A budget hotel and an Aldi supermarket could be built as part of the regeneration of Tayfen Road, in Bury St Edmunds.
Frontier Estates, which owns most of the land on the 5.3 hectare site, commissioned a masterplan which was presented to St Edmundsbury Borough Council's Bury Area Working Party on Tuesday.
A small supermarket with a hotel above it on the corner of Spring Lane and a water feature at the junction with St Andrew's Street North are among the proposals.
"I think the provision of the budget hotel is very good. I think there is a need for it and that location is ideal," Cllr Nigel Aitkens said at Tuesday's meeting.
Aldi is named as the new supermarket by Frontier Estates in a consultation report, although it says this is subject to planning permission.
The masterplan also includes a gateway building at Osier Road.
This would be for leisure or restaurant use and would serve as an entrance route to a new residential area with 100 new homes.
Rapleys, who drew up the masterplan, say the building would feature 'visionary architecture' and use new materials in an innovative way.
There were some concerns raised by councillors in relation to the number of homes and traffic the scheme would bring but, on the whole, councillors welcomed the plan, which went through public consultation earlier this year.
"It is just wonderful because that side of town is looking particularly shabby," said Cllr Robert Everitt.
"This is going to be a really brilliant development in what everybody is saying is a rather sad quarter of the town," said Cllr Stefan Oliver.
Cllr David Nettleton also supported the scheme, but spoke against having a water feature.
"Particularly on a Saturday night, I think half of the youths of the town will end up in it," he said.
The masterplan keeps Burlingham Mill while the existing tyre and exhaust centre would also to be accommodated.
National Grid, the only other landowner, supports the scheme, which will see the gas holder replaced with a gas pressure reducing station.
The working party voted to recommend that full council, which meets on March 31, adopts the masterplan as planning guidance.
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