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"There's no place like this place… anyplace." That's one of the many slogans hand-painted on the facades of Honest Ed's; and the plans to redevelop the discount store, and the adjacent group of buildings called Mirvish Village, will live up to that slogan in ways Ed Mirvish wouldn't have expected.

On Tuesday night, the developer that owns the 1.8-hectare downtown Toronto site, Westbank, and its architect, Vancouver's Gregory Henriquez, presented their plans at a public open house. While the project's design is in flux, the plans include several surprises: 1,000 rental apartments, many of them family-sized, and no condominiums for sale; a permanent public market; and retail space largely divided into small units that mimic the scale of existing storefronts on Bloor Street.

The proposal builds on the promises the design team made last fall. It would bring to Toronto a new and complex brand of urbanism, raising the standards on many fronts, from heritage to sustainability to cycling and, crucially, urban design.

The Lennox Street facade - with different facade designs, and the entrance to “Honest Ed’s Alley."

Not every Torontonian will be happy. At one million square feet, the redevelopment will be hefty; it will remake a central corner. And it will replace Honest Ed’s. Generations of immigrants were welcomed to Canada by the Mirvish family’s big-hearted hustle, and the store – with its corny signs, crooked floors and Vegas-style lights – is one of Toronto’s few beloved places.

It is also shabby, and fading as a business. But its replacement, designed by Mr. Henriquez’s office with Toronto landscape architect Janet Rosenberg, will be more than worthy. On Monday, Mr. Henriquez and Ms. Rosenberg gave a preview of the initial plans with an obvious sense of excitement. “What we’re trying to do is dig down,” Ms. Rosenberg said, “and find out what is special about it, and reinforce those qualities.”

That means renewing Mirvish Village as a cultural and dining destination, and the sense of Honest Ed’s as “a bazaar,” as Mr. Henriquez says.

The proposed Bathurst Street facade.

The project, which has not yet been submitted to the city for approval, would raze Honest Ed’s. Mr. Henriquez’s office has designed new buildings that form solid street walls along Bloor and Bathurst and along Lennox Street to the south. They would incorporate three towers of 29, 22 and 21 storeys. Behind them would be a low, glass-roofed Mirvish Village Market (selling food and crafts). To the south, two pedestrian-only laneways would cut the block, lined with small retail and live-work spaces filled with the help of the Centre for Social Innovation.

The promise of about 1,000 rental apartments is dramatic news. Developers have recently begun building rentals in Toronto again. According to a report from the Canada Mortgage and Housing Corp, about 1,100 were built in the region from 2013 to 2014. This would add 1,000 in one place – and Westbank promises half will be two-, three- or four-bedroom units.

The plan would leave intact most of the houses and small commercial buildings on Markham Street. These would become destination restaurants, expanded discreetly and served by a bike valet service that connects to an underground bicycle shop and service area. Ms. Rosenberg imagines Markham Street with one consistent swath of paving, integrating the road and sidewalk and with an 11-metre space for patios. (Her firm has three ideas for what it would look like, including one inspired by the crooked floors of Honest Ed’s and the colour-field painting David Mirvish showed at his gallery on Markham Street in the 1970s.)

The street surface and public realm would get new paving and landscaping, by Janet Rosenberg and Associates, that integrates the street and sidewalks.

The main, large buildings have an unusual design – a response, Mr. Henriquez says, to local feedback and plans that stress the importance of “fine-grained” retail. His scheme divides up the space into components of 5,000 to 7,000 square feet, each separated from the others by a small gap, and containing a storefront capped by three to six floors of apartments. Mr. Henriquez’s firm borrowed these forms from New York’s Flatiron District, where buildings on house lots, some short, some towering, create dense but interesting blocks.

While these buildings would be linked, they would have separate floor plates, and a variety of materials, window treatments and sunshades on the facades. “Instead of it being a homogenous big box with things emerging from it,” Mr. Henriquez says, “there are 40 small buildings that are much more intimate.” The goal, he said, is to break up the monotony of large-scale development. In drawings, it has an improbable vitality and variety, aided by signs hanging off the facades in a manner that nods to the Honest Ed’s sign shop, but looks more like Shinjuku in Tokyo.

The 200,000 square feet of retail space would have a careful mix of tenants, and would spill upward onto the second floor, and down into the first underground level. This, the architect suggests, would allow “organic expansion” as retailers could grow or move into a wide range of spaces.

A view from the south of the planned complex, with a series of small “buildings” - actually components of the same larger structure - facing onto Lennox Street

As Mr. Henriquez explained some of those features, Ms. Rosenberg interjected dryly: “This isn’t the usual conversation we hear around developments here.” Planning in Toronto is generally a site-by-site negotiation, with developers pushing to build as much space as possible – these days, mostly profitable and easily saleable small condos – and then walk away. Nearby in the Annex, a new condo proposal would fill most of its lot with a 42-storey tower.

For Mirvish Village, planning negotiations are expected to generate significant community benefits, possibly including affordable housing. Westbank and its principal, Ian Gillespie, have already agreed to a daycare, a significant public art component created in collaboration with the Art Gallery of Ontario, and an ecological agenda. Westbank is shooting for a Platinum certification from the LEED sustainability-rating system.

All that makes financial when a developer is taking a long-term approach. Mr. Gillespie was not speaking to the media this week, but his company plans to retain the complex, Mr. Henriquez says. “This is an asset he’ll own for a very long time.”

The proposed Bloor Street facade. Henriquez Partners Architects imagine this streetwall defined by small components that mimic the scale and diversity of adjacent storefronts.

And it will, on the whole, serve the city’s interests as well as his own. Mr. Henriquez and Mr. Gillespie have done this sort of mixed-use building in Vancouver, and in the ongoing intensification of central Toronto, similar projects will be needed. Westbank has the opportunity to set a good example and seems to be doing so: this project would feel like it belongs in the city.