Alexandria is poised to get a 120-room hotel with a restaurant along the Potomac River after the City Council on Saturday approved the first major redevelopment since the controversial waterfront plan was passed two years ago.

The five-story hotel, being developed by Carr Hospitality, will be built at Union and Duke streets where the Art League of Alexandria currently occupies a one-story warehouse. The development, which has been under discussion for three years, will bring the city an estimated $750,000 in annual property taxes, up from the current $42,000, officials said.

City leaders said they were intent on getting a high-quality hotel on the property to set the tone for other development that may follow. The city’s waterfront plan allows two “boutique” hotels of up to 150 rooms each along the eight-block Old Town-area waterfront.

It’s unclear when construction might begin. The project now goes back to the city’s board of architectural review for fine-tuning the facade.

The council’s unanimous approval of Carr Hospitality’s proposal came after about four hours of discussion in which business people supported the project and neighbors objected that it was too big and would clog the already crowded streets of Old Town. The hotel will include 69 underground parking spots, and valets would ferry any overflow to a nearby garage. Plans call for a loading dock next to the front entrance on Duke Street, which means the hotel staff would have added incentive to keep the area clean, the hotel’s attorney Ken Wire said.

“For anyone walking along the street, it will look like it was built 100 years ago and will be a quality building for 100 years to come,” he said.

Many of the people who objected to the hotel were the same people who tried to stop the waterfront rezoning two years ago, and they raised some of the same criticisms. Bert Ely, a leader of Friends of the Alexandria Waterfront, urged the council to defer its vote, saying the project is “simply too massive in size and scale relative to nearby existing buildings.”

Attorneys for some residents have told the city that they plan to appeal a court order that dismissed their lawsuit over the rezoning vote. City attorney James L. Banks said that challenge is similar to other legal cases the city has won and he did not expect “a substantially different result.”

City Council members dove deep into the details of the proposed hotel Saturday, negotiating shorter hours for the loading dock, the color of the bricks and the lighting of the public plaza that will be built off a public alley that will run from Union Street to a portion of the waterfront street called the Strand.

“I know it’s tedious to go through this, but in terms of setting a precedent, if we don’t set it here, it won’t be done,” said council member Paul Smedberg (D).

Carr Hospitality, which operates the Willard Hotel in Washington and the InterContinental Crowne Plaza in Alexandria, will be required to pay a $675,000 fee that will finance putting utilities underground, demolishing two nearby buildings and re-grading the Strand.

The developer will also make a city-required contribution of $111,552 to the city’s affordable housing fund. Austin Flajser, president of Carr Hospitality, said his firm is “very pleased to develop another high-class property in Alexandria.”

The redevelopment of Alexandria’s waterfront has seen progress since the City Council first approved it in January 2012.

A new Waterfront Cafe restaurant and market has opened and a large restaurant called Blackwall Hitch is proposed to take over the dormant food court outside the Torpedo Factory. The city is negotiating with the Old Dominion Boat Club over the future of its parking lot at the foot of King Street.

The other hotel planned for the area is likely to be built at Robinson Terminal North by CityInterests and Armada Hoffler, which bought the warehouse from the Washington Post Co. in September. Robinson Terminal South was sold at the same time, but purchasers JBG and EYA have yet to say what they will do with the property.