A long-vacant Winn-Dixie grocery store near downtown Sarasota is set for a major transformation after the Sarasota City Commission approved plans to redevelop the property into a mixed-use project featuring a 145-room hotel, 91 apartments and retail space.

The redevelopment will take place at Midtown Plaza along South Tamiami Trail (U.S. 41), just south of downtown Sarasota and near Sarasota Memorial Hospital.

The approval marks a significant step toward revitalizing a commercial property that has remained vacant since 2019.

Former Winn-Dixie to Be Demolished for Mixed-Use Development

The redevelopment will encompass approximately 3.32 acres within the southern portion of Midtown Plaza, located between Bahia Vista Street and Prospect Street.

The existing 45,869-square-foot former Winn-Dixie building will be demolished to accommodate the new development.

Plans include:

• 145-room hotel serving visitors, business travelers and the surrounding medical district.
• 91 residential apartments, including 23 attainable housing units.
• New retail and commercial space within the mixed-use development.
• 231 parking spaces across a two-level parking structure and surface parking.
• Improved site access, landscaping and pedestrian infrastructure.

The redevelopment will introduce a combination of residential, hospitality and commercial uses to a prominent stretch of South Tamiami Trail.

Sarasota City Commission Reverses Earlier Denial

The project received approval from the Sarasota City Commission on October 19, 2026, following a 3-2 vote.

The decision reversed a September 9 denial by the city’s Planning Board, which had rejected the proposal despite its compliance with applicable development requirements.

During the approval process, commissioners and nearby residents raised concerns regarding pedestrian safety, sidewalk widths, traffic circulation and the location of a proposed trash compactor.

Representatives of the development team maintained that the project met city development standards and represented a substantial improvement over the vacant grocery store and underutilized parking area.

The development team also agreed to adjust the hotel’s placement to accommodate a wider sidewalk along Prospect Street while protecting existing mature trees.

With the commission’s approval, the project can move forward through the remaining development and permitting process.

Proximity to Sarasota Memorial Hospital Supports Development

One of the property’s primary advantages is its location near Sarasota Memorial Hospital, one of the region’s major healthcare and employment centers.

The proposed hotel could accommodate patients’ families, visiting medical professionals and other travelers seeking convenient access to the hospital.

Meanwhile, the residential component is intended to provide housing opportunities for healthcare workers, first responders and other local employees.

Of the 91 apartments, 23 are planned as attainable housing units.

The combination of residential and hospitality uses is designed to support the surrounding neighborhood while increasing activity along the South Tamiami Trail corridor.

What the Redevelopment Means for Sarasota Commercial Real Estate

The approval highlights a growing trend in Florida commercial real estate: repositioning aging or vacant retail properties into higher-density mixed-use developments.

Former grocery stores and shopping centers can offer attractive redevelopment opportunities because they often feature established roadway access, utility infrastructure and proximity to surrounding residential neighborhoods.

For investors and developers, the Midtown Plaza project demonstrates how underutilized commercial properties can be transformed into developments that incorporate multiple revenue-generating uses.

The addition of 91 apartments and a 145-room hotel could also increase demand for nearby restaurants, medical services, convenience retail and other neighborhood-serving businesses.

The redevelopment further illustrates the importance of Sarasota’s South Tamiami Trail corridor, where proximity to downtown, healthcare facilities and established neighborhoods continues to attract development interest.

Looking Ahead

With city approval secured, the Midtown Plaza redevelopment is positioned to advance toward demolition, permitting and eventual construction.

An official construction start date and project completion timeline have not yet been announced.

Once completed, the development would replace a vacant grocery store with a new residential, hospitality and retail destination near downtown Sarasota.

The project represents another example of how aging commercial properties throughout Southwest Florida are being repositioned to accommodate changing market demand.

For more updates on Florida commercial real estate, retail redevelopment and major construction projects, visit ExtendedReach USA.