A rendering shows a proposed grocery store and apartment building at 700 New Hampshire St.

After some discussion about an uncommon part of the request, the Lawrence City Commission ultimately voted to accept the incentives application for a downtown grocery and apartment project.

Apart from Mayor Leslie Soden, who dissented, commissioners voted at their Tuesday meeting that the city should accept the application and move forward with related studies and analysis, which will be funded by the developer.

“I’m a big believer in allowing processes to work,” Commissioner Lisa Larsen said. “And I’m not interested at all in circumventing that process, so I’m in favor of moving it through the process.”

As part of the incentives application, a development group led by Lawrence businessman Mike Treanor is requesting a special financing district, bond agreement and a $2.25 million loan from the city to help complete the project. The loan would help the grocer, Price Chopper, pay for tenant finishes for the store.

City Manager Tom Markus told commissioners that the request for a loan from the city was unusual. Markus said that although he thinks a grocery store downtown is a huge asset, he said “the bar is pretty high” for the city to be convinced that a loan is a the way to go.

“We will put this project through the same financial paces that any project would have to go through,” Markus said. “And just because I think the city finds this desirable is not a measure of how much the incentive is or isn’t. It will come down to the finances and the analytics that the city does.”

Bill Fleming, an attorney who represents the development group, told the commission that the loan is needed to make the project work.

“There’s a lot of things that we’re trying to do to make the numbers work too, but at the end of the day the grocery store has to make a reasonable return on their money,” Fleming said. “Otherwise they’re not going to be interested in doing the project.”

The $26 million project would be located at Seventh and New Hampshire streets on the site of the former Borders bookstore. The plan is to tear down the old bookstore and replace it with a three-story building with an underground parking garage. The ground floor of the building would house a Price Chopper grocery store and a pharmacy, and the upper two floors would house 69 apartments.

During public comment, some residents said that although they would like a grocery store downtown, they weren’t supportive of the large scale of the mixed-use building being proposed. Soden also questioned the size and why the city would consider providing a $2.25 million loan.

“It’s not sustainable if it needs incentives to go through,” Soden said.

In other business, the commission:

• Voted unanimously to conditionally approve the site plan for the former Jayhawk Bookstore, 1420 Crescent Road. The site plan changes the building’s use from general retail sales to fast-order food, which would allow walk-up service restaurants that derive up to 45 percent of sales from alcohol to locate in the space going forward. The commission added several conditions to the site plan, including requirements that the patio must close at 10 p.m., the prohibition of outdoor speakers, and the limitation of alcohol sales until 9 p.m. Sunday-Thursday and until 10 p.m. on Friday and Saturday. McLain’s Market, a Kansas-City based bakery, coffee shop and restaurant, plans to locate in the property.

• Unanimously approved new sign code regulations, which will delete and replace the current regulations. The changes regulate sign use by zoning districts and other land conditions, ensuring the city’s sign code is in line with a 2015 U.S. Supreme Court decision that says regulations for signs must be content-neutral.