POULSBO — The smoky haze over the future of Mitzel’s restaurant in Poulsbo has finally cleared.

After the popular eatery was destroyed in a May 30 fire, Mitzel’s officials, the owners of Poulsbo Village and the community expressed hope the restaurant would be rebuilt quickly.

However, concerns were raised because the building’s proximity to Dogfish Creek and the city’s Critical Areas Ordinance, which requires a 40-foot setback from the creek for new construction.

All those concerns and fears were alleviated when Mayor Kathryn Quade announced at Wednesday’s city council meeting that an agreement had been reached that will allow the restaurant to return to its original location.

“This morning our planning director (Barry Berezowsky) informed me that Mitzel’s will be able to be rebuilt on its original location,” Quade said.

As part of the approval for rebuilding at its original location, Mitzel’s will be contributing to some restoration efforts on Dogfish Creek on the Morris property, she said.

The city is working on developing a master plan for the property, which was originally purchased as a city hall site in 2000, she said.

“It could possibly tie in with what’s going on with the Morris property,” she said of Mitzel’s mitigation requirements.

The agreement was reached through a lot of effort from all of the groups and organizations involved, including the Suquamish Tribe, Washington State Department of Fish and Wildlife, the city and the Poulsbo Village owners, she said.

“I’m excited about Mitzel’s, and I can’t wait for them to get into their new building,” Quade said.

Poulsbo Village property manager Beverly Lyon said she informed Mitzel’s officials Thursday morning of the agreement and they were pleased that they will be able to rebuild at the site.

“I turned in the application yesterday and hopefully we’ll be starting construction in the early fall,” Lyon said.

Poulsbo Village and Mitzel’s appreciates the willingness of all parties involved to find a way to get Mitzel’s back in business, she said.

“It’s good not only for the shopping center, but the community as a whole,” she said.

While Poulsbo Village will see the return of one its anchors, the community will benefit from the restoration and beautification of Dogfish Creek, she said.

“It shows our commitment to the environment and the community,” Lyon said.

Greater Poulsbo Chamber of Commerce director Stuart Leidner said the deal is an example of the community working together to everyone’s benefit.

“With all involved committed to coming up with a solution that works, everyone gets what they need,” Leidner said.

Much of the credit for rebuilding belongs to Lyon, who worked hard to communicate with all interested parties and facilitate a resolution, he said.

“It gets a much needed business back in the city, and we look forward to seeing it,” Leidner said.