Once the site of a proposed $20 million project that was to include new condominiums, a key downtown tract near the Tennessee Aquarium will become a parking lot.

The parcel at First and Market streets had been targeted for up to 25 residential condominiums, a parking garage and the Regional History Museum last decade.

But Chattanooga businessman Greg Vital said that since the economy slowed down, plans are now to put in a 40-space surface lot and hold the land for later.

"We're waiting for the right thing," said the general partner of the property's ownership group. "It's land banking the site until a higher and better use comes into place."

Vital said his group is working with Republic Parking, which will operate the lot for general parking purposes.

He said more parking is needed in the central city, and the site will be landscaped and dressed up.

"It will be first come, first serve," Vital said about the parking.

Vital put the cost to remake the parcel into a parking lot at 'a couple hundred thousand dollars." No public or River City Co. money is being used, he said.

Kim White, the River City Co.'s chief, said downtown needs the extra parking, but there is a higher and better ultimate use for the land.

"Right now, new development is tough," she said. "It will look better than the hole that was there."

In 2007, with an eye on future development, Vital's group tore down a vacant brick building that had stood on the corner. At that time, new condos had been built in the riverfront area and more were planned. Also, the Regional History Museum was looking at selling its old location at Fourth and Chestnut streets and relocating.

However, after the economy collapsed in the Great Recession in 2008, the lot sat vacant. The Chattanooga History Center is now under construction inside the former Chattanooga Convention and Visitors Bureau space next to the Aquarium.

The building on the First and Market site, Vital said, had held Crown Laundry before it became a warehouse.