MIAMI—The $40.8 million redevelopment of Palm Harbor is underway. Atlanta's Branch Properties just started phase one construction on a development that's set to transform the 28.7-acre lot into a high-quality shopping experience called Island Walk in Palm Coast, FL.

Once completed in 2016, the new retail destination promises new and expanded tenants and amenities. It's all part of a move to effort to revitalize the city's original core. Branch, in conjunction with Michael Collard Properties, acquired the 28.7-acre site last year 16 from Chicago-based Inland Real Estate Group.

“Island Walk is the catalyst that will re-infuse this corridor with the energy originally ignited in the '70s,” says Nick Telesca, president of Branch Properties. “Once completed, Island Walk will once again be a popular destination with household names in retail—many that are not currently in the market—and casual dining.”

Branch started construction last November, demolishing buildings that sat west of an existing Publix Super Markets and the eastern portion of the central shops. Phase I of Island Walk includes the majority of small shop tenants and is set to come online in Spring 2015.

Phase II will bring a new Publix and more small shop space by Fall 2015. The final phase to the east of the new Publix is expected to be complete by mid-2016.

As part of the expansion, Publix signed a lease for a new 53,785-square foot store, approximately 20% larger than its existing one with a new location west of the existing store. Other existing tenants that will continue in the retail center include Starbucks, The UPS Store, Eyeglass Express, Coast Dental & Orthodontics, and Salsa's Mexican Restaurant.

“The redevelopment of Palm Harbor is an opportunity to restore the vibrancy and energy of this site that is such an important part of Palm Coast's history,” says Telesca.  “Our deep roots in the Southeast and extensive experience in Florida, coupled with our strong capital base, enable us to bring value and needed amenities to the Palm Coast community.”