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Mr. Dolan presented a slide listing the FARs, ranging from 49% to 89%, on several nearby PUDs. Councilmember Brown asked whether these comply with guidelines for development in the downtown. Mr. Dolan explained that while a higher density is encouraged in the downtown, the community has ultimately been more comfortable with small lot single family homes than attached units. Single family homes keep with the character of the surrounding neighborhood but typically require a compromise in terms of FAR. He concluded his presentation, stating that staff recommends approval of Option 1. Mayor Thorne expressed concern that someone could purchase Lot 13 and still do nothing to improve the home. Mr. Dolan explained that the city's ability to influence what happens there depends largely on timing. If sold immediately, there is a certain risk that the new owner may leave the home as is. If, however, the applicant pulls their permits prior to a sale then they would be required to make the investment already described. While this is not a guarantee that additional improvements will be made, the aesthetic improvements, Ponderosa's own project and the alternative land uses certainly make it more a marketable site. Mayor Thorne asked and Mr. Dolan clarified that the applicant is responsible for $30,000 worth of improvements to the home, equal to the Bernal Park Fee, and not any more or less. Councilmember Narum said she read Condition No. 4 a bit differently, in that they must invest a minimum of$30,000 and address the areas of roofing, exterior paint and landscaping. She asked what staff's intent is if this were insufficient to address three items. Mr. Dolan explained that it is both a minimum and maximum, with the funds to be devoted to the three areas identified in whatever manner will yield the greatest benefit. Councilmember Pentin asked if allowing a limited commercial use would require the home to be brought up to current code and ADA requirements. Mr. Dolan said there are likely several deficiencies that should be corrected regardless of the use. Mayor Thorne asked and Mr. Dolan confirmed that staff believes that the illegal second story was constructed sometime in the 1960s, and that this is likely partly responsible for the integrity concerns identified in the historical analysis. Councilmember Pentin asked and Mr. Dolan confirmed that the City could require the second story to be removed as part of the reroofing process, provided it was not permitted and lacks structural integrity. Mr. Fialho stated that staff met with the applicant to develop a plan for the existing home and identified two options — demolition or incentivizing the preservation of the home by providing a fee credit of $30,000. Staff's intent was that they use these funds to spruce up the property so that it does not appear neglected, particularly adjacent to a multimillion dollar development, and not that they do any improvements to the interior of the home. He noted that the minutiae of this is really no longer relevant because there is an active sale associated with the property, which is why staff has recommended additional language to Condition No. 4 redirecting the incentive back to Bernal Park if the lot is sold. Mayor Thorne opened the public hearing. Pam Hardy, Ponderosa Homes, said she agreed with staff that it would be advantageous to present both options to the Council and noted that the existing home seems to have generated the greatest amount of attention regarding this application. She stated that Ponderosa first entered into an option City Council Minutes Page 5 of 10 August 20,2013