NEW MILFORD — A mix of affordable housing and retail could be coming to the site behind Big Y now that the town has a potential buyer for the Peagler Hill property.

A developer wants to buy the town-owned property for $1.6 million, which makes up the back 19 acres of the Still Meadow property. The Town Council recently approved a letter of intent for the sale.

The developers are also negotiating a contract with the owners of the front 21.65-acre Fort Hill piece and have signed a similar letter with those sellers.

The plan is to place retail in the front parcel and about 100 apartments on 9 acres on the back piece. The apartments will be a mix of one- and two-bedroom layouts with a portion classified as affordable housing. There will also be a clubhouse, pool and walking trails.

“It will be desirable for the retail tenants as well, particularly because it will have a built-in market nearby,” said Hal Kurfehs, vice president of Coldwell Banker Commercial Scalzo Group in Bethel. He is representing the developer for the project.

This isn’t the first attempt to develop the property. Councilman Mike Nahom and his father proposed a hotel/conference center, banquet hall, retail shops, offices and some apartments over the shops for the site about 10 years ago.

Residents voted down the $2.7 million proposal for the town property, forcing them to withdraw their plan for the whole site.

Nahom applauded the concept of this project, though.

“I think it’s a great idea and I thought it was a great idea when my dad and I proposed it,” he said.

There is expected to be 85,000 to 100,000 square feet of retail centered around a 65,000-square-foot anchor store. Kurfehs said he has a commitment from that retailer but is not authorized to reveal its identity.

He expects the completed project to generate $55 million to $60 million for the town.

“It’s great income to the town,” Kurfehs said. “It will be a big impact.”

Councilman Doug Skelly is hesitant to accept these projections, based on how the Litchfield Crossings complex didn’t attract as many tenants as was expected due to the recession.

“I understand you have a commitment but until I see something put up, I’m always going to be reserved,” he said. “You never know what tomorrow will bring or what will happen like in 2008.”

The council didn’t have concerns about the residential piece, but some questioned elements of the preliminary design, such as access points to the retail part, and then into the residential area.

Councilman Peter Mullen said he would like the neighboring Town View Drive to remain blocked off to preserve the cul de sac there.

“If that were opened up, it would destroy that nice, little neighborhood," Mullen said.

The sale of the land would still have to be approved by residents and the project as a whole still needs to be designed and then go through the town’s approval process. Kurfehs said he’s eager for that to begin.

“We’d like to move as fast as possible of course,” he said. “It’s a good economy now and we’d like to take advantage of it.”; 203-731-3345