The City Council indicated Tuesday that a city-owned parking lot downtown could be the site of a long-sought grocery store, with high-density housing built on top.

In a study session on the 1.45-acre lot, located along Bryant Street between Mercy and California streets, a majority of the council supported leasing the land for a private, high-density housing development with retail space on the ground floor. The housing would include a to-be-determined number of below market rate units.

"Downtown residents have wanted a grocery store forever," said council member Ronit Bryant.

The city went through a debate about a grocery store during the design of the nearby five-story parking garage. At that time, downtown residents held a candlelight vigil when the city decided to go with Longs Drugs over a Zanotto's grocery store for the ground floor retail component. Council members said Longs would generate better lease revenue for the city, while Zanotto's wanted a subsidy.

"There was a lot of interest in a grocery store but it was just not economically feasible," said Joan Jenkins, the city's transportation and policy manager.

"There's no question a grocery store was the most popular choice," said council member Laura Macias. "We just didn't have the right grocery store at the time."

Council member Matt Pear said he supported the Asian grocer that already exists downtown, and called on the city to pursue a use for the empty lot that would generate the most lease revenue.

But Mayor Tom Means said, "If a grocery store of some size is willing to come in there, I'm fine with that."

"The city should not be in the business of being a landlord," said one public speaker who identified himself as a developer and owner of an adjacent property at 1046 Mercy Street.

A neighbor who lives in Bryant Street said it wasn't a good place for affordable housing.

"I don't want to see a preponderance of affordable housing downtown," said Council member Nick Galiotto, who added that the city already approved affordable housing downtown on Evelyn and Franklin streets.

Neighbors opposed affordable housing at the site two years ago, but Roy Hayter of Advocates for Affordable Housing pointed out that some residents, and even some council members, thought it was a better site than on Evelyn Avenue.

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