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Councilmember Cook-Kallio questioned what conditions the applicants would need to meet in order to modify the homes. Ms. Decker said they would go through an administrative, staff-level design review, with a 300 foot noticing, and after 7 days if there is no request for a hearing, the request is approved. The height would be at a maximum of 30 feet and the setback would be in conformity with RM4000 District through the design review process. Councilmember Cook-Kallio said she was struggling with the Planning Commission's recommendation, as it seemed to be somewhat arbitrary. If the property was split, she questioned if the applicants could be asked to return to the Planning Commission. Ms. Decker said the action before the Council was for a PUD rezoning and development plan approval with development standards. Staff looked at what the applicants could do and not go through this particular process and consider variances processes. The RM4000 District has a minimum lot size of 8,000 square feet, so they would not be able to split the property without doing a rezoning to accommodate what is similar with adjacent parcels. It is however, consistent with the RM4000 in terms of having two units on the site, and the applicant could come forward with modifications to the structures, but in order to provide an ownership opportunity with a smaller home, this is the proposal-to have a PUD rezoning. The actual lot split will return to staff for Zoning Administrator approval as a hearing item and it does not go to Planning Commission or City Council. Mayor Hosterman opened the public hearing. She said there are three issues regarding development standards; building height, FAR, and process. She questioned if the applicant could develop something that fits into the neighborhood instead of hampering development opportunities through applicant design guidelines, or would he prefer to know definitely what the Council would or would not support. Mike Carey, Applicant, said there are two owners and two families and it was always the intent to split the lots. They have no agenda to add on or change it, he clarified this was only a lot split, but the PUD process is the easiest way to process lot splits. He said they would be agreeable with negotiating the height and FAR, and believed the Planning Commission was random in their assessment. They would be amenable to a 35% FAR, are okay with 27 or 28 feet in height, they are not planning to demolish the home and even if they were, the Planning Commission and neighbors are noticed, therefore felt it is unreasonably that they would need to return to the Planning Commission for any simple change. Councilmember Sullivan disclosed he visited the site, met with Mr. Carey, disagrees with the consultant and believes the house is historically significant, and he questioned Mr. Carey as to what he would do with the house. Mr. Carey said the PUD process does not empower them to do anything any different than if anybody on the street wanted to do anything to their homes. There is a very restrictive process for those homes 50 years or older, he said they have no plans to tear down the house and even if they did, everybody would be notified and could discuss the matter. If anything, they would like to add dormers, fix it up, restore the siding back to its original period, and agreed it has a good presence on the street, but is pretty dilapidated. Councilmember Sullivan questioned how staff has dealt with homes of historical significance. Ms. Decker said when a request for demolition is received, staff reviews what the cost is to actually repair that structure, analyze whether or not there is a historical significance belief, and generally, if the applicant can show the cost of reconstruction or repair to restore the structure is greater than about 50%, there is an opportunity for the home to be modified. She said there are various examples of historic structures being modified within the City whereby the construction may seem to be significant; however, staff requires they are consistent with the architecture of