In August, the owner of Alexandria’s Bittersweet Cafe will open the first new business on the city’s waterfront since contentious local debate about how to redevelop the Potomac River shore erupted in 2011.

Waterfront Market, a gourmet grocery and cafe with indoor and outdoor dining, will take over the space at the foot of King Street occupied by the Old Historic Alexandria Museum Store, near the Torpedo Factory Art Center. The market will include a full-service bakery and sell wine and beer. Of its 150 seats, 74 will be outdoors; officials hope it will bring new energy to the moribund boardwalk area on the water.

“I think it’s going to be a game-changer,” said owner Jody Manor, a native Alexandrian who’s been in business in the area for 30 years. “I’m very interested in the economic vitality of the city.”

On Saturday, Manor received a special-use permit from the City Council for the restaurant. Manor, who is on the city’s waterfront committee, defended the $11,800 annual license fee proposed by city staff members. (When the special-use permit expires, in three years, the license fee will increase to $12,286.)

Vice Mayor Allison Silberberg, who repeatedly said she supported the opening of the Waterfront Market, asked whether the license fee was high enough.

Opening the business is “a risk,” Manor said. “It’s a big space, and there’s a reason it hasn’t been leased for 10 years.”

The market’s outdoor tables, which will be tucked behind the Chart House restaurant in what is arguably one of the city’s most high-profile locations, will replace a collection of failed fast-food franchises. The Torpedo Factory’s half-million annual visitors currently have limited food and drink choices in the immediate area.