The project would be built on the 2 acres at the northwest corner of Mount Diablo Boulevard and Dolores Drive that now house Celia's Mexican restaurant and other facilities.
It would include retail uses and 47 townhouses in four clusters on the property. Eight of the units would need an exemption from the city's 35-foot height limit. A portion of the project would be affordable housing.
Lennar Homes representatives said the residential/commercial project would be a good "transitional" facility linking the retail-oriented downtown with the more residential and commercial western end of the community.
"It lives in the best of both those worlds," said Chuck Tang of Studio T-SQ, which is working with Lennar Homes on the development. "We're very excited about this site."
Tang said the project could include live-work units where merchants have their businesses on the first floor and their residences on the second floor.
Tang answered questions about the height limits by saying the sloping nature of the property requires some of the buildings in the back to be 45 feet high.
Members of both commissions expressed serious concerns about the project as it's currently designed.
"It's a wall of buildings and is anything but a transition," said one Design Review Commission member.
Another said the development needs to lose its residential aspect and be "more urban" with commercial uses.
"The idea of work-live is a non-starter for me," he said.
Councilwoman Traci Reilly said she agrees the project needs to be more commercial. She added local schools are near capacity, so more residential construction in town may not be the wisest choice.
Residents who spoke were equally critical.
Guy Atwood said he was opposed to tearing down current commercial facilities and not replacing them.
"Once it's gone, it's gone," he said.
Others said the project would increase traffic in an intersection that is already crowded.
"It's already congested and a project like this would add to it," one resident said.
Some residents also worried the multi-story buildings would block views of the city's northern hills as well as views of Mount Diablo for people who live west of the property.
One Design Review Commission member summed it up by saying the developers need to listen to these concerns and bring back revised plans.
"It will be very troubling to see it come back in the same form," he said.