SANTA CRUZ >> The lower end of Santa Cruz’s downtown, a major gateway to the city’s commercial core, is beginning to see some of the attention its busier north end has enjoyed to date.

Wednesday, developer Owen Lawlor submitted plans to the city to construct a six-story mixed residential and commercial building on property bounded by Laurel Street, Pacific Avenue and Front Street — an area where a Taco Bell restaurant, among other businesses, now sits. At 205 residential units and eligibility to stretch as high as 85 feet, the building would be one of the city’s more significant recent housing developments.

Comparatively, in the past decade, the city has averaged about 100 new residential units constructed a year, according to city Planning and Community Development Director Lee Butler.

The city’s allowance of increased building heights has met resistance from the community, as officials seek options to increase housing stock. Community members have written to elected officials and shared fears that high rises will affect the city’s small-town charm, increase traffic congestion and reduce sunlight filtering down to street level, among other concerns.

Yet news of the proposed project, delivered by Butler at the city’s State of the City event Thursday at the Hotel Paradox, was met with a spontaneous round of applause.

“Obviously, the Taco Bell is not the highest and best use of that property,” Butler said to the audience. “It’s been, I’ll say, a little bit of a problem for the community for many years. But, this is also indicative of how the change in our policies can really stimulate changes in development.”

The policy change Butler was referring to was last year’s update to the city Downtown Plan, certified by the California Coastal Commission at its March 8 meeting. The plan update generally allows for increased building heights, encourages better connection to the nearby San Lorenzo River walkway and calls for improved pedestrian access.

“We were hoping that from these additional heights, we would get additional investments in our downtown. And it looks like that is coming true with these preliminary reviews and now this formal application,” Butler said by phone after the meeting. “It’s been many decades that those buildings on the south end of downtown have sat in the condition that they are without substantial investments.”

In addition to the corner capstone project, partner Lawlor has submitted a preliminary application to combine parcels and build another six-story mixed-use development behind Pacific Avenue’s Santa Cruz Metro Station, on 418, 428, 440, 504 and 508 Front St. The 45,344-square-foot project, the first riverside development proposed in decades, according to Butler, is eligible to reach up to 70 feet in height and may include construction of 137 residential units. Per initial designs, the second floor would be level with the top of the Riverwalk, Butler said.

Lawlor, reached for comment Thursday afternoon, declined to comment on either project, saying he preferred to wait for city feedback on the project proposal before speaking out.