At a July 20 study-session meeting, Campbell City Council members made it clear that Chalmers' proposal to replace two businesses on McGlincy Lane with a large residential development wasn't their vision for the light-industrial area.

"It's back to the drawing board," Chalmers said after hearing the concerns of city officials.

Instant Storage and the Bay Area Recycling Site now occupy his properties at 700 to 750 McGlincy Lane. The land is currently zoned for light-industrial use, but if Chalmers' idea had gotten the nod from council members, it would have been rezoned for residential use and redeveloped to accommodate 64 single-family homes. Nine of those units would have also been designated low-income housing.

But, said Campbell Senior Planner Geoff Bradley, the proposal would require a number of amendments to Campbell's General Plan, and the planning department would not recommend the changes.

The planning department also cited concerns about traffic, hazardous chemicals and land-use incompatibility in its report to the study-session members.

However, Rick Denman, who was representing Chalmers at the session, said there were several possibilities that can come with a new residential development, including increased tax revenues.

"This could be a very positive addition to the community," Denman said.

The planning department's report, however, said the tax revenues of an industrial project and those of a residential development would not be substantially different.

Mayor Donald Burr said he was more concerned about having an out-of-place residential zone in the city than the potential tax revenue it could generate.

"Could we have new homes in Campbell?" he asked. "We certainly could, but I'm not sure if this is the right place for them. I'm not sure if a residential zone fits there."