AUGUSTA — A public hearing is set for Thursday in Augusta on a proposal to redevelop the old Kmart on Western Avenue.

Developer George Campbell is proposing a $48.5 million project to transform the vacant store and adjoining mini mall into a hotel, retail space and apartments.

He’s asking City Council for a $4.18 million tax break to help with financing for the project.

At a recent council meeting, Campbell said he wants to build a high-quality project but needs help from the city to become reality. The current plaza dates to 1962 and the large former Kmart building has not had a permanent tenant in years.

“Now you do business by creating space, that’s what you try to do as a community,” Campbell said. “When you build housing in particular, which is a keystone of this project, you want to have space with it.”

The project will reconfigure nearly eight acres and proposes 50 apartments, 120 hotel rooms, two retail buildings, a fountain and a walking path to the State House. Campbell is also asking the city for permission to build up to 85 feet high and exceed density limits.

Matt Nazar, director of development services for the city, said the site along the busy Western Avenue corridor has been on the top of his list for redevelopment.

“It’s a tough parcel to redevelop,” he said. “It’s good to see it hopefully moving forward.”

Most council members seemed supportive of the proposal and the request for a tax break. The way the tax increment financing deal is structured, the city is poised to receive $3.7 million in new tax revenue that can be used to make improvements along Western Avenue or for other related economic development initiatives.

“This is going to be a staple in our community for the next generation and probably multiple generations after that,” said Councilor Courtney Gary-Allen. “I am so excited for this project. I think it’s going to be a one-of-a-kind both in the city of Augusta and across the state.”

The public hearing is set for 7 p.m. Thursday in city council chambers.