BELLINGHAM - Construction of a four-story commercial and residential building at 10th Street and Mill Avenue in Fairhaven probably will begin in mid-2013, now that the property owners have the preliminary permits.

The City Council on Dec. 17 approved a building design higher than the 35-foot limit for that part of Fairhaven. The proposed building also passed aesthetic and slope stability reviews, the Planning and Community Development Department said Dec. 19.

In the current plan, the 38,600-square-foot building will be 52 feet tall, with commercial spaces on the first two floors and 11 residences on the top two floors.

Spaces should be ready to go on the market in 2014, said Bill Geyer, representing the property owner, Shannon Properties.

The council determined the additional height could be allowed because the proposal met all conditions, including adequate parking; limited obstruction of the bay view; and public amenities such as landscaping, street lights and way-finding signs.

The permit application was received one month before a 42-foot height restriction for that part of Fairhaven went into effect Aug. 27.

Shannon Properties agreed to pay $30,000 toward improving or relocating the South Bay Trail, which ends at the property. That is in addition to a $38,759 park impact fee. The trail will be moved about 20 feet east, Geyer said.

Testimony at a Dec. 3 public hearing before the council was mixed.

Bill Cook, who lives one block from the project site on 11th Street, said the amenities would not make up for the building's impact.

"It's a huge loss of the value of that trail ... to have a building on there," Cook said.

Greg Theisen, who co-owns a business in the Fairhaven Village Inn, said he supported the project. The inn is across Mill Avenue from the project site, and both properties are owned by Gene and Connie Shannon under different corporate names.

"If we stay static, all of the things we care about where we live will probably go away at some point," Theisen said. "Growth is necessary, unfortunately."

Reach RALPH SCHWARTZ at ralph.schwartz@bellinghamherald.com or call 715-2298.