The developer calls Malvern "the town that time forgot" - its main street lined with Victorian-style houses, small boutiques, and local watering holes like the Flying Pig Saloon.

But Eli Kahn and his partners are betting that a $45 million apartment and retail complex on East King Street will help satisfy urban appetites in one of the region's most venerable suburbs - and entice empty nesters and young professionals looking for a citified environment outside the city.

Construction on the East King Street redevelopment project began in June and includes two large apartment buildings with 190 units, plus first-floor retail space that Kahn envisions renting to restaurants, coffee shops, and boutiques. The complex, due for completion in August, also is to house a Whole Foods grocery.

Kahn and his partner, David Della Porta, spent several years buying 11 parcels on the site, and the project has been a decade in the making. A house on one small parcel remains because an elderly resident didn't want to leave her home and declined to sell, Kahn said.

Kahn said developments such as his - projects that emphasize urbanization over suburban sprawl - could be the wave of the future in the region.

"We saw this massive suburban shift that lasted 50 or 60 years, and now people are moving back into the city," he said. "But there are lots of people who've grown up in the suburbs who are uncomfortable to move into Philadelphia. It's easier to go to a suburban borough that has that urban vibe."

Gary Smith, president of the Chester County Economic Development Council, said projects like the King Street development were slowly taking hold in Chester County. Unionville plans a similar "urban center" development, and Kahn is working on a King Street-style apartment complex near downtown West Chester that also caters to young professionals.

The King Street project is two blocks from the Malvern SEPTA station and close to restaurants and bars.

"Instead of going out and buying green fields, people are building close to public transportation. And Malvern is one of the few places in Chester County that has public transportation," he said.

Borough officials said that at first, the project was met with reservations from residents but that overall they had been supportive.

"People were initially concerned about traffic, but generally, the community was very responsive to having this come in," Borough Manager Sandra Kelley said.

Malvern, Kahn says, is surrounded by tremendous amounts of development but hasn't had much itself. And though in towns around Malvern, taxable values have skyrocketed in the last several years, Malvern's have stagnated.

From 2005 to 2010, the total taxable assessed value in Malvern increased just 2 percent, from $202.1 million to $206.7 million, according to State Tax Equalization Board figures. The assessed value in the three other towns in Malvern's school district jumped 30 percent, from $30.2 billion to $39.2 billion in that same period.

The development sits on the site of two large industrial buildings that dominated King Street for nearly 60 years.

Smith said the project had received state and federal grants through the economic-development council.

Kahn expects to move tenants into the first of two apartment buildings on the King Street site in August. About 30 tenants have already signed on, he said, and both buildings will feature luxury amenities such as a swimming pool, fitness center, and movie room. Apartments will rent for about $1,180 a month, depending on size.

Out of the town's 2,998 residents, about a third live in rented properties, according to U.S. Census data.

On Thursday, Kahn sidestepped mud puddles and several employees in hard hats as the wind whipped around the corner of the almost-completed apartment complex. Construction was slightly behind schedule because of a cold snap followed by windy weather, but Kahn was optimistic.

"This has been a 10-year journey," he said. "It's incredibly satisfying, to add to a little town like Malvern. It's exciting."