A standing-room-only crowd gathered at Tuesday’s Town Council meeting to hear a developer’s preliminary plans for a residential redevelopment of the Wells Fargo bank site at the corner of South County Road and Royal Palm Way.

The Palm Beach-based Frisbie Group proposes to build the “East Plaza” project in cooperation with Wells Fargo, which owns the 5.8-acre property in the 200 block of South County Road. Related Cos., the New York-based real estate company, would supply financial support.

Although a development application has been filed with the town, the project was before the council Tuesday for an informal review in connection with the developers’ request for a zoning change.

Project Manager Rob Frisbie Jr. and Josh Martin, consultant to the Frisbie Group, outlined the Frisbie proposal to redevelop much of the site with around 40 houses, townhouses, and condominiums. The development would also include an underground parking structure.

The plan would reduce the amount of commercial area without adding any retail or office space, Frisbie said. Wells Fargo would remain at the site as the only commercial use.

“We think this is such a positive reimagining of the Wells Fargo site,” he said.

Three parking lots currently occupy most of the property, which includes a block-long stretch of buildings along South County Road. The street-facing exteriors of the landmarked Wells Fargo buildings are protected from demolition and can’t be significantly altered without approval from the Landmarks Preservation Commission.

Council members and many residents said that, considering that the property is for sale by Wells Fargo and likely to be redeveloped, they like the plan to convert it into residences because it is less intensive than commercial uses.

But they said the developers need to modify their plans by reducing the residential density, which would exceed current zoning rules, and by lowering the height of three-story residences. They also called for more green space.

“There is a lot to like in this project,” Councilman Lew Crampton said. But he added, “I can’t support [the plan] without limiting the height to two stories and without thinning out” the number of residences.

Councilwoman Bobbie Lindsay said residents want the council to hold the line on building height and density.

“These are beautiful homes, but the size is out of scale, and our comprehensive plan tells us to limit density,” Lindsay said.

The 5.8-acre site currently falls under three separate zoning districts, which allow for commercial and low-density residential uses. The developers are asking the town to change the zoning by designating the entire property as a planned unit development, or PUD, with cohesive, site-specific regulations that would have to be approved by the council.

Frisbie said 72 percent of the land is currently zoned for commercial use. Under the developers’ PUD proposal, he said, the property would be residential with the bank as the only remaining commercial use.

The landmarked building facades along South County Road would be preserved. The non-landmarked facades on the northwest and southwest corners of the block would also be preserved, Frisbie said.

“We want to prioritize the pedestrian experience, with landscaping, green space, and courtyards,” he said. “This would be possible by replacing the surface parking on the site today with underground parking.”

The number of residences would be around 40, including eight two-story single-family houses on the north side of the property, which backs up to Seaview Avenue. The houses would be designed in differing styles inspired by the town’s historic architectural masters, Frisbie said.

Most of the residences would be townhouses or condominiums, including three-story buildings that would face Royal Palm Way.

Martin said the developers settled on the PUD proposal after deciding they want the project to be primarily residential. On 70 percent of the site, residential use is not allowed on the first floor under current zoning guidelines.

The project couldn’t be built under the current zoning rules without zoning variances. “To do variances, we need a hardship,” Martin said. “We don’t have even an inkling of a hardship. It’s primarily a parking lot. That’s not a hardship.”

Frisbie said the developers’ proposal would create a de-intensification compared to the commercial uses that are allowed in the two non-residential districts on the site today. Those include restaurants, clubs and even a hotel as a “special exception” use, meaning the council would be legally obligated to approve it if the design met certain criteria specified in the town code.

But Zoning Director Wayne Bergman said the developers are seeking to build the new homes at a density of between six and seven units per acre, which exceeds the limit of the existing code, which allows four homes per acre.

“This is an intensification in density compared to what exists today and an increase in height,” Bergman said.

Under the proposed PUD, the developers can request whatever density they like, and it’s up to the council to accept or modify that, Bergman said.

The size of the new homes was also a concern for some. The smallest would be 3,500 square feet. The largest, in the center of the property, would be 8,000 square feet, according to Frisbie.

Residents appeared to divided between those in favor of the project and those who were opposed to the height and density – or opposed altogether.

Tina Fanjul objected to the project, saying it would not be good for the town.

“Traffic is going to increase, density is going to increase, green space is going to decrease,” Fanjul said. “There are no setbacks between houses. This is almost a gated community. We don’t want that kind of buildings in our town. This is much too much building.”

John Koch, president of the 100 Royal Palm Way Condominium Association, said the owners there like the residential nature of the project but oppose any building heights above two stories. He noted the new buildings would be constructed at an elevation of 12 feet – four feet higher than the existing grade – making them appear even taller from the street.

Traffic congestion is another big concern, said Koch, adding that a hotel is under construction on the ocean block of Royal Palm Way.

“Royal Palm Way is under vehicular assault,” he said.

Martin Klein, who is a former chairman of the Planning and Zoning Commission, praised the Frisbie plan.

“Change does come, and we need to manage it well and this plan does that,” he said. “I think it does de-intensify. It eliminates asphalt and provides additional green space.”

Paul Leone, president of The Breakers, also supported the plan, saying residential redevelopment is best for the town.

“Wells Fargo is not going to sit on a parking lot for another 50 years,” Leone said. “They have put the property on the market. So, you have a choice: residential or commercial. Residential is far less intense than commercial. And who is better than the Frisbie Group? We could not ask for a better applicant.”

Council President Margaret Zeidman said whoever buys the property will have the right to build on it within the guidelines of the town’s zoning code and comprehensive plan, which acts as a guide for land use on the island. But she said any future development there must be limited to two stories and that the design should be in a smaller scale.

“I don’t want 8,000-square-foot homes – they’re just too big,” she said. “I want to see a lot more green.”

The council did not defer the development application; Tuesday’s presentation and discussion was for the purpose of providing feedback to the developers. If the developers decide to move forward with their application, they will next appear before the Planning and Zoning Commission, then return to the council for final review. Any zoning changes would have to be adopted by the council as an ordinance, Bergman said.

Any exterior changes to the landmarked buildings will also require approval from the Landmarks Preservation Commission.

“This is the first step in a long process,” Bergman said.

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