United Properties and StuartCo, both of which are based in Minneapolis, announced Thursday that they have received approval from the City of Bloomington to commence construction of a multi-phase retail and residential development.

Construction of the $50 million initial phase is slated to begin in May. Keith Ulstad, senior vice president of retail investment and development for United Properties, said in a Friday phone interview that the companies hope to complete the first phase in late summer of 2012.

The three-acre development will be located at the intersection of Penn Avenue and American Boulevard in Bloomington, residing on a site formerly occupied by car dealerships.

United Properties plans to construct a four-story building containing 14,000 square feet of retail space and restaurants, as well as apartments in the upper levels.

StuartCo will build an eight-story apartment building and a four-story townhome building. The residential spaces will together comprise 234 housing units.

The companies said in a news release that the design will allow for future redevelopment in smaller phases-including additional retail and office space.

Ulstad said that the first phase will contain “fast, casual restaurants,” but the second phase will include a sit-down, “destination restaurant”-and the company is currently in discussions with potential tenants.

When asked if United Properties has a timeline for the second development phase, Ulstad said, “It's our preference to roll right from phase one to phase two.”

United Properties has been planning the project for nearly five years, and it credits the work of the City of Bloomington's Housing and Redevelopment Authority for helping move the project forward.

Ryan Dunlay, vice president of development for StuartCo, said in a statement that the company is confident that the site's proximity to major freeways, retailers, the airport, and several large employers will help attract a diverse pool of tenants.

“Our vision is to develop a product that fits the lifestyle of this location with a full amenity package to include rooftop deck, state-of-the-art fitness center, outdoor pool, movie theater, and unique floor plans,” Dunlay added.