A proposed deli, grocery store and bakery at a historic Dubuque building passed its first regulatory hurdle on Thursday.

City Zoning Board of Adjustment members voted unanimously to grant Tim Conlon and Roux Conlon-Loar a variance allowing for the establishment of a planned unit development at 620 South Grandview Ave. and 333 Bryant St., the site of the proposed new business.

The Conlons intend to renovate and restore the historic building popularly known as the “Milk House” and convert it into a grocery store and deli, while the existing building will be demolished and a new structure will be constructed at 333 Bryant to house a bakery.

The Conlons sought to rezone the two properties to planned unit development to bring the development in line with city code. However, city code only allows a planned unit development to be granted to properties that are at least two acres in size, and the project site is smaller than one acre. As a result, the Zoning Board of Adjustment was asked to grant a variance.

“Ideally, we could make it one single campus when we are remodeling,” said Conlon-Loar.

City Planning Services Manager Wally Wernimont said seven properties in Dubuque smaller than two acres have been granted planned unit development variances.

On Wednesday, June 1, Zoning Advisory Commission members will be asked to vote on whether to recommend that the planned unit development should be approved. That recommendation then will go to the City Council, which will make a final determination.

Conlon bought the Milk House building early last year after the former business occupying it, Milk House Artisan Eatery, Baked Goods & Catering, closed after permit issues came to light amid pushback from neighbors over the business’ expansion plans.

Along with restoring the building to more closely resemble its original design, Conlon also intends to add onto the structure to provide seating for deli customers. In addition to deli sandwiches, the store would sell coffee, olive oil, cheeses, produce and dairy products, along with offering a selection of wines and beers.

Conlon-Loar said the newly constructed building that would house the bakery would aesthetically complement the neighborhood.

“We would build a new, prettier structure, we think,” she said.

During Thursday’s meeting, one resident, Kathy Schmit, who lives on South Grandview Avenue, raised concerns about the project, arguing that the development could negatively impact the quality of life in the area.

“We are concerned about the parking and the traffic,” she said.

Schmit added that she fears the zoning change would allow for the future establishment of a bar if the Conlons’ business closes.

“Do they have to have the beer and wine?” Schmit asked. ‘We are afraid if it doesn’t work in a year, it could be turned into a bar.”

Shana Moon, associate planner for the city, said the concerns brought forward by Schmit could be addressed at future meetings on the project’s zoning request and proposed site plan.

Conlon previously stated he intends to begin construction early this summer, with a planned opening of the new business next spring.