A Lawrence development group wants to redevelop 179 acres of vacant Farmland Industries property into homes, industrial sites and a commercial center that could include a grocery store for the east side of Lawrence.

Farmland Industries tentatively has accepted a bid of $5 million from a group led by Lawrence developers Doug Compton and Bill Newsome. The property, which now is undeveloped land zoned primarily for agricultural use, is on the south side of Kansas Highway 10 near O’Connell Road. It is directly across the highway from Farmland’s shut-down nitrogen fertilizer plant.

The deal is tentative because, as part of Farmland’s bankruptcy process, the property must be sold at public auction. The $5 million offer by the Lawrence group will serve as the opening bid. No auction date has been set yet.

Newsome said the group, Eastside Acquisitions L.L.C., became interested in the property because it offered a large parcel of land in the growth path of the city — something that rarely became available.

“We think it is a very well positioned piece of land,” Newsome said.

Newsome said preliminary ideas for the property would include a mix of duplexes and single-family homes, along with some industrial lots that would have frontage on the highway. Newsome also expects a significant amount of commercial and retail space for the property.

He said specific numbers on how the property would be split up between residential, industrial and commercial uses were not yet available.

The commercial space could fill a variety of uses, including the potential to house an often-talked-about east side grocery store.

“Certainly a grocery store is a use that we think would be very workable out there,” Newsome said. “We think there is a real need for something like that on the east side of town. There’s been a lot of rooftops built out there.”

Before any large-scale development could begin, the property would have to be annexed into the city and the plan would have to receive approval from the City Commission.

Members of the Lawrence-Douglas County planning staff also have said that major improvements to O’Connell Road would have to be completed.

Newsome said he hoped his group could complete the deal within the next 60 to 120 days.