Updated at 10:40 a.m.

A proposal to build the first mixed-use transit village along the Hiawatha light rail line -- featuring apartments, offices, retail and a public market -- received a largely warm reception from a packed community meeting Thursday night.

The 6.4-acre project would transform the intersection of Lake Street and Hiawatha Avenues, an area that has failed to live up to development goals that were set during light rail planning. It would be built in phases at the intersection's southwest corner, where Hennepin County plans to purchase land currently owned by the Minneapolis school district and sell it to a private developer.

"There are a lot of wins here," Hennepin County commissioner Peter McLaughlin told the room of about 150 people, most wearing "Build it green!" stickers. He observed the potential for transit-oriented development, having retail front Lake Street and finding a permanent home for the Midtown Farmers Market.

The county plans to use the office space as the South Minneapolis hub of its social services operations, which are being decentralized from the downtown Century Plaza office. The county's finance and budget director, David Lawless, said the purchase price from the school board would likely be between $7 and $9 million.

Previous discussions to redevelop the site were hampered by the school district, which has to move its adult basic education and English courses out of the building. Current plans envision keeping the building for a number of years as the phased development takes shape, followed by a demolition.

Anywhere from 600 to 800 people of varying ages and income may eventually live on the site, depending on the final number of units, said Jack Boarman, CEO of BKV Group, part of the development team putting the project together. Portions of the space would be geared toward senior housing and affordable housing.

The goal is that many residents would use transit, including an adjacent light rail line, bus routes along Lake Street and possible future options along the Midtown Greenway.

“There’s really a need for those people coming to the Twin Cities to live next to transit, because then they don’t need a car," Boarman said. "And then that makes our city even better.”

The center of the project would feature a 1.3-acre urban plaza that would house the Midtown Farmers Market "But it’s also going to be the celebratory platform for ...community cultural events and opportunities," Boarman said.

Several people questioned why the project includes extensions of the street grid, versus making the entire site a pedestrian-oriented space. The development team responded that the street extensions are partly intended to serve the farmers market, but Boarman added that they also want the space to feel connected to its surroundings.

Other attendees raised concerns about how the project's parking plan would accomodate so many varying uses without parking spilling into adjoining neighborhood streets or creating additional congestion. "I think parking's going to be an absolute nightmare here," said one woman who noted that the adjacent YWCA already brings many vehicles to 22nd Avenue. Boarman said they intend to perform a transit, parking and traffic study of the area.

Another man asked about what would be done to ward off gentrification. Boarman said they plan to have many units sized under 700 square feet, allowing for lower rents. He later added that having shared parking for the site's mixed uses will also help lower rents.

Other points were raised over the visibility from Lake Street, adding pedestrian improvements to the intersection and ensuring the educational programs continue at a convenient location. Eric Gustafson, executive director of the Corcoran Neighborhood Organization, said their board is on record from 2011 supporting inclusion of the education programs in the new space or another location in the neighborhood.

Robert Doty, the school district’s chief operating officer, emphasized that both the adult basic education and the Transitions Plus program – which was slated to move into the building – have new homes.

“We are looking at…6 or 7 different options,” Doty said.

That was the primary concern for a woman named Elsa, who told the crowd that she is finally returning to school after raising a family and sending her to sons to college.

“But where will I go if this school is going to be closed?” Elsa said. “Let us know where we will go, because I’m speaking [on behalf of] the hundreds of students who participate here.”

The project is still in very early phases. The neighborhood has not taken a formal position on the new proposal, and both the school board and county board will need to sign off on their final agreement.