When billionaire developer John Arrillaga proposed last year to build a complex of high-rises and a theater near Palo Alto's downtown Caltrain station, his vision didn't exactly wow the community.

Residents complained about the height of the proposed office buildings, the development's traffic impact and a lack of transparency in the planning process. The City Council considered sending Arrillaga's proposal to the ballot box but scrapped that plan in December after getting an earful of criticism. Instead, the council directed staff to return with several alternatives for the area around 27 University Ave.

This week, the planning process took another twist when the city planners released a proposal that would effectively hit the reset button on the dramatic proposal and allow the community to offer its own vision for the site. Under a proposal that the council is scheduled to consider Monday night, the city would launch an extensive outreach process involving community meetings, a process that would culminate in an official city "vision" for the site, which is both a doorstep to Caltrain's second-busiest station and a gateway between downtown Palo Alto and Stanford University.

The proposal by staff represents a significant slowing down of a planning process that many in the community had criticized last year for moving far too fast and for taking place largely behind the scenes. A report released by the Planning and Transportation Department on Wednesday afternoon outlines three different options for a community-led process. The one it recommends would include between two and three community meetings, with each meeting focusing on a particular aspect of the redevelopment, whether architecture, site design and building heights.

The city estimates that this "focused community input process" will take between six to eight months and cost between $100,000 and $150,000. Other outreach processes outlined in the report range in cost from $300,000 (10 to 12 meetings over a period of one to two years, with break-off groups discussing the topics in greater detail) to about $750,000. The latter option, which would take between three and six years to complete, would include a detailed zoning analysis similar to the kind undertaken a decade ago in the downtown area known as SOFA (South of Forest Avenue).

When first proposed, the Arrillaga development consisted of four office towers, with the tallest one 10 stories and 162-feet tall. The proposal was later revised and the tallest building cut down to seven stories and 114 feet tall (still more than twice the city's maximum allowed height of 50 feet). Even with the revisions, the plan proved a tough sell. Dozens of speakers criticized the proposal at the Dec. 3 meeting of the council and members ultimately decided to slow things down and continue other alternatives for the site.

Councilman Pat Burt, a former planning commissioner who had worked on the SOFA plan, argued that the process has "gone sideways." Councilwoman Karen Holman, another former planning commissioner, amended his metaphor by 90 degrees and said the process has been "upside-down." Both urged the city to consider the community vision and then see if they can find a way to turn the vision into a realty.

"The best way for us to move toward something that both has a good chance for community support and good design outcomes it to go ahead and invest in this open Palo Alto process," Burt said at the Dec. 3 meeting. "We come up with a site master plan and we find out whether we have a developer who is interested in proceeding within the framework that we set up."

Much of the work on redesigning the area has already been done. In the early 1990s, a group called the "Dream Team" consisting of architects, planners and urban-design experts from the city and Stanford University, considered changes to the prominent but labyrinthine area around the transit center. Their work, however, has not borne fruit because of insufficient funding.

The topic also featured prominently in the city's negotiations with Stanford University Medical Center over Stanford's massive expansion of its hospital facilities. As part of the project, which the council approved in 2011, Stanford agreed to allocate funding for design work around the transit fund.

Arrillaga's proposal for what the city termed the "arts and innovation district" returned the prospect of redesigning the transit-hub site to center stage. The developer had offered to donate the office buildings to Stanford University. The performing-arts theater, meanwhile, would be used by TheatreWorks, a renowned theater company that currently splits its time between the Lucie Stern Community Center and the Mountain View Center for the Performing Arts.

According to the new report from the planning department, staff has recently interviewed firms to analyze traffic at 25 intersections around the site. The analysis will be used to examine the impact of various land-use scenarios for the site.

The report from city planners does not propose any particular design but seeks rather to "create a process which allows the public to be involved in creating a realistic and implementable land use and site design concept" for the area. It also stresses the strategic importance for the area around 27 University Ave., which it calls one of the most critical sites in the city.

"As currently configured, the site creates a barrier for movement between the West End of Downtown Palo Alto and Stanford," the report states. "Elimination of this barrier, by creating fluid pedestrian, bicycle, automobile and transit connections within the site and between Downtown Palo Alto and Stanford, should be a driving component of the visioning process."