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With signed lease agreements with a grocer and a hardware retailer in hand, the team planning to develop the Goat Blocks in Southeast Portland is eager to gain approval from the Portland Design Commission.

But that won’t come until at least next month, after several issues were brought up Thursday during a roughly six-hour hearing before the commission. Approximately nine months have passed since developer Killian Pacific filed its request for a pre-application conference with the city.

“The bottom line is we need an approval,” said Tom Moisan, president of Ankrom Moisan Architects. “We need to keep this moving.”

Killian Pacific is planning to add 87,000 square feet of retail space and 247 apartment units on a three-block area. The seven-building development would include a grocery store and a hardware store, and several smaller retail spaces, Killian Pacific Managing Director Noel Johnson said.

“We’re pretty adamant this is not the next Pearl District,” he said. “It works hard to diversify and complement an already rich built environment.”

At the heart of the discussion Thursday was the use of public space and how the building would interface with the neighborhood at street level. The property, previously used as pastureland by a herd of goats, could mark the east-to-west transition from the leafy Buckman neighborhood to the grittier Central Eastside.

That transition presents a design challenge because the property slopes 24 feet from the northeastern corner at Belmont Street and 12th Avenue to the southwestern corner at Taylor Street and 10th Avenue.

Killian Pacific and Portland-based Ankrom Moisan Architects, the project architect, have proposed building an alley through the property from Yamhill Street. The alley would essentially cut the property in half and take advantage of the slope with a set of stairs rather than a flat surface.

One commissioner, David Keltner, said he would not vote for design approval unless the developers were to build Yamhill into a continuous street that would encourage more pedestrian and bicyclist traffic through the development. Otherwise, the steps would create a “weird dead end,” he said.

“The kinds of spaces they are making are creative and inventive, but you’ve got to be sure that you’re doing everything else to make sure that they actually work,” he said.

The Yamhill steps would provide some dramatic views of the city’s skyline and also provide more room underneath for the hardware store, Johnson said.

“We simply disagree that it’s better to slope smoothly,” he said. “We think it’s better to basically hold it level and then go down stairs. It creates an iconic viewpoint of downtown.”

Commissioners who reviewed the project wanted to know how the Yamhill alley and another smaller pedestrian walkway would contribute to public space, which is a requirement for superblock projects.

“My point of view is that there is a lot of corridor circulation, but there is no place to get off the path and be in public space,” Commissioner Jane Hansen said.

Commissioners also repeated concerns issued in February about a lack of coherency in some of the planned materials and complexity of forms.

“The biggest issue is that so little changed in response to our original comments,” said Keltner, a principal architect at THA Architecture.

Buckman resident Kenneth Diener, owner of KJD Architecture in Portland, wondered whether a second-floor restaurant space could be set back farther from the street and an internal corridor could be moved to the perimeter.

“That would allow the grocery to expand upward, and it would activate the walkway on the west side,” said Diener, who submitted 25 pages of testimony stating concerns about the project. “There is no reason that can’t work.”

Making suggested changes, including leveling the Yamhill alley extension and setting back second-floor retail space, could lessen the appeal of prospective tenants, said Jeff Mitchem, an Ankrom Moisan urban designer.

“The moment you do one of those things, you lose the second-floor viability and views to the west of the city,” he said.

Killian Pacific will return with suggested changes at a July 17 hearing. Its goal is to start construction in August, Johnson said.