CORRECTION (Published 2/6/2013)
A story about the city of Clayton buying a parcel of downtown land incorrectly reported the parcel was the Pioneer Inn property. The city purchased the parcel directly next to the inn property.

CLAYTON -- The city has purchased the former Pioneer Inn property, giving it control of a key piece of downtown real estate city leaders have wanted reserved for retail development.

The City Council voted 5-0 on Thursday to buy the property at 6055 Main St. for $1 million from the Clayton Community Church, which had planned to build a 500-seat sanctuary and other buildings there

The church's plans to develop the property were halted in 2011 after many residents objected, saying the proposal was a departure from the city's vision to add more businesses in the downtown.

The largely undeveloped property accounts for a significant portion of the city's tiny downtown. City leaders hope it can help bring new sales tax revenue to the city.

"I think it bodes very well for the history of Clayton," said former Mayor Pete Laurence, who opposed the church project. "That's the key to the entire downtown being built up. It's a linchpin piece that has been stymied for years. Now the cloud is lifted."

The church had planned to demolish the Pioneer Inn building to construct four church buildings -- including a 500-seat sanctuary -- spread over 42,000 square feet, as well as nearly 6,000 square feet of retail. The property is zoned for commercial use, so the church project would have required a change in the city's downtown specific plan.

Instead, the church put the property up for sale in June and shortly thereafter began negotiations in closed-session meetings with the city. To pay for the property, the city is using money from its capital improvement fund, which will "severely limit" the city's ability to fund other capital improvement projects, according to Merry Pelletier, the city's finance manager.

But city leaders on Monday said the investment is worth it. Mayor Julie Pierce envisions a project that will bring ground-floor retail with the possibility of housing units and offices upstairs. The close of escrow has been set for March 15, but the city has the right to extend the closing date for up to six months.

"It's a significant parcel," Pierce said. "The continuity it provides can really kick-start what's going on downtown." Pierce said two developers have already expressed interest in the property.

"The ink hasn't even dried yet, and we're pretty excited," said Councilman Howard Geller, who is pushing for a hotel on the parcel.

The purchase comes as Laurence, a real estate broker, has sold property at Center and Diablo streets that will become a two-story commercial development.

Meanwhile, the church has found a different piece of land and is planning to build on 4¿1/2 acres at 1027 Pine Hollow Court, next to Mt. Diablo Elementary School. Shawn Robinson, Clayton Community Church's senior pastor, could not be immediately reached for comment.

David DeBolt covers Concord and Clayton. Contact him at 925-943-8048. Follow him at Twitter.com/daviddebolt.