Washington D.C. Mayor Adrian Fenty joined other city officials and community members to break ground Sept. 1 on a long-awaited 1 million square foot development expected to bring vital commercial, hotel and housing space to the O Street Market area of D.C.’s historic Shaw community.

Fenty has described Shaw as one of the city’s most revered neighborhoods and said his administration has designated $35 million in tax increment financing, using future tax revenue to finance current improvements, and $2.5 million in predevelopment funds for the project. Fenty said the city “is committed to investing in development that extends economic opportunities into our most cherished neighborhoods.”

The City Market was first constructed in 1881. The reconstruction project will provide up to 390 full-time jobs as well as about 500 construction jobs, and will include more than 87,000 square feet of retail and restaurant space. In addition to a new Giant Food store, the project will offer more than 600 units of residential and affordable housing.

The first phase of construction is slated for completion in 2013.

Deputy Mayor Valerie Santos said the project represents true collaboration between the community and the public and private sectors.

“The creation of a great new grocery store as part of this exciting mixed-use development demonstrates the District’s commitment to increasing resident access to quality retail across all of our neighborhoods,” Santos said.