Kevin Vaughn with Montgomery-based JMR+H Architecture, left, and City of Cullman Building Inspector Rick Fulmer chat following Tuesday’s Planning Commission meeting. Vaughn spoke about a planned three-story building on Fourth Street and Third Avenue Southeast. The first level will feature two retail spaces and the second and third floor would be for loft apartments.

Cullman is looking to revise its rules related to loft apartments in a bid to spur more development of residential projects downtown.

On Tuesday, the Cullman Planning Commission approved recommending to the city council a proposed change to its loft apartment ordinance, replacing the 50/50 rule — where half a building’s floor space has to be dedicate to commercial purposes and the rest residential — with rules that require business only on the first floor and residential living on the second and third floor.

“I’ve had two developers that have looked at this in the past, and they’re interested in doing three-story buildings. To protect the city, I think we need to change our ordinance so that anything on the ground floor stays commercial business — that’s the idea of the downtown business district. The problem is they often can’t make the numbers (50/50) work because the second story won’t rent for enough to justify the construction.”

Loft apartments are easier to finance with a second level of lofts bringing in revenue.

Fulmer also noted that the buildings with basements should be considered as part of the commercial part of the building, per the amended ordinance.

In an unrelated — but could likely be impacted — matter, the commission approved a site plan for a three-story mixed-use project planned for a lot at Fourth Street and Third Avenue Southeast, across from All Steak Restaurant. The first level will feature two retail spaces and the second and third floor would be for loft apartments.

Kevin Vaughn with Montgomery-based JMR+H Architecture declined to provide any details about what could possibly occupy the retail space and said the timeline of the project could be affected by the city’s decision on the revised loft ordinance.

The April 27, 2011 tornado severely damage an automotive paint store that used to be on the lot and was later demolished.

In other business, the Cullman Planning Commission:

Recommended to the city council the annexation of 165 acres along U.S. 278 West for AG-2 zoning

Recommended to the city council the annexation of 11 acres off Fromhold Road for AG-1 zoning.

Recommended to the city council the annexation of two acres off Fromhold Road for R-1 zoning.

Recommended to the city council the annexation of property in the 200 block of County Road 1320 in R-1 zoning.