LOUISVILLE - An incentive package that could be worth close to $1 million has been approved by the Louisville City Council to lure an Alfalfa's Market grocery store to a long-vacant space once occupied by a Safeway.

Tuesday night's unanimous council vote would give Alfalfa's a full rebate of whatever sales-tax revenue it generates in its first three years of operation, up to $800,000. The natural-foods grocer, which would move into a 22,000-square-foot space at 707 E. South Boulder Road, also would get a 50 percent rebate of Louisville use taxes and permit fees.

The incentive package could amount to $1 million, according to Aaron DeJong, Louisville economic development director. It also contains provisions that would protect Louisville's investment by requiring Alfalfa's to pay the city back if its store closes before the three years are up.

Louisville planners estimate that the store would bring 100 full- and part-time jobs to the city and generate about $3 million in sales-tax revenue in its first decade of operation.

The Village Square shopping center in which Alfalfa's would open its $3.4 million store has been in decline since Safeway closed in May 2010. In March, Louisville's planning commission recommended that the city reject a redevelopment project for the site proposed by Boulder-based Loftus Development Inc. that would have converted the Safeway space into a mixed-use development with 180 apartments and 10,000 square feet of retail space.

Residents from the surrounding neighborhood organized a vigorous effort to oppose the development, and in June the City Council agreed.

In September, however, Loftus Development chief executive Jim Loftus submitted another plan to the city, this time proposing an apartment complex that is not quite as residentially dense as his initial plan - 110 to 120 units - plus the Alfalfa's store. Alfalfa's this summer had received more than 500 letters from residents asking that the natural-foods grocer fill the Safeway space. Mark Retzloff, president and co-founder of Alfalfa's Market, had said he planned to open a second store somewhere along the Front Range by late 2013.

Alfalfa's began in 1983 and grew to 11 stores before the chain's owners sold to Wild Oats markets in 1996. Wild Oats then was bought by Whole Foods Market Inc. (Nasdaq: WFMI) in 2007. In 2010, A-M Holdings LLC, which included Retzloff and another original Alfalfa's founder, Barney Fineblum, bought back a store located at 1651 Broadway in Boulder and reopened it as Alfalfa's in April 2011.

Loftus' revised mixed-use project still must gain city approval. The Louisville Planning Commission is expected to review the proposal at its meeting Oct. 25.