A decade after Neptune Beach's Kmart shut its doors for good, city leaders are looking at a fresh plan to fill the 17-acre lot at 500 Atlantic Boulevard: a 150-room hotel paired with a 90,000-square-foot shopping plaza. The proposal, dubbed Town Center West, would finally replace the old big-box store and its sprawling parking lot with something local business owners say the beaches community has been craving for years.
According to First Coast News, Neptune Beach city leaders have reviewed the Town Center West plan, which calls for a three-story hotel and a shopping plaza split into two sections. Belmarmi owner Carmi Canipe Soares told the outlet, “It's time. We need something,” adding that she wants the site to become “something coastal, classy, nice, friendly and family-oriented.” The Kmart building itself opened in 1970 and operated for 46 years before closing permanently in July 2016 as part of nationwide liquidations by the chain's parent company, per WJCT News 89.9.
A Decade of Failed Proposals
Neptune Beach Mayor Cori Bylund said the Kmart redevelopment has been discussed for the last 10 years, the same report notes, underscoring just how long this stretch of Atlantic Boulevard has sat as a half-empty relic. The site has been owned by New York-based TLM Realty Corp. since 1983, when the company bought it for $5.15 million, according to the Jacksonville Daily Record. TLM Realty manages roughly 1.5 million square feet of community shopping centers nationwide, and it has spent years trying to figure out what comes next for this particular parcel.
The first real attempt came in late 2017, when TriBridge Residential and TLM Realty proposed a mixed-use complex with up to 313 apartment units and 10,000 square feet of retail, sparking strong pushback from residents worried about traffic and overdevelopment in the small coastal city. That plan died in August 2018, when the Neptune Beach City Council voted 6-0 to deny the special zoning exception, upholding a unanimous rejection from the Community Development Board after hundreds of residents turned out to oppose it, as reported by Action News Jax.
From Apartments to Hotels and Retail
Developers pivoted the following year, unveiling a concept called Saltwater Row in September 2019 that proposed 30,000 square feet of retail and nearly 200 hotel rooms across two buildings while dropping residential units entirely. That earlier plan called for razing the entire 84,900-square-foot Kmart building, according to News4JAX. The shift away from apartments became permanent in March 2021, when the Neptune Beach City Council voted 4-0 to strip all references permitting residential development from commercial zones out of its draft Comprehensive Vision Plan, a change driven by public opposition voiced during community vision workshops.
That vote effectively closed the door on any future housing at the site and locked developers into a commercial-only path. Engineering evaluations later found that Neptune Beach's municipal water system lacked adequate volume and pressure to meet fire safety codes for a major hotel, prompting the city to negotiate with neighboring Atlantic Beach over extending water main lines to serve the property, per city records.
Parking Math Still Doesn't Add Up
Town Center West's current layout includes 140 parking spaces on the north side of the property and 138 on the south side, plus 100 spaces provided by neighboring Publix, for roughly 400 spaces total. But the project technically needs 463 spaces to meet code, leaving a shortfall of 63 spots. City officials and developers have floated off-site parking, shared off-peak spaces and valet service as possible fixes, though none of those arrangements has been finalized.
The shopping plaza sits on the same parcel as the existing Neptune Beach Plaza, which now anchors Publix and Bealls after TLM Realty's commercial updates; that strip center previously housed a Lucky's Market location until the grocer closed in 2020. Mayor Bylund has said community members must provide input before the plan is finalized, and city officials have made clear that further discussion is needed before Town Center West can come to fruition.
What's Next on the Calendar
A City Manager report issued in July listed a Development Order review for the 500 Atlantic Boulevard site on the Neptune Beach Community Development Board's agenda for September 9, a required step before construction permits can be issued. Developers plan to go before the board again in October, with the full plan potentially reaching the Neptune Beach City Council in November.
The proposal also arrives amid a broader wave of hospitality investment along the Beaches Town Center corridor, including Jacksonville Jaguars owner Shad Khan's firm acquiring the nearby Seahorse Oceanfront Inn and Lemon Bar for luxury resort redevelopment, while Atlantic Beach is separately converting the former One Ocean Resort into the Dune House Hotel. Whether Town Center West can clear its remaining hurdles — water infrastructure, parking, and a city council that has rejected big plans for this lot before — remains an open question heading into the fall hearings.
