City officials plan to begin requesting bids within the next few months to redevelop the abandoned Winona Hospital site where demolition began Monday.

The neighboring Children’s Museum of Indianapolis will play a key role in the redevelopment, which is expected to include residential, commercial and public space.

Acting as lead developer, the museum will hire a master site planner at about the same time the city sends out a request for proposals for the housing component, which needs to be finished by March 2014 to meet federal guidelines.

The City-County Council in May approved the use of $8 million in federal Neighborhood Stabilization Program funds for several projects, including the demolition of both Winona and blighted Keystone Towers.

On Wednesday, the city received one bid to redevelop the Keystone site—a $22 million proposal from local affordable housing developer The Whitsett Group LLC.

Federal rules require neighborhood stabilization projects to include mixed-income rental housing.

The Children’s Museum owns two key parcels near the Winona property at 3232 N. Meridian St.. One is a grass lot north of 33rd Street, and the other has frontage on Meridian in front of the hospital.

The former hospital site is just north of the museum and has been vacant since 2004. The museum controls a total of 19 acres in the neighborhood.

“It’s exciting,” museum CEO Jeff Patchen said of the hospital’s demolition. “It’s such a shame it’s been unattended for so long, but this is a new beginning. We’re thrilled.”

The city took control of the hospital site last year and has written off about $1 million in tax bills. It requested proposals for redevelopment in February 2010, listing the property at $667,500, but no one responded.

City officials, however, are confident the Winona property will draw interest, Deputy Mayor Michael Huber said.

“I think the presence of the Children’s Museum as the anchor institution, and their investment in the property, will be meaningful,” he said.

Construction of the residential portion of the project likely will start sometime next year, Huber said.

Demolition of the site is expected to take weeks. Indianapolis-based Denney Excavating, which handled the Keystone Towers implosion, also received the contract to raze the Winona building. It submitted a bid of $695,289.