A Chattanooga planning panel on Monday denied zoning for a proposed $35 million retail, office and housing project in East Brainerd, but the developer expects to take his case to the City Council.

Guy Cherwonuk of Paces Ferry Builders said he has 90% of the neighbors around the wooded 16-acre tract in agreement with his proposal. But about a half dozen people who oppose the development turned out Monday before the Chattanooga-Hamilton County Regional Planning Commission.

Cherwonuk said the site in the 7400 block of Shallowford Road across from the Hamilton branch YMCA has space for 22,000 square feet of retail stores, about 3,500 square feet of offices and 88 townhomes. He said 26 of the townhomes would have retail businesses on the ground floor.

The developer compared the parcel to Ooltewah's Cambridge Square, saying the developers of that project "figured out how mixed-use works."

Cherwonuk was seeking a rezoning at the tract from single-family R-1 Residential and R-T/Z Residential Townhouse/Zero Lot Line zone to C-2 Convenience Commercial and R-T/Z Residential Townhouse/Zero Lot Line zone.

However, John Haustein, who owns residential property nearby, said neighbors like the R-1 zoning that already exists in the area.

"To change now would be a detriment to the area," he said.

Haustein also wanted the townhouses to be just two-story in height with no three-story units.

Another neighbor expressed concern about flooding, traffic and noise if the project is built.

Cherwonuk said that in terms of potential flooding, the parcel will be engineered to "over-detain" water.

"We'll reduce the water that leaves our site," he said.

Traffic from the development, he said, wouldn't be a factor to his neighbors.

Concerning the retail piece, Cherwonuk said he's in talks to bring three micro-breweries under one roof as well as a yogurt shop and others.

But City Councilman Darrin Ledford, who also serves on the planning panel, said he's worried the site couldn't support retail with so many shops closing in the wake of the coronavirus. The commercial space "gives me great pause," he said.

He said the planning commission staff had recommended approval of a residential zone for the entire site.

Jason Farmer, another panel member, said that while he liked the developer's site plan, he also was concerned about the commercial part. Also, he expressed concern if the project fit the R-T/Z zone.

Ledford said the developer can go back and work with neighbors, noting there's a month before it's to come before the City Council.

Cherwonuk already had deferred the project before the planning commission early this year to work with the neighborhood. He said that he "believes in the demographics in this case," adding he expects to lease space to "real quality retail."

Planning panel member Barry Payne said that "small commercial fits residential."

Contact Mike Pare at Follow him on Twitter @MikePareTFP.