The 20,000-square-foot bulkhead at Pier 29 is a mere speck in the Port of San Francisco’s vast real estate holdings, a portfolio that comprises 832 acres with about 525 tenants along 7½ miles of bayfront.

Yet what happens in the small corner of a vacant shed is shaping up to be the biggest waterfront development fight the city has seen in years.

In an effort to pump life into an empty pier shed next to the busy James R. Herman Cruise Terminal, the port is proposing to lease the bulkhead to a group planning a hybrid cafe and retail shop called the Bulkhead. The store would allow residents and visitors to sip locally made brews and wines while browsing blouses, ceramic bowls and chocolate bars designed and manufactured in San Francisco.

Under the proposed term sheet, which has been approved by the Port Commission and is to go before the Board of Supervisors’ Budget and Finance Committee next week, the real estate investment group Jamestown would spend $5 million to build out the interior space, which lies at the western end of the 123,000-square-foot shed. The lease would last 15 years.

While the proposal seems modest, it has mobilized a coalition of waterfront watchdog groups that have successfully beaten back a mall and office complex on Piers 27-31, condos across from the Ferry Building and the Warriors arena on Piers 30-32.

The group is calling itself No Mall on the Waterfront — a throwback to the No Wall on the Waterfront slogan employed to kill the proposed housing development at 8 Washington St. in 2013 — and has been rallying neighborhood groups across the city against the project.

Campaign leader and Telegraph Hill resident Jon Golinger, who also led the fight against 8 Washington St., said that the proposed lease is a betrayal of a promise that the city made in 2001 to turn Pier 29 into a recreation center similar to Chelsea Piers in New York.

Since then, Golinger has been involved in fighting two major development proposals for Piers 27-31, one by the Mills Corp. in 2001 and a second by Shorenstein Properties in 2006. Both included some recreation but far more office and retail space than neighbors wanted. Golinger said that the Jamestown lease at Pier 29, while just 20,000 square feet, would eventually creep into the entire shed.

“It feels like deja vu all over again,” Golinger said. “It’s meeting strong community objection across the city for real reasons. We fought to make real recreation.”

While he acknowledges that the project hardly qualifies as a mall — “we’re calling it a mini-mall,” he says — his fear is that developing 15 percent of the pier as retail will make it unlikely that the rest of the space can become a center for things like batting cages, climbing walls, volleyball, indoor soccer and boating.

“Pier 29 is the only place in the waterfront plan designated for active recreation,” said Golinger.

Both Jamestown and port Director Elaine Forbes said a 20,000-square-foot cafe/shop with local goods couldn’t be more different from a mall, even a “mini” one.

“There is nothing about it that is a like a mall,” said Forbes. “A mall connotes something large. This is small. This is a lease, not a development. It’s not run-of-the-mill stuff you can get anywhere else. It’s stuff that is unique to San Francisco.”

Until the city started gearing up for the America’s Cup races in 2012, Pier 29 was used for storage, construction staging and parking. With the regatta promised use of the pier, tenants were forced out in early 2012. In July of that year, a fire in the bulkhead caused $15 million worth of damage, but the structure was quickly rebuilt.

The idea of leasing out the space emerged the next summer when a pop-up restaurant, the Waiheke Island Yacht Club, took over the space during the America’s Cup. After getting a positive response to the temporary restaurant, the port solicited proposals for a private company to “improve and operate a visitor-serving facility” with a “San Francisco Bay Area flavor.” The port called for a concept that would not compete with Fisherman’s Wharf or the Ferry Building.

With the new cruise ship terminal at Pier 27 averaging 300,000 passengers a year, the need for a place to stop and refuel became evident.

“There is a big gap when you get off a cruise ship and walk toward Fisherman’s Wharf — there is nothing to eat, nothing to drink, nothing to look at,” Forbes said. “The idea is to activate a portion of the pier in a way that would be faster and cheaper than a typical port reuse development. Putting the full pier out to bid would take years — this was something smaller that could serve the public sooner.”

Along came Jamestown, which is one of the largest property owners on the northern waterfront and has its local headquarters at Waterfront Plaza, across the street from Pier 29. Jamestown Vice President Remy Monteko said places to eat and drink are sparse in that part of the northern waterfront. Jamestown is working with SF Made, a trade group with more than 800 members that advocates for manufacturing in San Francisco, on the retail concept of beer, wine and products made in San Francisco.

While Golinger is painting the Atlanta-based Jamestown as an out-of-town developer insensitive to local needs, Monteko said that the group owns more than 500,000 square feet in the neighborhood, including 55 Francisco St. and the retail portion of Ghirardelli Square.

Supervisor Aaron Peskin, who represents the neighborhood and has actively fought projects like 8 Washington and the Mills Corp. development, said he is not opposed to the Jamestown lease. But he said that the port needs to take steps to create recreation space on that stretch of piers.

“Opponents of this project have reminded us of an unmet commitment and promise, one that goes back two decades, of recreation on the northern waterfront,” said Peskin. “I don’t think that is mutually exclusive with Jamestown’s relatively small project. I think we can have our cake and eat it, too.”

Peskin said the city should look into issuing a request for proposals for the entire pier, something the port has been unwilling to do because it is in the process of developing a new waterfront plan.

Golinger said he has no problem with the Jamestown concept on a different pier, but that Pier 29 should be reserved for recreation. He vowed that, like other companies that have attempted to build on the waterfront, Jamestown is in for a battle.

“We will eventually have to figure out whether to fight this in court or go to the ballot,” Golinger said. “We are not going away.”

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

Twitter: @SFJKDineen