It was agreed during the council's public meeting earlier this week
Douglas Council is supporting the development of Crookall House provided it meets two conditions.
Plans which include 133 homes - which could be split into flats, houses, and a senior living block - with a new scout hut and retail space.
Despite objections by councillors about parking issues the first condition is a payment to the council if the Manx Development Coporation cannot improve community spaces.
The other condition is for revisions by the Department of Environment Food and Agriculture and Highways to be approved.
Council Leader Clare Wells said during the meeting the council should be looking for 'alternatives', to the problems raised because 'that's our job'.
Multi-storey car parks and changes to parking permits and disc zones were raised as solutions.
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