-unit apartment complex on outer Mission Street, a project that would include a new Safeway grocery store, a neighborhood health center and other retail.

The Mission Street project, a joint venture between nonprofit developer Bridge Housing and the National Electrical Benefits Fund, combines two of the largest plots of land in the neighborhood: the Valente Marini Perata & Co. funeral-home site at 4840 Mission St. and the Safeway at 4950 Mission St., just south of the recently closed mortuary. Combined, the two parcels cover 3½ acres.

In the first phase of the plan, the funeral-home site would be redeveloped with 175 affordable units above a 53,000-square-foot Safeway and a 10,000-square-foot Mission Neighborhood Health Center. In phase two, the existing Safeway, which is 40 percent smaller than its proposed replacement, would be knocked down to make way for 251 market-rate housing units, along with about 15,000 square feet of retail.

The project is the evolution of an earlier plan by Bridge Housing that would have put about about 100 affordable units and 20 market-rate townhomes on the funeral-home site. Supervisor Ahsha Safai, who represents the neighborhood, said he pushed the property owners to “go back to the drawing board” and come up with a denser scheme.

“I felt that the earlier plan did not take maximum advantage of the site,” Safai said. “This is a once-in-a-lifetime opportunity.”

Meanwhile, the union pension fund that owns the Safeway property, the National Electrical Benefit Fund, had expressed interest in exploring a combined development, provided that it be timed to keep the existing Safeway open while the new one was being built.

The Excelsior has long had a lively retail strip along Mission Street, a mix of pupusa joints, Chinese restaurants, nail salons, delis, produce markets, dollar stores and cafes. But in recent years the corridor has struggled as mom-and-pop businesses have closed. The corridor now has the highest vacancy rate of any major shopping district in San Francisco, according to Safai.

Safai, who was elected to the Board of Supervisors last year, said that pumping new life into that part of Mission Street has long been a concern of the neighborhood.

“There are too many empty storefronts, with sheets in the window. We are not maximizing our potential,” Safai said.

The mix of housing will be 59 percent market rate and 41 percent affordable, Safai said. The developer will be seeking increased density in exchange for a level of affordable housing well above what the city requires.

Kate Hartley, acting director of the Mayor’s Office of Housing and Community Development, stressed that the developer and the city will embark on an intense outreach process with the neighborhood. In addition to the new Safeway, the project will have a public plaza and new retail opportunities.

“We want to build in those neighborhoods, like the Excelsior, that have not traditionally had much in the way of affordable-housing resources,” she said. “The Excelsior, in particular, has been suffering from a high eviction rate and has a strong need for affordable housing.”

The Safeway development is the biggest project in the Excelsior, but not the only one.

Other proposed developments in the neighborhood include 103 units at 915 Cayuga Ave., 125 units at 65 Ocean Ave. and 100 units next to Balboa Park BART Station. Safai said the total pipeline includes about 800 units — enough new residents to support currently missing retail like a hardware store, a bike shop and a family-oriented event space, he said. Only one project is already under construction — 61 units at Mission Street and Seneca Avenue, which will be completed next year.

The new residents will help retailers thrive and reduce blight, Safai said. “This is about bringing stores, service and investment into this neighborhood that has been the forgotten part of the city,” he said.

Michael Tufo, an Excelsior native and owner of the Calabria Brothers Italian deli down the street from the Safeway, said, “The new Safeway is going to open things up for a lot of other businesses.” He said there are “five or six” vacancies on his block, far more than when he opened six years ago.

“I’m not saying we are going to be a premier neighborhood, but at least somewhere people want to come to and shop and maybe check out my deli,” he said. “Right now there is not much foot traffic.”

Rumors about the mega-development deal have been circulating for months along with concerns that the Mission Neighborhood Heath Center would be cut out of the project. Executive Director Brenda Storey said the project will allow her to increase the health center from about 4,000 square feet to about 10,000. The center will add dental services and expanded primary care, pediatric and women’s health services, Storey said.

“We are happy to be able to go into a space in an affordable-housing building — our mission and our role is to serve working-class families,” she said. “We will have more space so we can serve more patients.”

Bridge Housing President Cynthia Parker said the units would be larger than average to cater to families. She said her company has been focused on the Excelsior for several years.

“The city is so compressed, and there are such pressures on the housing market, we are seeing neighborhoods that have been overlooked coming into their own as far as development,” she said.

The National Electrical Benefit Fund has hired San Francisco developer Emerald Fund as its manager on the project. Emerald Fund President Oz Erickson said that building dense infill housing over grocery stores is a proven model for revitalization.

“I think this is the catalyst for the neighborhood and will serve as an introduction for other people to provide housing and new retail,” he said. “The impact of having a first-class grocery store is enormous — other retailers want to locate next to first-class grocery stores.”

The Safeway-anchored mixed-income housing community has the potential to inspire other developers to take on other underused parcels. Standing in front of the Safeway on Friday, Safai pointed to a closed, fenced-in used-car lot across the street where potential car buyers are instructed to call a number if interested in a particular automobile.

“What kind of business is that? There is not even anyone working there,” he said. “Is that the highest and best use for that property? Anywhere else in the city, that lot would have been developed.”

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