The Kirkland City Council is moving toward restricting the number of apartments or condos that can be built on Lobsang Dargey's Potala Village property, but mediated talks could determine what the project will look like.

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Even though the Kirkland City Council plans to lower the number of apartments or condos that can be built on a lakeview property south of downtown, that decision might come too late to determine what’s actually built there.

That’s because developer Lobsang Dargey applied for permits for his 143-unit Potala Village project on Lake Street South long before the council’s tentative decision Tuesday to adopt development rules that would allow fewer than one-third as many homes.

Neighbors who want to scale back the high-density project say it’s out of character with the neighborhood and would worsen traffic snarls on Lake Street, also known as Lake Washington Boulevard.

Dargey defends it as consistent with existing zoning. “We have a vested permit,” he said Wednesday, arguing that any subsequent zoning changes wouldn’t apply to his project.

Three days of mediated talks have been held in an attempt to craft an agreement among Dargey, city officials and residents who oppose the high-density project.

City Manager Kurt Triplett told the council Tuesday the parties “have done a tremendous job of listening. We are hopeful that something will come out of that.”

Dargey said it wasn’t yet clear if the parties will be able to reach a compromise. “We are at the table. We don’t want to go to court and fight this,” he said.

A 4-3 majority of the City Council on Tuesday endorsed a Planning Commission recommendation that the comprehensive plan be changed to allow 36 residential units per acre, or about 43 total units on Dargey’s 1.2-acre property.

Three council members favored a density cap of no more than 24 units per acre on the property, which is zoned for neighborhood business use. Most surrounding residential properties are zoned for no more than 12 homes per acre.

Current zoning sets no upper limit on the number of units that can be built on Dargey’s property, but rules on height, setbacks and parking determine the maximum building size.

Dargey has proposed to put shops or offices on the first floor of a four-story mixed-use structure above 316 stalls of underground parking.

The density limits could be adopted in December along with other amendments to the comprehensive plan.

Keith Ervin: 206-464-2105 or kervin@seattletimes.com