An ambitious proposal to build a five-story building featuring a glassy tower, offices, apartments and a coffee shop at one of downtown Palo Alto's most prominent corners took a major stride toward winning the city's approval Wednesday night, Feb. 22, when the Planning and Transportation Commission agreed to rezone the site to make the project possible.

It took four public hearings and a long debate over "public benefits" before the project at 355 Alma St. could gain the endorsement of the commission, which voted 5-2, with Susan Fineberg and Greg Tanaka dissenting to rezone the site. Because the project's density far exceeds the site's zoning, the applicants requested a change to a "planned community" zone -- a designation that allows developers to build beyond the city's restrictions in exchange for public benefits.

The planning commission had previously endorsed the appearance and the concept of the new building, which the city's Architectural Review Board had also approved. But at the Jan. 22 hearing, commissioners argued that the applicants have to provide more benefits to justify the increased intensity. The applicants returned this week with an expanded proposal, one that would provide more public parking, more units of affordable housing and a pledge to help the city fund a downtown parking study and a landscape improvements. The proposal includes 14 units of housing, seven of which would be below market rate, ground-floor retail and offices on the floors one through four.

The "Lytton Gateway" project, proposed by Lund Smith, Boyd Smith, Jim Baer and Scott Foster, represents in many ways the city's drive to encourage dense developments near major transit centers -- a key tenet of New Urbanism. The proposed building would stand at the intersection of Alma and Lytton Avenue, right across the street from the downtown Caltrain station. Without the zoning change, the development would have been limited to a two-story office building.

At a previous hearing, commissioners said they were concerned about the insufficient number of parking spaces proposed by the applicants. Several residents from the Downtown North neighborhood near the site urged the commission Wednesday not to green-light the project unless it provides more parking spaces. Among them was Sally-Ann Rudd, president of the Downtown North Residents Association. Rudd said she was concerned about the prospect of Lytton Gateway employees taking over the parking spaces in her residential neighborhood.

"We're already parked up during the day from a mixture of Caltrain commuters and downtown employees," Rudd said. "This has been a subject of some irritation from the residents."

To address the community's and the commission's concerns, the applicants agreed to provide eight surface parking spots and 14 underground-parking spots to the public in addition to the 123 spots they had previously said the project would include. The applicants also agreed to pay $60,000 to help the city fund a downtown parking study and to launch a full-service attendant-parking program that would add another 34 spots to the building.

"We truly believe this is the wave of the future for downtown parking," Lund Smith told the commission, referring to the attendant-parking program.