The proposed 48-unit City Walk subdivision on Fifth Avenue will return to the planning commission at its Jan. 20 meeting after city staff researches potential restrictions.

Those include a fence around the property, a cap on the resale amount of the units and a prohibition against renting them out.

How much the city can enforce residents’ "covenants, conditions and restrictions" also will be researched.

The vote to delay consideration of the project was 5-1 with Ted Miller voting "no." Larry Freedman recused himself from the discussion because he is a partner in the proposed development.

The next planning commission meeting is at 6 p.m. Jan. 20 in the Sequim Transit Center, 190 W. Cedar St.

The next city council meeting is 6 p.m. Jan. 26 at the transit center.

The City Walk project is planned for 2.41 acres north of the Boys & Girls Club and east of North Fifth Avenue, just south of the Sequim Aquatic Recreation Center. A new road, Oak Street, will be built from the project to Fifth Avenue.

The 48 townhouses will be built on 16 lots of 1,460 square feet and 32 lots of 1,022 square feet. The project requires a variance to the city’s minimum lot size and setback requirements.

The project is being developed by Larry Freedman, Sean Ryan and Karl Allen under the name City Walk LLC.

Planning Director Dennis Lefevre said the project required a variance for lot size and setbacks because it is located in the R4 residential zone.

The project’s density of 15-20 units per acre isn’t possible with that zone’s minimum lot size of 6,250 square feet, he said.

Lefevre said the project would provide "workforce housing," which refers to housing targeted at those making 80-120 percent of the county’s median income.

But several planning commissioners and business owners in the adjacent Fifth Avenue Plaza objected to the project’s density, location and potential for absentee landlords.

"One hundred and ninety-two people on two acres is difficult. It puts extreme pressure on government to maintain order," said Planning Commissioner Lloyd Pedersen.

Matt Ferrin, from Advocate Wealth Management, 528 N. Fifth Ave., said he understood the need for workforce housing but this project would be a neighbor of the Fifth Avenue Plaza.

Property values will decline because views from the offices will be degraded and the development’s residents will have a view of the expensive equipment in those offices, he said.

Andy Ramano, who owns a building in the Fifth Avenue Plaza, said the developers have a tremendous responsibility with this project.

"You’re going to create a ghetto in the middle of Sequim if you don’t do this right," Ramano said.

The city should require a cap on the resale amount, income requirements and prohibitions on absentee landlords renting out the units as an investment, Ramano said.

Steve Holloway, a business partner of Ferrin, said once absentee landlords rent out their property they lose control over it.

Alan Peet said he’s a new owner at the Fifth Avenue Plaza but never would have bought there if he knew a three-story building was going in across the street that would allow its residents to see in his window.

The project will increase vandalism, especially since many of the offices have nitrous oxide and narcotics stored there, Peet said.

Karl Allen, one of the developers, said they could have designed the project with as many as 66 units reaching up to 50 feet high.

"It’s designed as workforce housing. It’s called "City Walk" for a reason, people can walk to everything nearby," he said.

Two people spoke in favor of the development.

Former City Councilor Don Hall said he was applauding this project a year ago and now he’s back to do so again because he supports workforce housing and thought that was an ideal location.

Real estate agent Mike McAleer said 33 of the 48 units already are reserved, many by police officers.

"That should take care of your crime issue. Those are the people taking care of us and we are not taking care of them," he said.

Brian Gawley can be reached at bgawley@sequimgazette.com.