ON a 21-acre property along Main Street here, where Thomas Edison once presided over his Invention Factory and Commerce Center, Mayor John McKeon indulged in a little ribbing of a developer who will reinvent the site as a residential and retail project.

"Gee, Ed," the mayor said to Edwin H. Cohen of Prism Capital Partners, "you paid, what, about $45 million for this?" Mr. McKeon gestured at a collection of concrete buildings pocked with missing chunks of facade and broken windows. "What a deal," he said, rolling his eyes and chortling.

Mr. Cohen laughed genially right along with him. "Hey, you're on the hook for this, too," the developer said.

The $230 million Edison Village redevelopment project is a public-private undertaking, proceeding under the town's plan and tied to a $52 million bond sale and an agreement that the developer would be making payments in lieu of taxes.

Work will begin this week on the first phase of Edison Village, which ultimately is to have about 620 residences. They will be created by converting a huge old structure that closed in 1965 as a battery factory and has served as a home to dozens of small businesses since then; demolishing two smaller structures; and building a parking garage with town homes around its exterior walls. In addition, 18,000 square feet of shops will be built along Main Street and around the corner on Charles Street.

The 95-year-old four-story battery factory is to be renovated and rebuilt into loft condominiums. It will get a new top floor with 28 two-bedroom penthouse units with dens, glassed-in terraces and patio space.

Residents of the lofts and town homes - and of the condo apartments that are to be built in the project's second phase - will have access to a community fitness center, an outdoor pool, personal storage and doorman service, said Eugene R. Diaz, who is Mr. Cohen's partner at Prism, based in Englewood, N.J.

Prices have not yet been set for the 316 condos to be created in the first phase of construction, Mr. Diaz said. But a sales office will open at the site by the end of the year, marketing units ranging in size from 700-foot studios to the 2,300-square-foot penthouses. The first units should be available for occupancy by the fall of 2009, Mr. Diaz said.

The developers expect that the entire first phase, which will also include the Shoppes at Edison Village, the 630-space garage and parks and open space, should be finished by the end of 2010.

It has taken a decade to get to this point, Mr. McKeon said. He recalled the initial hearings on whether to create a redevelopment area in the southeastern corner of town as the most emotional public sessions he had ever witnessed. The proposal involved a parcel bordered variously by streets of modest two-family homes, the historic gated Llewellyn Park neighborhood, the town boundary with the city of Orange and several salvage yards.

"People were concerned that this part of town would be overwhelmed - that it would be obliterated," said Mr. McKeon, who was elected mayor in 1998 shortly before the hearings. The mayor previously served as a council member, and since 2002, he has also been a state assemblyman.

Several developers who were interested in the project at the start envisioned clearing out 40 acres for redevelopment, which would have wiped out hundreds of homes, Mr. McKeon said.

West Orange has few stores and restaurants along its Main Street, and prospective developers proposed creating a new downtown heavily weighted toward retailing.

In 2001, Prism, which had been newly formed by Mr. Cohen and Mr. Diaz, two veteran developers, entered the picture with a vision of a mixed-use community. It proposed to recycle the Edison factory - which is listed on the National Register of Historic Places - as distinctive apartments with an industrial flavor. The lofts are to have 14- to 16-foot ceilings and 10-foot-tall windows.

Mr. Cohen said historic regulations requires that original window dimensions and framing be precisely reproduced. Also, he said, 44 percent of the exterior concrete requires repair, and Prism has had a team of experts working for almost a year on issues related to doing the work with historical accuracy.

Prism has secured a number of historical artifacts that will be reused here. An antique Victrola produced in one of the Edison factories here occupies a corner of the Prism office in Englewood, for instance. But it will be moved back to Edison Village, probably as a lobby ornament - and possibly a source of background music, since some original recordings survived with the record player, the developers said.

Mr. Cohen said Prism paid the former owner of the property "a very handsome price" - he did not contradict the mayor's guess of $45 million - because the factory building is integral to creating a vital new neighborhood.

"We see the opportunity here to do something really great," said his partner, Mr. Diaz, "to go into an area that has been neglected so long and create a tremendously exciting downtown with attractive new residences, plus a retail area that will generate an expected $10 million in spending per year."

He continued, "These opportunities don't come along but once in a very long while."

When fully realized, the development will also be unusual just for its size. The developers describe the project as the largest "adaptive reuse" effort taking place in New Jersey except for certain projects in towns on the west side of the Hudson River.