Seattle Children's and the Laurelhurst Community Club have reached a deal to reduce the hospital's proposed 1.5-million-square-foot expansion.

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Seattle Children’s and its Laurelhurst neighbors announced a deal Wednesday that scales back the hospital’s proposed 1.5-million-square-foot expansion and won’t push into nearby residential areas for at least 50 years.

The agreement, which comes after weeks of intense discussions, calls for trimming the plans by 275,000 square feet — about 18 percent.

Details were presented Wednesday morning inside a packed Seattle City Council chambers; now, it’s up to the council to make a final decision on the project.

Both Children’s and neighbors made concessions.

The Laurelhurst Community Club, for instance, agreed to building heights taller than those it originally wanted. And Children’s cut out plans to build on a nearby site known as the Hartmann property. In return, the club — which had voiced strong complaints about traffic impacts — is withdrawing its appeal to the city.

Although hospital officials agreed to scale back, they would be able to carry out their original goal of more than doubling bed capacity from 250 to 600 beds.

Construction would unfold in four phases, over 20 years, said Lisa Brandenburg, chief administrative officer.

The hospital also agreed to pay the community club $150,000 “in the spirit of goodwill and in recognition of the expense borne by the community,” according to the document.

Other key provisions include:

• Only 20 percent of the new campus buildings can be more than 90 feet high, with no structure taller than 140 feet.

• There will be no expansion across Sand Point Way Northeast on the Hartmann property.

• The southwest parking garage would be built underground.

Addressing the council, John Keegan, Children’s land-use attorney, said the agreement came out of “tough negotiations.”

“We treat this as a significant compromise,” he said.

But, he added, “you are the ultimate decider of whether … it achieves the needs of the institution and the livability of the neighborhood.”

Members of the community club who attended the City Council meeting said they were thrilled.

“It’s been a long time in coming,” said Jeannie Hale, the group’s president. “We’re looking forward to having a positive relationship with Children’s and an expansion that meets their needs.”

Hospital officials say the project is urgent and that Children’s has been operating at or near capacity for years. Last year, they say, they had to turn away 79 “seriously ill” children in a 10-month period because of a lack of beds.

“Even this last weekend, we were running over 100 percent capacity,” Brandenburg said.

The additional beds would be housed primarily in three new buildings. The plan also includes a new emergency department and more office space.

Last year, Children’s original proposal hit a stumbling block when city Hearing Examiner Sue Tanner called it too “aggressive” for the surrounding community.

Tanner urged the City Council not to approve the project in that form, citing potentially severe traffic impacts as one of the reasons. She also questioned whether the hospital overestimated its long-term need for more beds.

She recommended various changes to reduce the impact to the neighborhood. And the latest settlement adopts many of them.

Children’s serves the four-state region of Washington, Alaska, Idaho and Montana. Over the years, the hospital has been moving outpatient services and research operations off its Laurelhurst campus to free up space for inpatient care.

The City Council is expected to meet on the issue again Feb. 25, but it’s unclear when a vote will come.

There’s another sticking point. The project would demolish a 136-unit condo building called Laurelon Terrace. Children’s has reached a deal with the homeowners to buy them out for $93 million.

But John Fox, head of the Seattle Displacement Coalition, said the law requires that lost housing be replaced. And the amount Children’s is offering to pay for new units is not enough, Fox contends.

Even if the expansion gets approved, the state Department of Health has to weigh in and look at whether more beds are needed in an area. It must issue a “certificate of need” before any dirt moves.

Sonia Krishnan: 206-515-5546 or skrishnan@seattletimes.com.

Material from Seattle Times archives is included.