While the MTA mulls the city’s $500 million offer for development rights to the 26-acre Hudson rail yards, it is moving ahead with plans to transform a tiny fruit stand on Houston Street into a more permanent fixture.

The Landmarks Preservation Commission will hear a proposal today from the MTA and the owner of the “Honest Boy” fruit stand at the corner of Broadway and Houston in SoHo, Pan Gi Lee, to allow the construction of a two-story glass, steel, and aluminum building. The new structure, which would incorporate one of the entrances to the Broadway and Lafayette subway station, has been submitted to the commission for an advisory opinion because it would sit within the SoHo cast iron historic district.

For decades, and through several successive operators, the triangular corner site has housed a fruit stand that has served as an “urban orchard,” the project architect, Tobias Guggenheimer, said.

The MTA owns the land — about 1,000 square feet — and leases it to Mr. Lee. The agency has encouraged the proprietor to fix up the place, according to Mr. Guggenheimer and a source at the MTA.

In the last decade, the corner has exploded with foot and vehicular traffic, as well as billboards that now line the brick facades around one of the busiest shopping corners in the city.

In the mid-1980s, before SoHo transformed, community groups saved the previous operators, Louis and Carmen Arenas, from eviction. In 1992, following community protests, the MTA backed away from plans to clear the stand to erect an electrical substation. In 2000, the agency wanted to expand its parking lot and storage facility immediately to the east, threatening to squeeze out the fruit stand.

Just more than a year ago, Mr. Arenas became ill and transferred the lease to Mr. Lee, who operates several stores in Manhattan. Mr. Arenas is said to have paid $200 a month for the site.A source at the MTA would not say how much the current tenant pays, but he said it is “not significant.”

With the neighborhood exploding with shoppers and luxury, glass-encased apartments and boutique hotels, some locals said they would miss the old rickety stand. The proposed contemporary design contains several copper-tinted, tree-like forms at the roof level and a series of steel columns to mimic some of the surrounding architecture. The second floor would be used for storage.

The director of the SoHo Alliance, Sean Sweeney, called the proposed design “absurd,” and said he is worried the stand would evolve into something more.

“It will be a coffee scene. All the cool people are going to go in there and it will lose its charm,” Mr. Sweeney said.

Yesterday, the local Community Board 2 submitted a request to the Landmarks Commission that the proposal be denied and “something better built.”

Mr. Guggenheimer, the architect, said the design is meant to be a local landmark.

“The MTA explicitly encouraged a playful, expressive design. Our solution pays homage to the cast-iron buildings along Broadway by employing an exposed steel structure,” he said.

Today, the Landmarks Commission will review the proposal and give an advisory report to the MTA. Because the stand sits on state-owned land, it does not require the commission’s approval. A spokeswoman for the MTA would not comment on the proposal, saying it is in the review process.