The Kirkland Council delayed the development of the proposed Potala Village project for the fourth time during its Oct. 16 meeting, however city officials are hoping for good news soon with the controversial project.

The council voted unanimously on Oct. 16 to extend the moratorium on development in the Business Neighborhood (BN) zone through Dec. 31. The moratorium, which was initially imposed last November, was set to expire Nov. 15.

But the Potala Village, which is proposed to be built in the Moss Bay neighborhood’s BN zone, may finally be moving in a positive direction for city officials, developer Lobsang Dargey of Dargey Enterprises and the surrounding community.

“The positive news is that we are still in very productive discussions. We are all still at the table,” said City Manager Kurt Triplett, noting that the city has been in mediation for the past couple of weeks with Dargey and several residents concerned about the project’s scale and neighborhood impact. “Hopefully we can reach some sort of agreement.”

Triplett could not comment further on the details of the mediation. But he did say the developer “has stayed his litigation, which we appreciate while mediations are going on.”

If the group does reach a mediated agreement, the council would take action to implement that agreement some time in November and the lawsuit would be dropped, said Triplett.

Dargey could not be reached for comment.

When Dargey proposed a 144 apartment unit on a 1.2 acre lot with a view of Lake Washington in the BN zone last year, the surrounding community protested. Project opponents said the BN zoning code’s unlimited-density issue conflicts with the city’s Comprehensive Plan.

The BN zone permits such uses as retail, office and residential.

As a result, the city issued several moratoria on new building permits for the area.

The freezes led Dargey to file a lawsuit in May arguing that the city did not have the jurisdiction to react that way based on one project.

Triplett said the brief extension on prohibiting development will allow the council to adopt any BN zoning changes at the same time the city adopts its annual Comprehensive Plan amendments. Plan amendments can only be adopted once a year.

“The changes need to be adopted together to have them synced up,” said Triplett, noting the council will likely take final action on amendments to the BN zoning regulations at its last meeting of the year on Dec. 11, along with related amendments to the Comprehensive Plan.

The public will have an opportunity to speak on the draft amendments to the BN zoning at the beginning of the meeting under “Items from the Audience.” The meeting will start at 7:30 p.m. and will be held in the Council Chambers.